Huawei Replacement Equipment Reimbursement Program Launches in October in US Networks

The Federal Communications Commission (FCC) today said it will soon launch a reimbursement program for the dismantling of network equipment manufactured by Chinese companies that pose a threat to national security, such as Huawei and ZTE. The $ 1.9 billion programs is primarily targeted at telecom operators in rural areas. Applications for participation in the program will be open from October 29, 2021, to January 14, 2022.

Last year, the FCC called Huawei and ZTE a threat to national security, thereby barring U.S. companies from using an $ 8.3 billion government fund to buy equipment from those companies. In December, the FCC passed regulations requiring carriers with ZTE or Huawei equipment to replace it with equipment from other manufacturers.

Substitution is a major challenge for operators serving rural areas because it is costly and the revenues directly related to the number of customers are relatively small.

The final FCC decision expanded the range of companies eligible for reimbursement from those with 2 million customers or fewer to companies with 10 million customers or fewer. In September 2020, the commission estimated that removing and replacing Huawei and ZTE equipment would cost $ 1.837 billion.

In March, the FCC identified five Chinese companies as national security threats. In addition to Huawei and ZTE, the list also includes Hytera Communications, Hangzhou Hikvision Digital Technology and Zhejiang Dahua Technology. The US government has banned federal agencies from buying goods or services from them.

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