DOD stops selling Chinese mobile phones at military exchanges

The move is the latest salvo in the government's ongoing conflict with telecom companies Huawei and ZTE over concerns their devices could be used to facilitate Chinese government spying

The Pentagon announced that military exchange service stores and concessionaires will no longer sell Huawei and ZTE phones and telecommunications equipment.

According to Pentagon spokesman Maj. Dave Eastburn, the directive was issued April 25 at the behest of the Office of the Undersecretary of Defense for Personnel and Readiness. The directive was originally just for Huawei products but ZTE was added to the list due to "potential security concerns."

"The three Department of Defense exchange services immediately ceased selling Huawei brand cellular phones, personal mobile internet modems, and related products, because these devices may pose an unacceptable risk to the Department's personnel and mission," Eastburn told FCW. "Given the security concerns associated with these devices, as expressed by senior U.S. intelligence officials, it was not prudent for the Department's exchange services to continue selling these products to our personnel."

Eastburn declined to comment further on the nature of the potential threats posed by ZTE and Huawei devices, citing security concerns.

Navy Secretary Richard Spencer provided more details about the rationale behind the directive during a May 2 Pentagon news conference. He also referenced testimony from an April 19 Senate Armed Services committee hearing where it was revealed that DOD had put a recent contract award on hold when officials realized Huawei would be one of the subcontractors.

"The mobile phone ban was due to the location devices more than anything else – the ability to be located," said Spencer.

Spencer also said the ban was more reflective of a general device concern rather than a specific nation state.

In February 2018, the heads of the FBI, NSA and CIA all testified to Congress that they and their organizations do not use Huawei or ZTE phones or products, and warned others against doing so as well. Eastburn indicated the Pentagon's decision stemmed in part from that hearing and said the department is evaluating the situation to determine if additional security actions are needed.

However, there is also a long history of suspicion between the U.S. government and these firms around the extent to which their phones could be used to facilitate Chinese government surveillance. Concerns about the two firms date back to as early as 2011, when the House Permanent Select Committee on Intelligence conducted an investigation that concluded the products posed a direct threat to U.S. government systems and encouraged private sector companies to consider the long term risks of doing business with them.

Huawei was banned from competing for U.S. government contracts in 2014 and ZTE has faced a torrent of regulatory actions from the U.S. in recent years, including a combined $1.4 billion in fines and a ban on buying from U.S. tech firms after the Department of Commerce determined the company had violated U.S. trade sanctions by selling telecommunications equipment to North Korea and Iran.

More recently, the two telecom giants were singled out in a report by the U.S.-China Economic Security Review Commission alleging that the Chinese government has actively and intentionally placed local companies at the nexus of the U.S. IT supply chain. Both Huawei and ZTE have vehemently rejected claims by U.S. officials that they are helping or assisting Chinese intelligence operations and have repeatedly insisted their products are safe and secure for U.S. users.

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