U.S. Regulators Bar Government Telecom Funds for Huawei, ZTE

U.S. communications regulators have cut off government funding for equipment from two Chinese companies, citing security threats.

The Federal Communications Commission voted unanimously Friday to bar U.S. telecommunications providers from using government subsidies to pay for equipment from Huawei and ZTE.

The agency will also consider whether to require companies that get government subsidies to rip out any Huawei and ZTE equipment they already have in place.

The move mostly affects small, rural companies, as larger U.S. wireless companies do not use equipment from those Chinese companies.

Huawei says the rule is unlawful, as there is no evidence it poses a security risk. ZTE did not immediately respond to a request for comment.