FCC finalizes $1.9bn compo deal for telcos forced to rip'n'replace Huawei, ZTE gear

'An unrealistic attempt to fix what isn’t broken', Big H mutters


The FCC has voted to reimburse medium-sized as well as smaller American telcos strong-armed into replacing all of their Huawei and ZTE networking equipment.

The US regulator will now dish out up to $1.9bn to communications providers that have 10 million or fewer subscribers and were ordered in December to rip'n'replace the Chinese gear for national security reasons. That order applied to any provider tapping into the FCC's Universal Service Fund, a subsidy they pretty much all rely on.

Previously, telcos with two million or fewer customers were eligible for reimbursement though that directive was updated [PDF] updated on Tuesday so that larger, mainly rural carriers will be compensated too.

Qualifying comms providers dumping their Huawei and ZTE hardware can apply for reimbursement starting from October 29, according to the FCC’s acting chairwoman Jessica Rosenworcel [PDF].

A Huawei spokesperson told The Register the mega-manufacturer was “disappointed” with the FCC’s decision. “The so-called ‘Rip & Replace’ rules are simply an unrealistic attempt to fix what isn’t broken,” they said in a statement.

“The FCC initiative only creates extraordinary challenges for carriers in the most remote areas of the US to maintain the same high level and quality of service they provide to their customers without disruption. These rules will deny consumers broadband connectivity, disrupt business, education and emergency response and cost tax-payer’s money, while ultimately failing to achieve the core objective of actually providing greater security. It is simply using policy in an effort to make a geopolitical statement.”

ZTE was not immediately available for comment.

The plan to reimburse telcos was put in place after Congress passed the Consolidated Appropriations Act, 2021 [PDF]. The FCC has also proposed new rules to ban providers from installing Huawei and ZTE equipment to prevent their technology from being used in the US.

In other Huawei-related news, it reached a settlement with Verizon in a patent infringement battle that kicked off last year in Texas. Verizon was accused of ripping off 12 Huawei patents and failing to pay license fees.

“Huawei is pleased that we have reached an agreement with Verizon, ending the companies' patent litigation,” a spokesperson for the Chinese titan told us.

“The terms of this agreement are confidential, however Huawei is proud of the hard work of our lawyers. Huawei holds more than 100,000 active patents worldwide, including about 10,000 US patents.”

Verizon shared that sentiment in its canned statement, saying it "is happy with the settlement reached." ®

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