Hikvision, Dahua Gear Doesn’t Belong on ‘Covered List’ as Security Threat: Reply Brief

The FCC lacked authority to put Hikvision and Dahua video equipment on the “covered list” as deemed to pose a threat to U.S. security, said the Chinese companies’ U.S. subsidiaries’ joint reply brief Wednesday (docket 23-1032) at the U.S. Court of Appeals for the D.C Circuit. The companies are challenging the FCC’s Nov. 25 order barring authorization of network equipment on the covered list (see 2304250043).

Congress didn’t “ratify” the covered list by passing the 2021 Secure Equipment Act, said the reply brief. The statute addressed only the list’s “consequences, not its scope,” it said. Hikvision and Dahua video equipment isn’t “essential” to the provision of broadband services, as is required to be eligible for the covered list, it said. The FCC now says their equipment is essential to video telecommunications, it said. But the statutory definition “hinges on broadband capability,” it said. Hikvision and Dahua equipment isn’t essential to broadband capability “under any reading of the term,” it said.

Nor do Hikvision and Dahua products qualify as “communications equipment” under the 2019 Secure and Trusted Communications Networks Act, said the reply brief. That statute “focuses on securing equipment essential to broadband networks that provide transmission service, not equipment used to create content sent over those networks,” it said.

The FCC’s Nov. 25 order “also fails to make the determination required” by the Secure Networks Act that Hikvision and Dahua equipment “poses a national security threat to broadband networks,” said the reply brief. Unlike the network equipment produced by Huawei, which the commission, affirmed by the courts, determined to be capable of intercepting and misrouting traffic, Hikvision and Dahua equipment “lacks capabilities needed to threaten national security,” it said.

Hikvision and Dahua don’t contend the FCC would lack authority to place their equipment on the covered list if it were “network equipment with the dangerous capabilities listed” in Secure Networks Act, said the reply brief. Nor do the companies dispute the commission’s “power to bar authorization for equipment that is properly listed,” it said. But Hikvision and Dahua video equipment doesn’t belong on the list, it said.

The Secure Networks Act’s “cross-reference” to the 2019 National Defense Authorization Act can’t “bear the weight” the FCC places on it to justify putting Hikvision and Dahua equipment on the covered list, said the reply brief. Though the 2019 NDAA does mention Hikvision and Dahua video surveillance equipment, it doesn’t even “bar federal agencies from purchasing that equipment,” it said.

The 2019 NDAA applies only to products that, unlike Hikvision and Dahua equipment, are “capable of disrupting traffic or similarly harming networks,” said the reply brief. The FCC erred by concluding that, even if Hikvision and Dahua equipment isn’t capable of harming networks, “it nevertheless must be placed” on the covered list, it said.

The FCC argues its interpretation of “critical infrastructure” was “reasonable” and the examples Hikvision and Dahua gave of its “overbreadth” in challenging that interpretation were “farfetched,” said the reply brief. But those examples were based on the commission’s own statements, it said. If the FCC didn’t mean what it said, “then regulated parties cannot know what it meant, and the regulations would be invalid for that reason alone,” it said. The suggestion parties can seek clarification through further commission proceedings “is legally insufficient, unrealistic, and would create an administrative nightmare,” it said.

The Hikvision-Dahua appeal is “properly before” the D.C. Circuit, said the reply brief. D.C. Circuit precedents “permit parties to challenge agency actions outside the Hobbs Act’s 60-day filing period when an agency reopens an earlier issue or applies it in a new way,” as the FCC did, it said: “Any other policy would allow agencies to enact seemingly innocuous regulations and later attach drastic consequences to those rules without having to account for their authority to do so.”