Understanding Telecom Regulations: The Fundamentals of Section 889. Part B.

As a company that designs and manufactures Telecom solutions, we need to take under consideration certain regulations in order to do business in proper terms with organizations that are based in other countries.

In other words, the production of Telecom devices and resources should not be exclusively based on technical requirements -it should also be inserted within a legal framework. Otherwise, the purchase of our products runs the risk of not being accepted in certain markets. 

Having a solid understanding of the regulations that affect our design and manufacture processes becomes mandatory. These rules are also eloquent of the state of our industry and they also give us insights about how the future might look like.

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What is Section 889?

Companies that have government contracts need to understand what the Section 889 legislation is about, since it is a group of laws that applies to any type of federal contracts. That being said, Section 889 of the FY 2019 National Defense Authorization Act (NDAA) essentially comprises two prohibitions that are entitled Part A and Part B.

Part A states that a contractor is not allowed to sell prohibited telecommunications solutions or devices to federal agencies. Part B basically dictates that a contractor cannot use prohibited telecom. In other words, any company that already has government contracts or is applying to get any federal contract is not allowed to use prohibited telecom.

You also need to be aware that this prohibition also applies to whether this prohibited telecom is related or in any ways associated with the development of that federal contract or not.

It is important to highlight that the application of Section 889 Part B is only valid on prime contractors, which means that subcontractors are excluded from these prohibitions. 

What is Prohibited Telecom?

After getting to know more about Section 889, you may naturally wonder what type of products may enter the category of Prohibited Telecom. This regulation encompasses any equipment, device or service that is made by the following Telecom manufacturers and any of their subsidiaries or affiliates:

• Dahua Technology Company.
• Hangzhou Hikvision Digital Technology Company.
• Huawei Technologies Company.
• Hytera Communications Corporation.
• ZTE Corporation.

These products or services enter the category  “Covered Telecommunications Equipment or Services”, and these cannot be utilized or employed as “a substantial or essential component of any system, or as critical technology as part of any system.”

The Federal Acquisition Regulation (FAR) defines “substantial or essential component” as “any component necessary for the proper function or performance of a piece of equipment, system, or service.” And “critical technology” is defined by the FAR as any of the following: 

• Defense articles or defense services;
• Items included on the Commerce Control List;
• Items related to national security, chemical and biological weapons proliferation, nuclear nonproliferation, or missile technology;
• Items related to regional stability or surreptitious listening;
• Items specially designed and prepared nuclear equipment, parts and components, materials, software, and technology;
• Nuclear facilities, equipment, and material;
• Select agents and toxins;
• Emerging and foundational technologies

Exceptions

There are some exceptions that apply to both 889 Part A and Part B. Hence, Telecom manufacturers are allowed to provide the following types of products or services: 

- Items that connect to the facilities of a third-party, such as backhaul, roaming, or interconnection arrangements; and

- Equipment that cannot route or redirect user data traffic or permit visibility into any user data or packets that such equipment transmits or otherwise handles.

Stay knowledgeable

It is important that you have a solid comprehension of the regulations that are applied to your field of business. When it comes to Section 889, you must understand its fundamentals first, and once you have a clear idea of them, then you should analyze its implications.

If you are a Telecom provider, you must make sure that your company does not use, in any shape or form, any of the products or services that are considered prohibited. On one hand this is critical if your company already has federal contracts or is pursuing one of them. And on the other, even if your company does not have any association with federal contracting, it is important that it stays away from the use of or association with these types of devices.

As far as doing business in Telecom, by knowing what the government is allowing or not, you are getting valuable information in regards to what is considered legal or not in the Telecom arena, so you must remain vigilant about these legislations even if they are not applied to your business.

As a Telecom manufacturer, Beyondtech does not employ nor include any type of device, equipment or service from these Prohibited Telecom manufacturers in its catalog, neither is it associated with any of these providers.

If your company is associated with the government, already has a federal contract or is pursuing a federal contract, and you want to purchase Telecom solutions from us, feel free to get in touch with us to obtain additional information.