FCC Covered List expansion sidelines Commerce Department with aggressive hardware bans

The commission's move to ban entire categories of equipment rather than specific companies creates immediate supply chain volatility for streaming infrastructure providers and data center operators. By utilizing radio frequency emission authorities to regulate national security, the FCC is filling a vacuum left by the Commerce Department's recent inactivity, though it faces potential legal challenges for exceeding its statutory scope. This shift forces firms to seek individual variances for critical hardware dependencies in real time. Industry strategists should monitor upcoming litigation regarding the FCC's authority and the potential for the Commerce Department to reassert control through the ICTS framework.

The FCC's Covered List has grown substantially since its creation under the Secure Networks Act of 2019, evolving from a targeted list of specific Chinese telecom vendors into a broad regulatory instrument covering entire equipment categories. In March 2025, the FCC added all routers and networking equipment made by Chinese companies to the Covered List, a move that affected not only consumer devices but also enterprise-grade networking hardware used in content delivery networks and streaming infrastructure. The commission's authority to designate equipment rests on its interpretation of national security risk under Section 889 of the National Defense Authorization Act, though legal scholars have questioned whether the FCC's statutory mandate over radio frequency emissions provides sufficient grounding for broad hardware bans that extend well beyond communications equipment.

The regulatory tension between the FCC and the Commerce Department's Office of Information and Communications Technology and Services (OICTS) reflects a broader institutional competition over who controls national security reviews for technology supply chains. In January 2025, the Commerce Department finalized rules under Executive Order 13873 that would have established a formal ICTS review process for connected devices, but implementation has stalled amid leadership transitions and budget constraints. Meanwhile, the FCC has moved aggressively, with Commissioner Brendan Carr directing staff to accelerate Covered List designations. The Kaspersky Lab precedent is instructive here: in June 2024, the Commerce Department issued a final determination prohibiting Kaspersky software from U.S. networks, demonstrating that OICTS can act decisively when resourced, but the FCC's pace of designations in 2025 and 2026 has far outstripped anything Commerce has produced.

For streaming infrastructure operators, the practical implications center on supply chain dependencies for power management, networking, and edge computing hardware. The inclusion of power inverters on the Covered List is particularly significant for data center operators, as the U.S. data center market relies heavily on Chinese-manufactured power conversion equipment for roughly 30% of installed capacity, according to industry estimates from Data Center Dynamics. Digitalsystem Technology, one of the entities named in recent FCC designations, manufactures embedded computing modules used in video encoding and transcoding pipelines. Operators using affected hardware must now file for individual variances or identify alternative suppliers, a process that can take 90 days or more and introduces compliance costs that smaller streaming platforms may struggle to absorb.