US lawmakers create US$1.9 billion fund to help carriers remove Huawei and ZTE equipment from their systems
Tucked into the Covid-19 relief package that the US Congress passed late Monday night was US$1.9 billion in subsidies for US telecoms carriers to remove and replace Huawei Technologies and ZTE Corp networks and equipment that have been deemed national security threats.
The US Federal Communications Commission (FCC) first raised the idea early last year to remove and replace those systems but since then the affected carriers - mostly small companies in rural areas - warned that such a move could upend their businesses.
Two weeks ago, the agency finalised rules requiring US carriers to remove Huawei equipment, shortly after it designated the Chinese telecoms giant a national security threat.
Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.
Washington is wary that Huawei and ZTE gear might have bugs that would enable the companies to transfer US data and information to Beijing. Both companies have denied the allegations repeatedly.
Ajit Pai, the FCC chairman, praised congressional leaders on Monday for "working together in a bipartisan manner to reach agreement on this consequential legislation that will help protect our national security, close the digital divide, advance tele-health, and promote American leadership in 5G".
The US$1.9 billion Congress approved "will strengthen both network security and our national security," Pai said.
Federal Communications Commission Chairman Ajit Pai, shown in 2019, (FCC), said the funding "will strengthen both network security and our national security". Photo: Bloomberg alt=Federal Communications Commission Chairman Ajit Pai, shown in 2019, (FCC), said the funding "will strengthen both network security and our national security". Photo: Bloomberg
The relief package now heads to US President Donald Trump, who is expected to sign it into law in the coming days.
The funding builds on a law Trump signed in March barring US carriers from tapping an US$8.3 billion fund to buy network equipment from Chinese companies.
The FCC estimated that several dozen rural carriers had used that fund to purchase equipment from Huawei or ZTE. The agency estimated that the average cost for a carrier to replace the equipment ranges from US$40 million to US$45 million.
For most carriers, removing Huawei and ZTE gear will prove to be messy. Steven Barry, who heads the Competitive Carriers Association, a trade group for rural mobile carriers, told a congressional hearing this year that rural carriers were "essentially attempting to rebuild the aeroplane in mid-flight" by having to remove and replace network equipment.
Huawei has objected to these exclusions and restrictions, calling the actions an "overreach" to "force removal of our products from telecommunications networks".
"This overreach puts US citizens at risk in the largely underserved rural areas - during a pandemic - when reliable communication is essential," a company spokesperson said.
This article originally appeared on the South China Morning Post (SCMP).
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
