US launches Huawei equipment replacement program in US networks

WASHINGTON, Sept.27 (Reuters) – The United States Federal Communications Commission (FCC) on Monday announced that it would open a $ 1.9 billion program to reimburse most of America’s rural telecommunications operators for the withdrawal of network equipment made by Chinese companies considered national security threats like Huawei [RIC:RIC:HWT.UL] and ZTE Corp (000063.SZ).

The program, which was finalized in July, will open on October 29 for applications until January 14, 2022.

Last year, the FCC named Huawei and ZTE as national security threats to communications networks – a statement that prohibited U.S. companies from tapping into an $ 8.3 billion government fund to buy equipment from companies. The FCC passed rules in December requiring operators with ZTE or Huawei equipment to “tear and replace” that equipment.

The problem is significant for rural hauliers who face high costs and difficulty finding workers to remove and replace equipment.

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

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

In June, the FCC voted in favor of a plan to ban equipment approvals in U.S. telecommunications networks from Chinese companies considered national security threats like Huawei and ZTE. The FCC could also revoke previous equipment approvals issued to Chinese companies. In March, the FCC designated five Chinese companies as posing a threat to national security under a 2019 law to protect U.S. communications networks.

The companies involved included previously named Huawei and ZTE, as well as Hytera Communications Corp (002583.SZ), Hangzhou Hikvision Digital Technology Co (002415.SZ) and Zhejiang Dahua Technology Co (002236.SZ).

In August 2020, the US government banned federal agencies from purchasing goods or services from any of the five Chinese companies.

Reporting by David Shepardson; Editing by Steve Orlofsky

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