The Federal Communications Commission (FCC) on Sept. 27 announced the start date for a $1.9 billion program to repay U.S. telecom carriers to “rip and replace” network equipment manufactured by Huawei, ZTE, and other China-based companies designated as national security threats.
Carriers will be able to apply for the funds beginning on Oct. 29 through Jan. 14, 2022. The FCC adopted rules in December last year requiring carriers to replace all equipment made by Huawei and ZTE.
The FCC designated Huawei and ZTE as national security threats on June 30 last year, barring U.S. firms from using an $8.3 billion government fund to buy equipment from either firm.
“Both companies have close ties to the Chinese Communist Party and China’s military apparatus, and both companies are broadly subject to Chinese law obligating them to cooperate with the country’s intelligence services,” FCC Chairman Ajit Pai said in a statement at the time. “We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure.”
The reimbursement fund was established by Congress in 2019. It covers telecom carriers with 10 million customers or less.
Rural carriers are facing high costs and difficulty in finding workers to replace the equipment, according to Reuters. The size of the $1.9 billion pot was determined in September last year based on an estimate for the removal and replacement of the equipment.
In March this year, the administration of President Joe Biden expanded on the designations made under President Donald Trump and added five more China-based firms to the list of national security threats: Hytera Communications Corp., Hangzhou Hikvision Digital Technology Co., and Dahua Technology Co.
“This list is a big step toward restoring trust in our communications networks,” Acting Chairwoman Rosenworcel said in a statement at the time. “This list provides meaningful guidance that will ensure that as next-generation networks are built across the country, they do not repeat the mistakes of the past or use equipment or services that will pose a threat to U.S. national security or the security and safety of Americans.”
In addition to taking steps to uproot Huawei and ZTE equipment at home, the United States has been warning allies about the presence of the equipment in their networks. National Security Advisor Jake Sullivan warned Brazil about the issue during a trip in August.
The FCC announcement comes days after a Canadian court dropped U.S. extradition proceedings against Huawei chief financial officer Meng Wanzhou, who is now back in China. The Chinese Communist Party released two Canadian citizens around the same time.