FCC Closes Loophole on Chinese Telecom Surveillance Bans

The Federal Communications Commission shut a loophole on June 26 that had allowed Chinese companies classified as national security threats to keep selling surveillance equipment in the United States. Every single commenter on the rule agreed the danger was real. The expansion of the 2022 ban on Chinese-made telecom and video surveillance gear closes a regulatory gap that had let Huawei, ZTE, Hytera, Hikvision, and Dahua continue importing and marketing previously authorized equipment.

The commission prohibited the continued importation and marketing of equipment from companies added to its Covered List in 2024 or earlier. The ban takes effect 10 days after Federal Register publication, likely in early July. The 2022 rules banned new sales but left existing authorizations intact. This expansion now seals that opening.

Congress established the FCC's Covered List mechanism when it passed the Secure and Trusted Communications Networks Act in 2019. The bipartisan Secure Equipment Act of 2021 prohibited FCC authorization for equipment on that list. The FCC added Huawei, ZTE, Hytera, and other Chinese firms to the list in 2021. In November 2022, the commission adopted rules banning equipment authorizations but deliberately did not revoke previously granted authorizations.

"Older models of covered equipment — many of which remain widely available in the U.S. — continue to pose an unacceptable risk to national security when imported or marketed in the United States, not only when newly introduced to the market," the FCC declared.

This expansion continues a relentless enforcement arc. Chairman Brendan Carr announced "Operation Clean Carts" on October 10, 2025, which removed millions of listings for prohibited Chinese devices from e-commerce platforms. An October 28, 2025 FCC vote followed to block new approvals for devices containing Covered List parts. The commission banned all new foreign-produced drones in December 2025 and all new foreign-produced consumer routers in March 2026. In April 2026, the FCC advanced a proposal to bar Chinese carriers' data centers, then voted unanimously in May to bar Chinese labs from testing U.S. electronics.

Not one commenter disputed the national security concerns during the FCC's public comment period. The commission rejected calls for longer transition periods, phased implementation, or exemptions for replacement parts.

The Foundation for Defense of Democracies stated that allowing these firms to continue selling previously authorized equipment "will perpetuate vulnerabilities in U.S. telecommunications infrastructure." The group added that "we must act to prevent adversaries from exploiting regulatory loopholes to maintain access to U.S. critical infrastructure."

Distributors felt the economic impact. Russell Electric & Security Services reported $28,000 in inventory losses. Tony Loun reported $500,000. Hikvision accounted for 20 percent to 100 percent of annual revenue for some businesses, according to the FCC's own public comments. All Around Distributors relied on Hikvision for 20 percent of revenue. Tony Loun depended on it for 30 percent. Russell Electric & Security Services ran at 100 percent.

Twenty-two commenters used similar templates filed on behalf of Group One Northwest, Inc. The FCC stated plainly that "the national security risks of allowing covered equipment to continue to be imported and marketed in the U.S. far outweigh the potential economic impacts and supply chain disruptions." CTIA supported the action, citing the "Rip and Replace" program and noting that "participants in the ICT ecosystem can effectively serve the U.S. market without this equipment."

China struck back. The Commerce Ministry imposed export restrictions on rare earth and dual-use items to 10 U.S. companies on June 22, including MP Materials and USA Rare Earth. The Pentagon added Alibaba, Baidu, and BYD to its list of companies supporting the Chinese military on June 8, barring the Department of Defense from contracting with them. The Chinese Foreign Ministry has not publicly responded to the June 26 expansion, though a spokesperson in April characterized U.S. actions as "overstretching the concept of national security."

Hikvision USA filed suit in December 2025 challenging the FCC's authority to restrict previously authorized equipment. The company argued Congress did not grant the Commission that power. A 2024 D.C. Circuit ruling upheld the FCC's authority in principle but vacated its definition of "critical infrastructure," a definition the FCC has yet to finalize. The importation and marketing prohibitions for surveillance equipment used for critical infrastructure are temporarily suspended pending that definition. A D.C. Circuit ruling on the current case could fundamentally affect the FCC's authority.

Commissioner Olivia Trusty warned that "the nature and scope of physical and cybersecurity threats facing our communications networks today exceed those of any recent era." She added that policies designed to promote economic growth "are not exploited in ways that jeopardize our national and economic security." The Pentagon's recent actions against Chinese firms, combined with the systematic FCC crackdown, paint a picture of an economic and technological war that Americans cannot afford to lose by leaving backdoors in their own infrastructure.

"The need for expedited action is especially acute, because a delayed, but looming, prohibition would encourage importers and marketers to flood the U.S. market with covered equipment — a prospect that this proceeding is premised on preventing," the FCC stated.

Chairman Brendan Carr said in October 2025 that "the Communist Party of China has engaged in a multi-prong effort to insert insecure gear into Americans' homes and businesses. This equipment poses an unacceptable risk to our national security." The FCC's unanimous security consensus reflects growing bipartisan concern about Chinese espionage capabilities embedded in critical infrastructure. The Foundation for Defense of Democracies noted that equipment added to the Covered List in 2024 or earlier "is often functionally equivalent to these firms' more recently banned products."

The FCC's Council on National Security, created in March 2025, continues to review additional threats. The commission is considering a proposal to prohibit U.S. telecommunications carriers from interconnecting with Chinese telecom firms, which would effectively ban Chinese telecoms from operating U.S. data centers. CTIA warned that broad bans on indirect interconnection "could make it impossible to deliver traffic to or from the United States, effectively walling us off from parts of the world."

China's Commerce Ministry stated in May that the restrictions would "seriously undermine the international economic and trade order," vowing to hit back if implemented. The Chinese Embassy in Washington said China "consistently opposes the overstretching of the concept of national security and the abuse of state power to suppress Chinese enterprises." American security officials counter that the threat is real and present. "All of the entities captured in the proposed restrictions have been found by Congress or national security agencies to be subject to the control, direction, or influence of foreign adversary countries," CTIA noted.

The Electronic Frontier Foundation opposed the broader router ban, calling it a "blunt instrument that will impact many harmless products." Lawfare noted in June that "the FCC's own guidance confirms that previously authorized device models are not prohibited from import, sale, or use. Congress knowingly froze future risk while tolerating present exposure." The FCC's expansion directly addresses that exposure.

The commission's Public Notice emphasized that "no commenter disputed the national security concerns associated with such equipment." That unanimous agreement on the threat, even among affected companies and their distributors, leaves no room for debate about the stakes. The question now is whether Americans will trust their government to keep the equipment out — and whether that trust will hold when the next loophole appears.