The US Federal Communications Commission may refuse to offer subsidies to small and rural carriers who buy equipment from Chinese telecommunications companies, in a bid to prevent Huawei from gaining any further foothold in the country.
Sources told The Wall Street Journal that while the proposal would not impose an outright ban on the use of Huawei equipment, but rather limit subsidies for carriers that use Huawei gear by not allowing them to get money from the Universal Service Fund, an US$8-billion-a-year government programme.
The programme gets it money from charging individuals a few dollars each through their telephone bills. It is meant to subsidise companies providing broadband service in rural areas and also offer affordable wireless plans to low-income mobile users.
Huawei has targeted small and rural providers of wireless and broadband. The WSJ said many of them had nothing but good words for the company as its equipment and services are often cheaper and better than competitors.
{loadposition sam08}These carriers also say the Chinese telco giant is much better at customer service, often worrying about getting something working right instead of the cost involved.
Huawei has been contacted for comment.
But the US has already begun trying to block Huawei, after a 2012 Congressional report alleged the company was a threat to national security, with a warning that Beijing could use its equipment for state-sponsored spying or cyber attacks.
In December, President Donald Trump signed a bill to ban Huawei and ZTE equipment from nuclear weapons systems in the US Defence Department. Trump also banned a takeover of US processor maker Qualcomm by Singapore-based Broadcom because of national security concerns; Huawei's ties to Broadcom were mentioned as a concern.
In the most recent US move against Huawei, multinational electronics corporation Best Buy said it would no longer stock the company's smartphones.
This comes after AT&T in January dropped a deal to start selling Huawei smartphones on its plans and Verizon took the company's devices off its shelves.
Analyst Stefan Pongratz of Dell’Oro Group said Huawei gear comprised less than 1% of wireless equipment in US networks. Ericsson and Nokia each accounted for 48%, while Samsung Electronics had 3% of the US$30 billion-a-year American market for cellular equipment.