Senators Strike Deal on 'Rip and Replace' Telecom Funding; DOJ Indicts Huawei

Senate Commerce Committee Chairman Roger Wicker, R-Miss., told reporters Thursday he reached a deal to allow the chamber to pass the Secure and Trusted Communications Networks Act (HR-4998) by unanimous consent (UC) after the upcoming Presidents Day recess. The House-passed bill would allocate at least $1 billion to help U.S. communications providers remove from their networks Chinese equipment determined to threaten national security. Meanwhile, Huawei faces 16 DOJ charges it violated the Racketeer Influenced and Corrupt Organizations Act and stole trade secrets from six U.S. companies (see 2002130030).

“Everything is resolved” with the office of Sen. Mike Lee, R-Utah, over moving HR-4998 as originally intended in December, Wicker said. Lee objected then to Wicker’s bid to pass it via UC (see 1912190068). Capitol Hill leaders had aimed to enact the bill in tandem (see 1912120071) with the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence (Traced) Act (S-151) and the Broadband Deployment Accuracy and Technological Availability (Broadband Data) Act broadband mapping legislative package (HR-4229).

Lee “is back to accepting” the final version of HR-4998 Wicker offered in December, Wicker said. Lee attempted in December to move the similar Senate Commerce-cleared U.S. 5G Leadership Act (S-1625), which set a limit of $700 million in equipment removal grants and specifies the money would come from spectrum auction proceeds. Lee objected to moving HR-4998 because it didn’t delineate a clear funding source. He “wanted a vote on an amendment” to address the funding issue but the Congressional Budget Office “gave it a bad score and he just didn’t feel like wrestling with that,” Wicker said.

Lee’s office confirmed the agreement.

DOJ’s indictment, filed in U.S. District Court in Brooklyn, claimed Huawei and two of its affiliates engaged in a “pattern of racketeering activity” and worked to steal trade secrets from six unidentified “Victim” U.S. companies in the tech sector. The stolen information included source code and user manuals for wireless technology, DOJ said. The indictment notes a Huawei employee in 2004 snuck into a Chicago trade show “in the middle of the night after the show had closed for the day in the booth of a technology company” and was found “removing the cover from a networking device and taking photographs of the circuitry inside.” Justice didn't answer our request to identify the six affected U.S. firms.

“This new indictment is part of the Justice Department’s attempt to irrevocably damage Huawei’s reputation and its business for reasons related to competition rather than law enforcement,” the company said in a statement. “The ‘racketeering enterprise’ that the government charged today is nothing more than a contrived repackaging of a handful of civil allegations that are almost 20 years old and that have never been the basis of any significant monetary judgment against Huawei. The government will not prevail on these charges which we will prove to be both unfounded and unfair.”

Senate Intelligence Committee Chairman Richard Burr, R-N.C., and Vice Chairman Mark Warner, D-Va., in a statement called the indictment “an important step in combating Huawei's state-directed and criminal enterprise. The indictment paints a damning portrait of an illegitimate organization that lacks any regard for the law. Intellectual property theft, corporate sabotage, and market manipulation are part of Huawei's core ethos and reflected in every aspect of how it conducts business." Huawei’s “unlawful business practices are a threat to fair and open markets, as well as to legitimate competition in a tech space," the senators said.

The Commerce Department’s Bureau of Industry and Security, meanwhile, extended its temporary general license for Huawei and 114 of its non-U.S. affiliates until April 1. The 45-day extension is the third granted since May, when BIS first placed the company on its list of entities subject to export administration regulations (see 1905160081). Commerce’s actions in the past have drawn lawmakers' ire. BIS' extension notice is set to appear in the Tuesday Federal Register, The previous extension was to expire Sunday.