FCC Report Claims $1.8 Billion Required To Pull Huawei And ZTE Out of US Networks

In early June 2020, The Federal Communications Commission (FCC) officially announced that the Chinese-based Telecommunications companies Huawei and ZTE were a threat to the nation’s security. Following the announcement, the FCC has banned service providers from using government subsidy money to purchase equipment from the telecom giants. Although the FCC had already voted to block all telecom services from using Huawei equipment, the official announcement only came under effect last month. According to the chairman of the FCC, Ajit Pai, Both Huawei and ZTE are a national security threat due to their close ties to the Chinese Communist Party.

With today’s orders, and based on the overwhelming weight of the evidence, the bureau has designated Huawei and ZTE as national security risks to American Communications Networks – and to our 5G future,” Ajit Pai stated in a recent interview. “Both companies have close ties to the Chinese Communist Party and China’s Military Apparatus and both companies are broadly subject to Chinese laws obligating them to cooperate with the country’s intelligence services.

According to the latest report by the FCC, it will cost around $1.8 billion to remove all Chinese equipment from telecom service providers and small carriers around the nation. However, $1.6 billion is required as federal reimbursement to start replacing Huawei equipment from small carriers. The report has mentioned that most of the small carriers lack the necessary funding to start replacing equipment and in often cases the cost is just too high for them to shoulder on their own. To combat the national threat, the FCC has requested the Congress to appropriate the required funds, however, the Congress has yet to reply to the FCC.

It is important to note that the FCC report only covers those services providers in the US who are actively taking support from the Universal Service Fund (USF) to provide telecom services. The report has overlooked many carriers who are using Huawei and ZTE equipment but have yet to report their equipment. This could mean that the total cost to remove Huawei and ZTE equipment could be far greater than the specified $1.8 billion. Furthermore, Congress has yet to provide any funds for the removal of equipment.

It is the top priority of our nation and this commission to promote the security of our country’s communications networks. That’s why we sought comprehensive information from US carriers about equipment and services from untrusted vendors that have already been installed in our networks. Today’s announcement marks a crucial milestone in our ongoing commitment to secure our networks,” said Ajit Pai. “By identifying the presence of insecure equipment and services in our networks, we can now work to ensure that these networks – especially those of small and rural carriers – rely on infrastructure from trusted vendors. I once again strongly urge Congress to appropriate funding to reimburse carriers for replacing any equipment or services determined to be a national security threat so that we can protect our networks and the myriad of parts our economy that rely upon them.

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