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U.S. Gives Limited Relief for Consumers, Carriers Using Huawei

Jenny Leonard
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U.S. Gives Limited Relief for Consumers, Carriers Using Huawei

(Bloomberg) -- The Commerce Department on Monday granted a 90-day relief for certain U.S. broadband companies and wireless customers using Huawei Technologies Co. equipment.

The temporary license covers continued operation of existing networks and equipment as well as support to existing handsets and other limited actions, according to a notice published in the Federal Register Monday.

“This license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks,” Commerce Secretary Wilbur Ross said in an emailed statement on Monday.

The Trump Administration blacklisted Huawei on Friday, jeopardizing its supply of American components from semiconductors to the Google apps that run on its smartphones. For Huawei phone users, the temporary reprieve means Google will be able to provide key Android security updates during the 90-day time frame, but future Huawei phones will still lack Google’s apps.

Ross said last week on Bloomberg Television that the administration had a plan in place to deal with rural providers that use the Chinese company’s equipment in existing 4G networks.

The move comes after the Trump administration placed the Chinese telecoms giant on an export blacklist that requires American companies to apply for a special license to sell products to the world’s largest networking gear maker. The impact of the Trump administration’s threats to choke Huawei reverberated across the global supply chain on Monday, hitting some of the biggest component-makers.

Small carriers, the main U.S. users of Huawei gear, had worried the ban could keep them from even routine practices such as ordering replacement parts or exchanging information in order to update software.

The equipment is typically cheap and reliable, winning fans among rural providers. The largest U.S. carriers don’t use Huawei gear, which government officials say could be used for espionage -- an allegation the company denies.

The temporary license is effective for three months, until Aug. 19.

Kevin Wolf, former head of the Commerce Department’s export controls section, said the temporary relief is not an indication that the Trump administration was backing off its ban on the company.

“It is a limited authorization to prevent Internet and telecom systems from crashing. It is not a general relief from the impact of the listing,” he said.

Such a temporary license has been granted only once before, for Huawei rival ZTE Corp., last year, Wolf added.

(Updates with Google impact in fourth paragraph.)

--With assistance from Todd Shields and Mark Bergen.

To contact the reporter on this story: Jenny Leonard in Washington at jleonard67@bloomberg.net

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Margaret Collins, Sarah McGregor

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