Acquisition

FCC estimates $1.8 billion to replace Huawei, ZTE telecom parts

communications tower (noolwlee/Shutterstock.com) 

The Federal Communications Commission has placed a price tag on getting Huawei and ZTE out of America's rural telecommunications infrastructure: $1.84 billion.

That's how much taxpayer money the agency thinks it will need to incentivize U.S. telecoms to remove and replace gear from the vendors, according to data pulled together by the Wireline Competition Bureau and the Office of Economics and Analytics.

An executive order issued by the White House last year sought to eliminate or curtail any U.S. government investments in foreign IT or communications products that are deemed a potential national security risk. Later that year, the FCC banned rural telecoms from using its Universal Service Fund to buy equipment from the two Chinese telecoms, but that didn't address the parts and components that were already in place.

While security concerns around Huawei and ZTE have been floating around for years, they 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.

FCC leaders weighed the benefits and drawbacks of publicly releasing the list of eligible telecommunications providers but ultimately told staff to consider that "the public interest in knowing whether a carrier uses equipment and services from Huawei and ZTE would significantly outweigh any interest the carrier would have in keeping such information secret."

About the Author

Derek B. Johnson is a former senior staff writer at FCW.

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