FCC puts $1.8B price tag on ripping and replacing Huawei and ZTE gear in U.S. networks

Rural service providers have told the government it would cost them about $1.83 billion to replace network gear from Huawei and ZTE,  the Federal Communications Commission (FCC) said in a report on Friday.

The FCC's new report also said that up to $1.6 billion of that cost could be eligible for federal reimbursement if Congress decides to appropriate the necessary funds. While President Trump and his team have raised national security concerns over the use of Chinese telecommunications equipment in U.S. networks, small service providers have said they would struggle to replace the routers and switches in a cost effective manner.

In June, the FCC formally designated Huawei and ZTE as threats to U.S. national security due to their close ties to the Chinese government. Despite that designation, small carriers in rural markets haven't replaced the networking gear because they can't afford to without federal assistance.

The FCC's report focused on service providers who receive support from Universal Services Fund, which was meant to bring more services to under-served rural areas.

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While the FCC's hands appear to be tied until Congress acts, Congress did establish a process in March for reimbursing the small carriers as part of the Secure and Trusted Communications Act. Along with Friday's report, FCC Chairman Ajit Pai issued a statement that urged Conges to act.

“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,” Pai said in a statement. “I once again strongly urge Congress to appropriate funding to reimburse carriers for replacing any equipment or services determined to be a national security threat.”