Removing Chinese equipment will cost small carriers as much as $1.8 billion, according to a new report from the Federal Communications Commission. The report estimates that as much as $1.6 billion of the cost would be eligible for federal reimbursement but Congress has yet to appropriate the necessary funds.
In June, the FCC deemed ZTE and Huawei to be national security threats. The FCC has blocked carriers from using money they receive from the Universal Service Fund to buy or maintain equipment from the Chinese companies. The USF is supposed to subsidize coverage in rural areas.
Many carriers that serve rural areas use relatively inexpensive ZTE and Huawei equipment. After the FCC started collecting data about that in February, more than 50 carriers have told the agency they or their subsidiaries have tech from those companies in their networks.
However, it might be prohibitively expensive for them to tear all of that out and install equipment and services from other suppliers. The CEO of a small carrier in Oregon told The Verge in June that it could cost $1.5 million to replace Huawei equipment it bought for $500,000 in the first place a price he might not be able to cover before he receives a reimbursement from the government.
In a statement alongside the report, FCC Chairman Ajit Pai urged Congress to take action and allocate the necessary funds.
“By identifying the presence of insecure equipment and services in our networks, we can now work to ensure that these networks—especially those of small and rural carriers—rely on infrastructure from trusted vendors,” Pai said in a statement. “I once again strongly urge Congress to appropriate funding to reimburse carriers for replacing any equipment or services determined to be a national security threat.”
Congress has yet to appropriate the reimbursement funds, however, and FCC Chairman Ajit Pai has urged it to do so. “By identifying the presence of insecure equipment and services in our networks, we can now work to ensure that these networks—especially those of small and rural carriers—rely on infrastructure from trusted vendors,” he said in a statement. “I once again strongly urge Congress to appropriate funding to reimburse carriers for replacing any equipment or services determined to be a national security threat.”
