The U.S. House of Representatives is set to vote on the 2025 defense budget this week, which includes a $3-billion allocation to replace telecommunications equipment previously acquired from Huawei and ZTE. According to Reuters, the equipment provided by these companies comes with security risks, especially as People’s Republic China (PRC)-affiliated hackers have been conducting a massive cyber espionage campaign to compromise private U.S. telecommunications companies. Congress also wants an intelligence report that outlines Chinese espionage efforts and the country’s biotech capabilities.
The U.S. Federal Communications Commission (FCC) has previously created the Supply Chain Reimbursement Program (also known as the Rip and Replace Program)—worth $1.9 billion—so that network operators with ten million or fewer customers can get reimbursed for the removal, replacement, and disposal of hardware and services provided by Huawei and/or ZTE. However, the agency has previously said that the total cost of replacing everything could hit $4.98 billion. So, the $3 billion added to the National Defense Authorization Act for Fiscal Year 2025 should make up some of the shortfall, which would help over 100 U.S. carriers to get rid of potentially compromised equipment.
Although huge, this amount is still not enough, as the FCC Chairperson, Jessica Rosenworcel, has been urgently asking Congress for additional funding of $3.08 billion. So, even if the FCC gets the complete $3 billion, it still needs to pony up an additional $80 million to cover its expected expenses. Rosenworcel said that the $3.08 billion shortfall would put “both our national security and the connectivity of rural consumers who depend on these networks at risk,” further adding that a lack of funding “could eliminate the only providers in some regions” and even affect 911 coverage and service area.
Senator Maria Cantwell, chair of the Senate Commerce Committee, said that funding for this program will come from the auction of the advanced wireless spectrum AWS-3, so it will likely not be a direct burden to the average taxpayer. Aside from that, all the Huawei and ZTE equipment that needs to be disposed of must be replaced, likely by American-made products from Cisco and other major networking players. So, if Congress passes the complete amount (or maybe even gives the FCC a bit more for it to get the full requested amount), the U.S. telecom industry could finally break free from the supposed threat presented by the use of Huawei and ZTE communications equipment.
