US carriers want to junk three times more Chinese comms kit than planned
FCC budget to rip and replace Huawei and ZTE kit was $1.9B. It received $5.6B of applications
The United States Federal Communications Commission has revealed that carriers have applied for $5.6 billion in funding to rip and replace China-made communications kit.
The applications were made under the Secure And Trusted Communications Reimbursement Program, which offers to reimburse carriers with under ten million subscribers to ditch kit from Chinese manufacturers Huawei and ZTE. The FCC and Congress want them to do so because the USA fears made-in-China comms kit contains backdoors that Beijing could exploit to either eavesdrop on communications or cut them off entirely.
Replacing made-in-China products with kit designed by American firms is supposed to be a route to improved national security.
Congress set aside $1.9 billion to repay carriers who rip and replace Chinese kit and applications to access the cash opened in November 2021, then closed on January 28 2022.
Last Friday, FCC Chair Jessica Rosenworcel advised [PDF] Congress that the FCC has totted up all the applications and found carriers have applied for $5.6 billion of reimbursements – almost triple the allotted funds.
In the FCC's announcement, Rosenworcel appears to acknowledge that the $3.7 billion gap between the allocated funding and carriers' requests is a problem, stating "I look forward to working with Congress to ensure that there is enough funding available for this program to advance Congress's security goals and ensure that the US will continue to lead the way on 5G security."
Which rather puts the ball in Congress's court. Having endorsed an effort to replace Huawei and ZTE kit on national security grounds, the USA's elected representatives won't be in a great position if they don't pay to get rid of equipment that's been declared dangerous.
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Waiting in the wings are the likes of Cisco, Juniper, and Arista, all of which stand to profit rather handsomely from the FCC's re-imbursements.
Whether they can deliver the products eligible carriers need is another matter. Cisco has already warned that its component supply problems will persist deep into 2022, while Arista and Juniper have advised that some components they need won't be available until mid-2023.
If Beijing really does have backdoors into Huawei and ZTE kit, it therefore has plenty of time to deploy them. ®