Home Stock U.S. to open program to replace Huawei equipment in U.S. networks

U.S. to open program to replace Huawei equipment in U.S. networks

imageStock Markets39 minutes ago (Sep 27, 2021 02:56PM ET)

(C) Reuters. FILE PHOTO: A Huawei logo is seen at the Mobile World Congress (MWC) in Shanghai, China February 23, 2021. REUTERS/Aly Song/File Photo

WASHINGTON (Reuters) – The U.S. Federal Communications Commission (FCC) on Monday said it would open a $1.9 billion program to reimburse mostly rural U.S. telecom carriers for removing network equipment made by Chinese companies deemed national security threats like Huawei and ZTE Corp (HK:0763).

The program, which was finalized in July, will open Oct. 29 for applications through Jan. 14, 2022.

Last year, the FCC designated Huawei and ZTE as national security threats to communications networks – a declaration that barred U.S. firms from tapping an $8.3 billion government fund to purchase equipment from the companies. The FCC in December adopted rules requiring carriers with ZTE or Huawei equipment to “rip and replace” that equipment.

The issue is a big one for rural carriers that face high costs and difficulty finding workers to remove and replace equipment.

The FCC’s final order expanded the companies eligible for reimbursement from those with 2 million or fewer customers to those with 10 million or fewer customers.

The FCC in September 2020 estimated it would cost $1.837 billion to remove and replace Huawei and ZTE equipment from networks.

In June, 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, 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 affected companies included the previously designated Huawei and ZTE, as well as 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.

U.S. to open program to replace Huawei equipment in U.S. networks

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