Huawei, who is owned by the Chinese Dinglong Culture, is fighting back against the restrictions from the U.S. Federal Communications Commission that bans the purchase of equipment from the company.

Last month, the FCC banned the use of the $8.5 billion a year Universal Service Fund (USF) to purchase equipment and services from companies that pose a national security threat. The regulator designated Huawei and ZTE (ZTCOY  ) as companies covered by this rule.

The Universal Service Fund is used to fund telecommunication services and equipment predominately in rural areas. Small rural carriers partnered with Huawei and ZTE because they undercut their competitors. The FCC decision puts pressure on those carriers to find an alternative that could cost billions.

"Banning a company like Huawei, just because we started in China-this does not solve cybersecurity challenges," said Huawei's chief legal officer, Song Liuping.

Huawei filed a lawsuit last Wednesday with the Fifth Court of Appeals in New Orleans. The order "exceeds the FCC's statutory authority and violates federal law, the Constitution, and other laws," the company said.

FCC Chairman Aji Pai said Huawei has "close ties with the Chinese government and military apparatus," which makes the company a threat to national security.

Glen Nager, Huawei's lead counsel, made a statement that the FCC's decision to stop companies from using the fund to purchase Huawei equipment exceeds the agency's authority due to the fact it is not a national security agency.

"The designation is based on a fundamental misunderstanding of Chinese law and on unsound, unreliable, and inadmissible accusations and innuendo, not evidence," Nager said. "The designation is simply shameful prejudgment of the worst kind."

This is not the first time Huawei has filed a lawsuit against the U.S. government. In March, Huawei sued the U.S. government for banning the use of its products. Huawei executives have insisted it is a private company and is not under the control of the Chinese government.