US FCC approves final plan to replace Huawei and ZTE equipment worth $1.9 billion

According to Reuters, the US Federal Communications Commission (FCC) passed a $1.9 billion plan on the 13th to reimburse US telecom operators for the cost of removing equipment from Chinese companies such as Huawei and ZTE that are considered "threats to US national security" from their telecom networks. Huawei issued a statement saying that the FCC's move would only bring huge challenges to operators in most rural or remote areas of the United States.

According to reports, the FCC determined in 2020 that Huawei and ZTE posed a national security threat to the US communications network and prohibited US companies from using $8.3 billion in US government funds to purchase equipment produced by these companies. The FCC issued regulations in December last year requiring US operators to "remove and replace" Huawei and ZTE equipment.

Screenshot of Reuters report

According to the report, FCC Acting Chairman Jessica Rosenworcel claimed that "there is a serious risk that these devices could be manipulated, damaged or controlled by foreign actors." Rosenworcel also declared, "We will evaluate the network one by one, the base station one by one, and the router one by one until we eliminate our equipment that may harm national security."

However, Reuters also reported that this is a big issue for rural telecom operators because they face high costs and find it difficult to find workers to dismantle the equipment.

Huawei responded in a statement, saying the regulations were "purely an unrealistic attempt to fix something that is not broken. The FCC's move will only create huge challenges for carriers in most rural or remote areas of the United States, making it impossible for them to maintain the same high level and quality of service they provide to their customers without interruption."

The report said that the FCC's final order expanded the scope of operators eligible for cost reimbursement from operators with fewer than two million customers to operators with fewer than 10 million users. In September 2020, the FCC estimated that it would cost $1.837 billion to remove equipment produced by Huawei and ZTE from the U.S. communications network and replace it with other equipment.

Screenshot of FCC official website

In the past, the United States has frequently used the excuse of "national security" to suppress Chinese companies. In March of this year, the FCC issued a new "blacklist" based on a law enacted in 2019 to protect the US communications network, identifying five Chinese companies as "threats to US national security". The five companies are Huawei, ZTE, Hikvision (61.610, -1.02, -1.63%), Hytera (4.860, -0.06, -1.22%) and Dahua. In June of this year, the FCC voted to pass a ban on the use of equipment from Chinese companies such as Huawei and ZTE in US telecommunications networks. According to the ban, the FCC can also revoke previously authorized applications.

Chinese Foreign Ministry spokesman Zhao Lijian once said that to this day, the United States is still abusing its state power to suppress Chinese companies on the grounds of so-called "national security" without any evidence. This is naked economic and technological bullying, a blatant denial of the market economy principles that the United States has always advocated, and it also exposes the hypocrisy of the so-called fair competition of the United States. Zhao Lijian said that we once again urge the United States to stop generalizing the concept of national security and politicizing economic issues, and provide a fair, just and non-discriminatory environment for Chinese companies to operate normally in the United States. China will continue to support relevant Chinese companies in safeguarding their legitimate rights and interests in accordance with the law.