U.S. rural telecom networks need $1.8 billion to remove Huawei, ZTE equipment
U.S. rural telecommunications networks, which have relied on inexpensive network equipment from China’s Huawei Technologies Co and ZTE Corp (000063.SZ), have told the government that it would cost $1.837 billion to replace those switches and routers, the Federal Communications Commission said on Friday.
In June, the FCC formally designated Huawei and ZTE as
threats to U.S. national security, a declaration that bars U.S. firms from
tapping an $8.3 billion government fund to purchase equipment from the
companies.
The U.S. telecommunications regulator voted last year to
propose requiring rural carriers to remove and replace equipment from the two
Chinese companies from U.S. networks.
FCC commissioners said the report shows the need for
Congress to approve funding to replace that equipment. Congress has authorized
reimbursements but has not approved the money.
The FCC said it believes the carriers would be eligible for
reimbursements of about $1.62 billion.
“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,” FCC Chairman Ajit Pai said, urging Congress “to appropriate
funding to reimburse carriers for replacing any equipment or services
determined to be a national security threat so that we can protect our
networks.”
The FCC identified more than 50 mostly smaller telecom
companies with ZTE or Huawei equipment or using services from the companies, as
well as a few larger companies like CenturyLink (CTL.N) and Verizon
Communications Inc (VZ.N)
Verizon said its networks do not include equipment from
Huawei or ZTE but has a small number of devices, called VoiceLink, made by
Huawei that some customers use to make voice calls. Verizon said it expects to
retire all VoiceLink devices this year.
CenturyLink said the “legacy equipment at issue cannot be
used to route or redirect user traffic” and is not covered under restrictions
established by Congress. The company added it has “actively been removing and
replacing equipment and continue to work with federal policymakers to
accelerate the process.”
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