FCC wants $3 billion extra to remove Huawei network equipment

Removing all network equipment from Huawei and ZTE in American networks is a lot more expensive. The cost for this is estimated at nearly $5 billion. That means that the regulator is more than 3 billion dollars short.

Jessica Rosenworcel, chair of the Federal Communications Commission (FCC), wrote in a letter to Democratic Senator Maria Cantwell, Reuters news agency reported. Cantwell is the chairman of the Senate committee on this.

‘Huawei and ZTE pose a threat to national security’

The US government on the one hand and Huawei and ZTE on the other have been at odds with each other for several years. Then-President Donald Trump accused Huawei of spying on Western companies and sharing this information with the Chinese government and the People’s Liberation Army. Huawei has always denied the allegations and continues to adhere to all applicable rules.

But to no avail: In the summer of 2019, Trump put Huawei, ZTE and seventy other Chinese tech companies on the  Entity List. American companies were not allowed to do business with the parties on this blacklist.

The decision was supported by a ruling from the FCC. The telecom watchdog determined that Huawei and ZTE  posed a threat to US national security. In its own words, there was “overwhelming evidence” that both companies were guilty of espionage. In addition, both companies reportedly had close ties to the Chinese Communist Party and the military and are required by law to cooperate with government data requests.

“We will not allow the Chinese Communist Party to exploit weaknesses in our network and expose our vital communications network,” the FCC said. ZTE asked the regulator to reconsider its opinion, but the agency persisted.

FCC falls billions short of executing repayment program

The House of Representatives and the Senate then passed a bill to remove Huawei and ZTE’s network equipment from corporate America. Former President Trump has reserved an amount of one billion dollars for this. That was gradually increased to 1.9 billion dollars.

Despite the gigantic amount, it is insufficient to carry out the plans. FCC board chair Jessica Rosenworcel reported late last week that the repayment program is a lot more expensive than expected, according to the Reuters news agency. According to her, an amount of $ 4.98 billion is needed to remove all network equipment from the Chinese tech companies. In short, the FCC is short of $3.08 billion to implement the plans.

If the amount for the reimbursement program is not increased, companies and organizations will only be reimbursed 40 percent of the total costs. The FCC says it will simply handle the reimbursement requests that come in. American companies do not have to remove all network equipment until they have received compensation for this.

T-Mobile says goodbye to Huawei, chooses Ericsson

The discussion about possible cyber espionage by Huawei is taking place in several countries. In addition to the US, the UK and India decided in 2020 not to involve the Chinese in the construction of their 5G network. Without naming Huawei, the Dutch government decided in 2019 not to allow equipment in the core of its 5G networks if it comes from a “state, entity or person that may have the intention to misuse or abuse a Dutch communications network.” to drop out”. Parties that work closely with or are under the influence of such a party are also refused.

Earlier this month, T-Mobile announced that it will no longer purchase network equipment from Huawei. Instead, the telecom company is partnering with Ericsson. “The choice was preceded by an intensive selection process. The assessment looked at, among other things, quality, equipment performance, innovation, sustainability and of course costs. Ericsson came out on top in this regard,” explained T-Mobile CEO Søren Abildgaard.

‘Huawei has access to all systems’

At the beginning of 2021, Huawei came under serious fire in our country for alleged wiretapping. The company would secretly have access to a database of customer and billing information of Telfort customers for years. “Huawei could access customer data and if they wanted they could have passed everything on to China. There has just never been an investigation into what exactly they copied,” an insider told de Volkskrant about the matter.

KPN, Telfort’s parent company, has always denied that Huawei had penetrated the core of its network. Anonymous sources claim that the manufacturer of network equipment still has access to all  KPN systems.

Huawei has always denied the allegations of espionage.

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