U.S. to raise $1.9 billion for “Rip and Replace”
Once again citing security, the U.S. government is on the verge of approving a $1.9 billion program to remove any telecom equipment used in the U.S. that was produced by Huawei and ZTE. This summer, both were officially deemed security threats by the FCC. As a result, rural carriers were blocked from tapping into the $8.3 billion Universal Service Fund (USF) to buy networking gear from either supplier. And now the government is demanding that these smaller carriers “rip and replace” this gear. Many rural carriers used the USF fund to purchase Huawei equipment because it is considered to be among the best available. Additionally, the company has connections with China’s state-run bank allowing it to offer more affordable deals.
The $1.9 billion that the government says is needed to rip out Huawei and ZTE gear and replace it is basically the same amount of money that it estimated last year would be needed to complete this task. Last year’s estimate called for this process to take approximately two years to complete. Back on December 11th of this year, FCC Chairman Pai explained the goals of the program by stating, “…we adopted rules requiring certain carriers to remove from their networks equipment that poses a threat to our national security and the integrity of the country’s communications networks and implementing the Secure and Trusted Communications Networks Reimbursement Program that will help smaller service providers shoulder the cost of removing and replacing such equipment.”
The COVID Relief Broadband Package totals $7 billion; the carriers that qualify to be reimbursed for the cost of ripping out offending networking gear must have fewer than 10 million subscribers. Priority goes to those wireless providers with 2 million subscribers or less. Also included in the bill is $250 million for telehealth support from the FCC and $1 billion for a program that backs tribal broadband connectivity. The bill is part of a year-end spending package that includes $3.2 billion in emergency broadband benefits for low-income Americans.
