ITI Urges FCC Not to Sweep Optical Modules Onto Restricted List

C114 News, August 24 (Shui Yi) — According to Communications Daily, a leading U.S. telecom media outlet, the Information Technology Industry Council (ITI) last week urged the Federal Communications Commission (FCC) not to add foreign-made optical modules to its Covered List.

Earlier reports indicated that the U.S. government is drafting a ban that would prohibit U.S. entities from importing new types of data center components made in China. The FCC is reportedly working on the measure, which targets imports of optical modules produced in China.

ITI argues that regulators should stick to a "precise, risk-based" approach, with the Covered List focused on entities or products with clear ties to foreign adversaries, rather than broadly sweeping in entire technology categories from trusted companies.

ITI explicitly opposes adding optical modules to the Covered List, particularly the blanket inclusion of all foreign-produced optical modules. The association said optical modules are critical to data center construction, and any supply chain disruption would directly affect U.S. data center deployment timelines and the overall competitiveness of U.S. AI.

Even if the FCC later considers action, ITI recommends a narrower scope targeting specific entities already on the Covered List, rather than restrictions based on country of manufacture or the entire optical module category, and calls on the FCC to consult fully with industry before taking formal action.

Communications Daily is a leading U.S. industry briefing on telecom regulation, legislation and policy. ITI (Information Technology Industry Council) members include major U.S. information and communications technology companies such as Apple, Google, Amazon and NVIDIA, and the council advises U.S. executive, legislative and international regulatory bodies on policy areas including cybersecurity, international trade, technical standards and artificial intelligence.‌‌

Omdia Senior Principal Analyst Lü Mingyang previously said that geopolitical issues have persisted and remain an objective reality since 2024, and the industry has long prepared in advance across areas such as ownership structures and factory locations. At the same time, even as US domestic capacity from companies including Coherent, Lumentum, Nokia, AOI and Corning gradually comes online in the second half of next year, the optical industry chain and delivery capabilities in China and the Asia-Pacific region remain irreplaceable.

Morgan Stanley previously reported that capacity from non-Chinese suppliers is currently insufficient to meet demand driven by AI capital expenditure. Citigroup said the move would not be a blanket ban: seven of the world's top ten optical module makers are Chinese companies, supplying more than 50% of high-speed optical modules to major US cloud service providers (CSPs). The AI optical component supply chain is already tight, and leading Chinese manufacturers retain key advantages in component sourcing and advanced product development. Chinese module makers have clear cost advantages that support CSP capital expenditure efficiency, and all leading Chinese optical module manufacturers have established overseas plants.