Report: Chinese telecoms may have accessed US military bases via USDA grants

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Concerns over national security and spying threats have been raised following reports that at least two telecommunications companies that received grants from the U.S. Department of Agriculture and purchased equipment from Chinese phone manufacturer Huawei operate services areas within 100 miles of American military posts.

According to The Washington Free Beacon, “One of the USDA-backed companies, Pine Telephone Company, maintains a service area in southeastern Oklahoma that encompasses the McAlester Army Ammunition Plant, potentially enabling Huawei to completely surround the Pentagon’s chief provider of bombs, missiles, and ammunition for the U.S. armed forces.”

A tower that is located less than 100 miles from the active duty Tinker Air Force base is also operated by the Pine Telephone Company.

Missouri-based Crystal Automation systems, a second company backed by the USDA, operates service areas within 100 miles of the active duty Detroit Arsenal, which “headquarters the military command tasked with complete cycle support of soldier and vehicle ground systems, including small arms, field artillery, mortars, tactical vehicles, and heavy combat vehicles.”

It is not known whether the USDA grants were used directly to purchase equipment from Huawei, but the agency does not prohibit carriers from accessing a multi-million dollar government fund established to expand broadband to rural areas to purchase equipment from companies deemed to represent a national security risk.

Pressure from lawmakers and intelligence officials has forced AT&T, Verizon, and other large carriers to avoid Huawei, whose equipment might be used by Beijing to conduct espionage or perpetrate cyber attacks given its close ties to the ruling Chinese Communist Party. Huawei denies such an affiliation.

Due to Huawei’s offering of lower prices and better customer service than competitors, many small or rural carriers have purchased equipment from the company.

In March, Federal Communications Commission Chairman Ajit Pai proposed a rule that would prohibit rural carriers from using federal funds to purchase equipment from any company posing a threat to the United States or its communications networks. In a separate statement regarding the proposal, the FCC directly named Huawei and smaller Chinese rival ZTE.

The FCC took action following a congressional inquiry led by Sens. Tom Cotton, R-Ark., and Marco Rubio, R-Fla., who introduced legislation to prohibit the U.S. government from purchasing or leasing equipment from Huawei or ZTE.

“Chinese telecoms companies pose a real and growing threat to our national security and to Americans’ privacy,” Cotton said. “We’ve been subsidizing them for far too long and I’m committed to cutting off their access to taxpayer dollars—whether through the FCC, USDA, or any other federal agency.”

A similar bill was introduced in the House in January by Reps. Liz Cheney, R-Wyo., and Mike Conaway, R-Texas.

“The presence of these companies anywhere near U.S. military installations is deeply troubling,” Conaway said, adding that he is “exploring other options to keep our military protected from prying Chinese eyes.”

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