FCC finalizes a program to rip and replace Huawei, ZTE telecom equipment in the U.S.

July 15, 2021: -On Tuesday, in a unanimous vote, the Federal Communications Commission finalized a $1.9 billion program to rip and replace equipment from telecom companies of China considered national security risks by the U.S. government.

The program will subsidize the cost for small telecommunications companies in the U.S. to replace gear from firms such as Huawei and ZTE to secure U.S. networks.

To get the funds, U.S. telecom firms must serve 10 million or lesser customers. That’s a higher threshold than the last 2 million in an earlier version of the order. The companies that are eligible to obtain equipment from companies like Huawei or ZTE before June 30, 2020, can be reimbursed for their replacement costs.

U.S. officials have complained that Chinese companies are accountable to the  Republic of China and collect sensitive information on behalf of the People’s Liberation Army. The Chinese Communist Party has said that it does not engage in industrial espionage. Under former President Donald Trump, the U.S. added a slew of Chinese companies to its economic blocklist. These included the top smartphone maker of the country, Huawei, lead chipmaker SMIC, and the largest drone manufacturer, SZ DJI Technology.

To further isolate Huawei of China, the world’s largest telecommunications equipment manufacturer, Trump pushed U.S. partner countries to deny Huawei access to their 5G networks. The Trump administration specifically worked to keep members of the “five eyes” intelligence-sharing group the U.S., U.K., Canada, Australia, and New Zealand from working with Huawei.

Former Secretary of State Mike Pompeo previously described Huawei and other Chinese state-backed tech companies as “Trojan horses for Chinese intelligence.”

In April, the Biden administration added seven Chinese supercomputing entities to a U.S. economic blocklist citing national security concerns.

The Commerce Department added Tianjin Phytium Information Technology, Shanghai High-Performance Integrated Circuit Design Center, Sunway Microelectronics, the National Supercomputing Center Jinan, the National Supercomputing Center Shenzhen, the National Supercomputing Center Wuxi, and the National Supercomputing Center Zhengzhou to its blocklist. The seven entities were delisted for “building supercomputers used by China’s military actors, its destabilizing military modernization efforts, and weapons of mass destruction programs.”

Huawei USA Vice President Glenn Schloss said in a statement that the company was “disappointed” by the vote, calling the program “an unrealistic attempt to fix what isn’t broken.”

“The FCC initiative only creates extraordinary challenges for carriers in the most rural/remote areas of the U.S. to maintain the same high level and quality of service they provide to their customers without disruption,” Schloss said, adding that the FCC was “using policy to make a geopolitical statement.”