There is currently an FCC proposal being considered that would limit the ability of companies that are on the US government’s Covered Entity List from receiving FCC authorizations for future products. This includes Dahua Technology, and Dahua submitted comments on the record that make important points:

While the FCC certainly has the legal authority to consider how devices impact the integrity of the U.S. telecommunications system through RF interference, we do not believe that this legal authority extends beyond these considerations. Since this proposed rule is about geo-political and national security issues, the law simply does not empower the FCC to take considerations of this sort into account for equipment authorization.

The proposed rule focuses on the identity of the company and not on technical considerations that are relevant to protections against RF interference. For this reason, we believe that this is entirely “arbitrary and capricious”. No evidence has ever been found to show that Dahua’s equipment causes either RF interference or that it fails to meet other technical standards that are evaluated for the authorization process of equipment. In contrast, all of the Dahua products that are sold in the United States are certified through FCC-authorized labs or through FCC’s certification procedures.

Should the FCC’s proposed rules retroactively revoke existing authorizations based on non-technical criteria, such rules would be unconstitutional. This idea conflicts with the U.S. Constitution as it violates protected property rights. Furthermore, it penalizes companies without offering them a hearing of any sort.

When analyzing the cost-benefit ration of this situation, the cost vastly outweighs any benefit. Most of Dahua’s equipment isn’t even relevant to the FCC’s concerns about national security risks, since they aren’t connected to public communication networks. By limiting Dahua’s access to the US, the losses will far outweigh the benefits. The losses could include needing to replace existing systems and dealing with the decreased security products supply and the diminished competition in the U.S. security market. The losses could also include dealing with the inability to upgrade current systems and the higher prices for security products paid by users. All of these factors would ensure that the losses far outweigh any potential benefit.