In a significant development, the U.S. Federal Communications Commission (FCC) unanimously voted to finalize a $1.9 billion program to reimburse mostly rural U.S. carriers by replacing Huawei’s and ZTE Corp’s equipment as they are seen as posing national security threats.
In 2020, the FCC designated Huawei and ZTE as national security threats to communications networks, which essentially barred U.S. companies from tapping a $8.3 billion government fund to purchase equipment from the companies.
In December 2020, the FCC adopted rules requiring carriers with ZTE or Huawei equipment to “rip and replace” their equipment.
“There is a serious risk that this equipment may be manipulated, disrupted or controlled by foreign actors,” said acting FCC Chairwoman Jessica Rosenworcel. “We will evaluate network after network, base station after base station and router after router until we have rooted out our equipment that could undermine national security. It’s a daunting task.”
The FCC’s final order expands the companies eligible for reimbursement from those with 2 million or fewer customers to those with 10 million or fewer customers.
In September 2020, as per FCC’s estimate, it would cost $1.837 billion to remove and replace Huawei and ZTE equipment from US networks.
Last month, the FCC voted to advance a plan to ban approvals for equipment in U.S. telecommunications networks from Chinese companies deemed national security threats like Huawei and ZTE. The FCC could also revoke prior equipment authorizations issued to Chinese companies.
In March 2021, the FCC designated five Chinese companies as posing a threat to national security under a 2019 law aimed at protecting U.S. communications networks.
The Chinese companies affected by the FCC order includes Huawei, ZTE, Hytera Communications Corp, Hangzhou Hikvision Digital Technology Co and Zhejiang Dahua Technology Co.
In August 2020, the U.S. government barred federal agencies from buying goods or services from any of the five Chinese companies.