FCC: Applications Open Soon for Huawei/ZTE Replacement Fund

The US telecoms regulator revealed more details on a scheme to reimburse smaller carriers who procured kit from Chinese providers, which was subsequently deemed a national security risk.

The Federal Communications Commission (FCC) officially designated Huawei and ZTE a security risk in July 2020, having first revealed plans to force carriers to rip-and-replace Chinese equipment the previous year.

An update yesterday claimed that small telecoms carriers would be able to apply for a portion of the Secure and Trusted Communications Networks Reimbursement Program from October 29. However, the window for applications will close on January 14 2022.

There’s $1.9bn up for grabs in total, but several rules are attached. First, carriers must serve 10 million or fewer customers, and the equipment in scope is limited to that produced by Huawei and ZTE and purchased before June 30 2020.

The FCC’s Wireline Competition Bureau will assess whether an application is eligible based on the “reasonableness of the cost estimates” provided by the applicant. These must cover the costs for removing, replacing, and disposing of communications equipment and services.

If there’s a problem with applications, the carrier will have 15 days to fix any highlighted issued before it is denied in full.

If older networks can’t be replaced due to the legacy nature of the equipment, they may be replaced by 5G/LTE kit.

Huawei and ZTE’s fortunes have taken a tumble since the US singled the firms out for special treatment. Allies, including the UK, Australia, and New Zealand, have taken steps to ban Huawei’s and ZTE’s equipment from their 5G networks.

In related news, Huawei CFO Meng Wanzhou was released from house arrest in Vancouver over the weekend after striking a plea deal with US prosecutors.

Under the terms of the deal, she admitted misleading a global banking partner about the nature of the firm’s business in Iran and its efforts to evade US sanctions.