FCC needs additional $3 billion to help US carriers replace Huawei and ZTE equipment

The agency originally allocated for $1.9 billion for "rip and replace" measures.

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A logo of Huawei Technologies is seen at its exhibition space, at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France June 15, 2022. REUTERS/Benoit Tessier
Benoit Tessier / reuters

Removing Chinese equipment from American wireless networks will cost more than anticipated. On Friday, Federal Communications Commission Chairwoman Jessica Rosenworcel told Congress the agency needs an additional $3 billion to reimburse carriers that “rip and replace” their Huawei and ZTE infrastructure, reports Reuters.

In 2020, former President Donald Trump signed the Secure and Trusted Communications Networks Act, mandating that US telecoms replace any “suspect foreign network equipment” from their networks. The bill also required the FCC to create a program for compensating affected carriers. That same year, the agency estimated it would cost telecoms more than $1.8 billion to comply with the order, though it eventually set aside $1.9 billion for reimbursements.

After receiving 181 applications at the start of 2022, the FCC said US carriers had collectively asked for $5.6 billion to replace all their Huawei and ZTE equipment. On Friday, Rosenworcel said that funding “all reasonable and supported cost estimates” would cost a total of $4.98 billion, indicating the FCC found merit in the majority of claims it received at the start of the year.

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"Absent an additional appropriation, the Commission will apply the prioritization scheme Congress specified," Rosenworcel said in a letter to the Senate Committee on Commerce, Science, and Transportation. She added the FCC would begin processing reimbursements “as allocations are issued in the coming days.” Without additional funding from Congress, the FCC only has enough to reimburse companies about 40 percent of their costs.

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