US proposes cutting off funds for Chinese telecom equipment

The Federal Communications Commission proposes cutting off funds for Chinese telecom equipment from Huawei and ZTE.

The Federal Communications Commission proposes cutting off funds for Chinese telecom equipment from Huawei and ZTE. The US regulators consider the Chinese equipment in US telecommunications networks a threat to homeland security.

The Federal Communications Commission will vote next month on a proposal to cut off the funds, a decision that could have a significant impact on small, rural companies.

However, the Commission wants to evaluate the impact of the replacement of the Chinese equipment with the ones of other vendors. Congress in the past has already proposed setting huge funds to rip out the Chinese equipment.

“The government is seeking comments on how it can help companies financially if they have to do that. Bills in Congress have proposed setting $700 million to $1 billion aside for telecom companies to replace their networks.” reads a post published by the Associated Press.

Anyway, the economic impact of the replacement could be greater than initial thought, the AP Agency reports the case of a trade group for small rural wireless carriers that would spend up to $1 billion for its dozen companies to replace the Huawei and ZTE equipment.

Currently Huawei has tens of customers in the U.S. this means that the economic impact on US telecommunication firms could be severe.

The Chinese giant Huawei was already excluded by several countries from building their 5G internet networks. The United States, Australia, New Zealand, Romania, and Japan announced the exclusion of Huawei technology for their 5G internet networks.

In April 2018, the UK GCHQ intelligence agency warned UK telcos firms of the risks of using ZTE equipment and services for their infrastructure.

In December 2018, a Czech cyber-security agency is warned against using Huawei and ZTE technologies because they pose a threat to state security.

Both Huawei and ZTE did not immediately reply to the FCC proposal.

Pierluigi Paganini