The U.S. House of Representatives is set to vote on allocating $3 billion to expedite Huawei and ZTE equipment removal from American telecom networks. This funding is part of a broader effort to enhance U.S. telecom security and address national security risks posed by Chinese technology firms.
Huawei and ZTE, Chinese telecommunications giants, have been labeled as security threats by the U.S. government. Concerns stem from the potential for their equipment to be used for surveillance or data breaches, given the companies' ties to the Chinese government. Huawei and ZTE have consistently denied these accusations, but bipartisan support for removing their equipment reflects the perceived national security risks.
Funding Challenges: FCC’s Plea for More Support
The FCC (Federal Communications Commission) previously estimated that fully replacing Huawei and ZTE equipment would cost $4.98 billion, yet only $1.9 billion has been allocated so far. FCC Chairwoman Jessica Rosenworcel recently highlighted a funding shortfall of $3.08 billion, warning that delays could jeopardize national security and disrupt critical services like 911 in rural areas.
“Without sufficient funds, rural network providers might face closure, which could severely impact connectivity in underserved areas,” Rosenworcel said. The $3 billion FCC funding proposal aims to fill this gap, helping over 100 telecom providers comply with federal mandates while maintaining service continuity.
National Security and Telecom Security
This initiative is a key component of U.S. telecom security strategy. By removing Chinese-made equipment, the U.S. seeks to protect its networks from potential espionage threats and ensure data integrity. Beyond funding, the effort ties into wider geopolitical tensions between the U.S. and China, particularly in the technology and cybersecurity sectors.
As part of the 2025 defense budget, the funding will be drawn from proceeds of spectrum auctions. Senator Maria Cantwell, Chair of the Senate Commerce Committee, emphasized that this move aligns with America's commitment to safeguarding advanced wireless networks and strengthening its telecom resilience.
This equipment removal initiative is part of a "rip and replace" program mandated by the Secure and Trusted Communications Networks Act of 2019, which requires rural telecom operators to remove and replace these components.
What Happens Next?
The House vote, expected this week, will decide the fate of this $3 billion package as part of the annual defense bill. If approved, it will enable the FCC to fully reimburse carriers and complete the program, ensuring a more secure and robust telecom infrastructure.
The funding will primarily benefit rural telecom providers, who have struggled to finance the replacement of Chinese equipment. Competitive Carriers Association CEO Tim Donovan stated, “This funding is desperately needed to fulfill the mandate to remove and replace covered equipment while maintaining connectivity for tens of millions of Americans.”
However, questions remain about whether the allocated funds will be sufficient, as replacing advanced network solutions from companies like Huawei may involve additional costs. The program's success depends on swift congressional action, efficient fund allocation, and the ability of telecom providers to implement changes without significant service disruptions.