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Rural telecoms face $1.8 billion tab to replace Huawei and ZTE equipment

The Federal Communications Commission has added up how much it will cost to replace the Huawei and ZTE equipment in America's rural telecommunications infrastructure: $1.84 billion.

According to data pulled together by the Wireline Competition Bureau and the Office of Economics and Analytics for the FCC, taxpayers will be on the hook for $1.6 billion, based on reimbursements approved under the under the Secure and Trusted Communications Networks Act of 2019 to help qualifying telecoms pay for removing Chinese equipment and purchasing and installing secure replacements.

Last year’s White House executive order  to eliminate or curtail any U.S. government investments in products from foreign IT or communications firms that are deemed a potential national security risk. In November 2019, the FCC banned rural telecom companies from using its Universal Service Fund to buy equipment from the two Chinese firms but didn't address replacing the parts and components that were already in place.

While security concerns around Huawei and ZTE have been floating around for years, the companies were often able to sell to rural U.S. telecoms because they were one of the only viable manufacturers for certain parts and also by leveraging subsidies from the Chinese government to significantly underbid their U.S.-based competitors.

The agency also released a list of 51 firms that would qualify for reimbursement, spanning from smaller telecoms to large conglomerates like Verizon and CenturyLink.

“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,” FCC Chairman Ajit Pai said in a statement. “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 parts of our economy and society that rely upon them.”

This article was first posted to FCW, a sibling site to GCN.

About the Author

Derek B. Johnson is a senior staff writer at FCW, covering governmentwide IT policy, cybersecurity and a range of other federal technology issues.

Prior to joining FCW, Johnson was a freelance technology journalist. His work has appeared in The Washington Post, GoodCall News, Foreign Policy Journal, Washington Technology, Elevation DC, Connection Newspapers and The Maryland Gazette.


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