Enlarge /. The Huawei logo at the Smart City Expo World Congress in Barcelona in November 2019.
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The U.S. House of Representatives and the Senate approved laws to create a $ 1 billion fund that small telecommunications providers can use to remove and replace Huawei and ZTE network devices.
The bill, which is awaiting President Trump's signature, also prohibits telecommunications companies from using Federal Communications Commission funds to purchase Huawei or ZTE devices. However, Congress's action is largely double, as the FCC has already approved a ban.
The law on secure and trustworthy communication networks was passed yesterday in December by the House of Representatives and the Senate. Huawei or ZTE are not mentioned by name, but the FCC must compile a list of equipment providers that "pose national security risks" and prohibit ISPs and telephone companies from using FCC funds to buy, rent, lease, or maintain the manufactured equipment and services to be used by these companies.
The FCC did this in November when it closed its ban on the use of universal services for Huawei or ZTE devices. Both the FCC action and legislation allow the FCC to add providers to this list as needed. Neither of the two bans technically requires ISPs to remove previously purchased Huawei or ZTE devices. However, the FCC is working on another proposal to request the removal of FCC-funded Huawei and ZTE devices, and legislation would help the FCC and ISPs to achieve this.
In particular, the bill instructs the FCC to set up a $ 1 billion reimbursement fund for ISPs with 2 million or fewer customers. The funds would be used to "permanently remove", "replace" and "dispose" of Huawei or ZTE devices and equipment from providers that will be put on the prohibited list in the future. The FCC was already looking for a public opinion on paying for removal and device replacement, but had not set up a fund.
"These laws are passed at a critical time," said the Rural Wireless Association, a trading group that represents small ISPs, yesterday. "Without this crucial funding, rural carriers would lack the funds to quickly replace the prohibited equipment."
Democratic and Republican members of the House Commerce Committee also praised the Senate action, saying, "The existence of Huawei technology on our networks poses an immense threat to America's national and economic security."
A Huawei spokesman told Ars that the legislation "is significantly underfunded, would take longer than expected [to be implemented], and could endanger some of our customers serving the most underserved areas … It does not address key issues of network security, but sells people and operators in rural areas at the expense of taxpayers. "
FCC will suggest replacement providers
To assist ISPs in the search for replacement technology, the draft law instructs the FCC to "compile a list of proposed replacement products for physical and virtual communication devices, application and management software". The list must be "technology neutral".
The $ 1 billion would likely come from the FCC's existing universal service fund. However, if the FCC determines that $ 1 billion is insufficient to "fully fund all approved reimbursement requests," the Commission will be directed to "notify Congress" immediately, which would likely consider adding money to the fund. Refund financing can be used to buy, rent, or lease replacement equipment and services. The bill tries to prevent the misuse of funds by asking ISPs to create a "detailed statement" of how they spend the money.
The FCC launched an online portal this week for ISPs receiving FCC funds to submit information about the use of Huawei and ZTE devices and services. The data collection is intended to determine how many Huawei and ZTE devices are in FCC-funded networks and what costs are associated with removing and replacing the devices.
Pai justified the ban on Huawei and ZTE because they "have close ties to the Chinese Communist government and military apparatus. Both companies are subject to Chinese law, which largely obliges them to cooperate with and secretly handle all requests from the country's intelligence agencies hold Both companies have committed behaviors such as intellectual property theft, bribery, and corruption. "
Huawei sued the FCC in December to stop the ban, but a US District Court judge ruled in favor of the FCC.
US government officials recently said they had "evidence that Huawei can secretly access sensitive and personal information on systems that it maintains and sells worldwide". But they haven't released this evidence, and Huawei said it "never, and never will, covertly access telecommunications networks, nor do we have the ability to do so."
The FCC's Universal Service Fund distributes approximately $ 8.5 billion annually and is paid by Americans through fees on their phone bills. There are several universal utilities, but the ones most affected by the Huawei / ZTE ban are the Connect America Fund and the Rural Digital Opportunity Fund, which provide ISPs with money for broadband deployment in rural areas.