Over the past month the FCC has been accepting public comments regarding its proposed rule, which would restrict the ability of Dahua and certain other companies from receiving authorizations for future products in the U.S. market.

As part of that comment period, dozens of Dahua customers and others in the industry stepped forward to express their view that the FCC’s proposal would be bad for their businesses and to urge the FCC to not adopt the rule as proposed. Virtually no voices submitted comments in support of the proposed rule.

To help inform the FCC’s deliberations, Dahua, too, submitted comments for the record https://www.fcc.gov/ecfs/filing/109200057004860.

In our submission, we have made a number of arguments:

First, we have pointed out that in our view the FCC does not have the statutory authority to refuse authorizations based on considerations unrelated to the integrity of the U.S. telecommunications system. In this case, the proposed rule is clearly about geo-political and national security issues. But the law does not empower the FCC to take such considerations into account when it comes to equipment authorization. FCC’s equipment authorization rules seek to address harmful interference of RF equipment, not national security issues.

Second, we have pointed out to the FCC our view that the proposed rule are “arbitrary and capricious” because they seek to deny authorizations based not any technical considerations relevant to protections against RF interference, but simply on the identity of the company. There is no evidence that Dahua’s equipment causes excessive RF interference or fails to meet any other technical standard considered in the equipment authorization process. In fact, all Dahua’s products sold in the United States have been certified through the Supplier’s Declaration of Conformity (“SDoC”) procedures by FCC-authorized labs or through FCC’s certification procedures, to the extent applicable.

Third, we argued that the FCC’s proposed rules would be unconstitutionally retroactive if they seek to revoke existing authorizations based on non-technical criteria. Such rules run afoul of the U.S. Constitution by violating protected property rights and penalizing companies without any type of hearing.

Lastly, beyond the legal flaws, we have argued that the costs of enforcing the rules would vastly exceed any speculative benefit. The vast majority of Dahua’s equipment is not connected to public communications networks and therefore, is not relevant to FCC’s concerns regarding national security risks to communications networks. Limiting Dahua’s access to the US will result in huge losses. These losses would stem from the potential need to replace existing systems, the inability to upgrade their current systems, and from the decrease of security products supply, diminishment of competition in the U.S. security market, and higher prices for security products ultimately paid by end-users. These losses would far outweigh any potential benefit.

As Dahua has stated many times, we fully respect the right of the U.S. government to regulate its domestic market, and our company will always comply with U.S. law. In this case, we believe the FCC’s proposal goes beyond what U.S. law and the U.S. Constitution allows, and would also be harmful for U.S. businesses and the economy.