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FCC says operators need USD 3 bln more to replace Chinese equipment

US telecom regulator Federal Communications Commission (FCC) will need $3 billion more in funding to replace telecommunication gear made by Chinese firms Huawei and ZTE, the agency told Congress on Friday.

The additional funds would bring the total cost of purging US networks of telecom equipment that poses a national security risk to $4.9 billion, FCC chairwoman Jessica Rosenworcel said.

“To fund all reasonable and supported cost estimates…, the Reimbursement Program will require $4.98 billion, reflecting a current shortfall of $3.08 billion,” Rosenworcel said Friday in a letter to Senator Maria Cantwell, who heads the Committee on Commerce, Science, and Transportation.

Since Congress has only appropriated $1.9 billion to fund the removal process, companies would be reimbursed for only about 40% of costs, she said.

In 2019, Congress passed a law tasking FCC with compelling US telecom operators that receive federal subsidies to replace telecom equipment that pose a national security risk, with promises of reimbursement.

The FCC designated Huawei and ZTE as threats, compelling US companies to remove their gear or be frozen out of an $8.3 billion government fund to purchase new equipment.

However, to fund the so-called “rip and replace” effort, Congress only appropriated $1.9 billion, raising questions about how effectively the removal program would be implemented.

“Absent an additional appropriation, the Commission will apply the prioritization scheme Congress specified,” Rosenworcel said in the letter, adding that the Commission would begin processing reimbursement claims “as allocations are issued in the coming days.”

Companies are not required to complete the work until after they receive reimbursement. AsiaFinancial

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