FCC says $3 billion more needed for Huawei ‘rip and replace’

In a letter to Congress, Rosenworcel said were the Commission to fund all ‘reasonable and supported’ cost estimates in the approved applications, the Reimbursement Program would require approximately $4.98 billion, ‘reflecting a $3.08 billion shortfall from the current appropriation of $1.9 billion. ‘

Nearly 40% of the program’s participants reported that they cannot complete the necessary ‘rip and replace’ work without additional government funding, while several recipients reported that the funding shortfall could result in the shutdown of their networks or a need to withdraw from the program, stated the letter.

The program has received over 20,000 reimbursement claims, and the agency has granted 64 extensions of time to complete their ‘rip and replace’ obligations— including 52 based in whole or in part on the funding shortfall, we’re told. 

Given the funding shortfall, the Commission is apparently required to first allocate funding to applicants with two million or fewer customers. These applicants will receive ‘prorated support of only 39.5% of reasonable costs.’ 

The inability of telcos to fully remove, replace, and dispose of equipment and services would also ‘raise national security concerns by leaving insecure equipment and services in US networks’ and could also raise network compatibility issues associated with piecemeal replacement of equipment, argues the letter.

“This program secures our communications networks by supporting the removal, replacement, and disposal of communications equipment and services produced or provided by Huawei Technologies Company or ZTE Corporation,” said Rosenworcel. “The successful implementation of the Reimbursement Program is one of the Commission’s top priorities. I am writing … to emphasize again the urgent need for full funding of the Reimbursement Program.”

For a detailed run down of the wider dispute between the US and China, which is linked to the Huawei ban and so much else about the technology sector in 2024, check out our deep dive A look at the US-China tech cold war.