Ajit Pai, chairman of the US Federal Communications Commission (FCC), has devised a two-part scheme to erase Chinese hardware from American telecoms networks.
Firstly under the proposal, telcos would be forbidden from using any money from Universal Service Funds (USF) – a system of telco subsidies and fees overseen by the FCC – to buy hardware or services from "companies posing a national security threat, like the Chinese companies Huawei Technologies Co. and ZTE Corp".
Networks could continue to use any equipment already in place, but not make new purchases or spend USF dollars to maintain or improve that equipment.
The second part of the proposal would see some telcos, which receive USF money, remove equipment from networks. The proposal would "seek comment on how to provide financial assistance to these carriers to help them transition to more trusted suppliers".
It would also collect information to see just how much kit from Huawei and ZTE is already being used by US networks and how much it would cost to rip it out and replace it. It is believed that Huawei kit is mostly used by smaller, rural wireless providers because of its lower cost.
The FCC would then reimburse the networks at least some of the cost. The US government is also considering other ways of paying networks for the rip-and-replace scheme.
Only two companies – Huawei and ZTE – have been designated so far but the FCC may add other companies in the future that it considers a threat.
Chairman Pai issued the following statement:
When it comes to 5G and America's security, we can't afford to take a risk and hope for the best. We need to make sure our networks won't harm our national security, threaten our economic security, or undermine our values. The Chinese government has shown repeatedly that it is willing to go to extraordinary lengths to do just that. And Chinese law requires all companies subject to its jurisdiction to secretly comply with demands from Chinese intelligence services. As the United States upgrades its networks to the next generation of wireless technologies – 5G – we cannot ignore the risk that that the Chinese government will seek to exploit network vulnerabilities in order to engage in espionage, insert malware and viruses, and otherwise compromise our critical communications networks.
The USF distributes about $8.5bn a year to improve access to telecoms services, especially in rural areas. The money is raised by taxing the telcos' revenues from interstate and international calls.
The FCC will vote on the proposals at its November 19 meeting.
We've yet to hear back from Huawei but the company has in the past repeatedly denied it poses any security threat to the US. ®