huawei corporate logoIt could cost more than $1.87 billion to remove and replace Huawei and ZTE equipment in U.S. telecom networks, according to a new report released today by the Federal Communications Commission (FCC).

The ZTE and Huawei replacement cost estimate was based on information submitted by service providers that have deployed equipment from the companies –the majority of whom would qualify for reimbursement through the Secure and Trusted Communications Network Act,

At the end of June, the FCC designated Huawei and ZTE as national security risks and cut off any associated USF funding, as Telecompetitor reported.

That ruling built on the FCC’s November order barring the use of USF support for the purchase of equipment and services from companies that pose a national security threat, which prompted the regulator to collect the information leading to today’s report, which included a list of telecom carriers, affiliates and subsidiaries, that have reported using at least some Huawei and ZTE equipment or services.

ZTE, Huawei Replacement Cost
The majority of the replacement cost — about $1.6 billion — came from providers that would appear to be eligible for reimbursement under the Secure and Trusted Communications Network Act, the FCC said. However, the act authorized only $1 billion, as Telecompetitor reported. The FCC announcement added that some providers of advanced telecom services may not have participated in the initial information collection and could still be eligible for reimbursement.

“It is a top priority of our nation and this Commission to promote the security of our country’s communications networks,” said FCC Chairman Ajit Pai, in a prepared statement about the ZTE and Huawei replacement cost estimate. “That’s why we sought comprehensive information from U.S. carriers about equipment and services from untrusted vendors that have already been installed in our networks. By identifying the presence of insecure equipment and services in our networks, we can now work to ensure that these networks—especially those of small and rural carriers—rely on infrastructure from trusted vendors.”

“I thank the FCC for its continued work on this important national security issue, said Steven K. Berry, president and CEO of the Competitive Carrier’s Association, in a prepared statement. “CCA strongly supports efforts to protect and secure our nation’s communications networks. Today’s release further underscores the need for Congress to fully fund the Secure and Trusted Communications Networks Reimbursement program to ensure that carriers, especially those serving rural areas, have the resources needed to remove covered equipment and services while keeping Americans connected.”

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