FCC Presumes It Will Cost Carries $1.8 Billion To Replace Huawei, ZTE Hardware

FCC Presumes It Will Cost Carries $1.8 Billion To Replace Huawei, ZTE Hardware: ZTE Corporation is a Chinese partially state-owned technology company that specializes in telecommunication. Founded in 1985, ZTE is listed on both the Hong Kong and Shenzhen Stock Exchange.

Removing and replacing ZTE and Huawei equipment in the US networks could cost carries over $1.8 billion, according to estimates they gave to the Federal Communications Commission. Most of that (over $1.6 billion) could be eligible for reimbursement.

In June, the FCC deemed ZTE and Huawei to be national security threats. The FCC stopped this carrier from using money they receive from the Universal Service Fund to buy or maintain equipment from the Chinese companies. The USF is meant to subsidize coverage in underserved areas.

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Many carriers that serve rural areas use inexpensive ZTE and Huawei equipment. After the FCC started retrieving data about that in February, more than 50 carriers have told the agency they or other juniors have tech from those companies in their networks.

Moreover, it might be prohibitively expensive for them to tear all of that out and install equipment and services from other suppliers.

Oregon:

The CEO of a small carrier in Oregon told The Verge back 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 form the government.

FCC Chairman Ajit Pai wants 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.

Paul Demaster