Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

FCC says most requests for funds to replace Chinese telecom equipment are deficient

Published 06/15/2022, 06:11 PM
Updated 06/15/2022, 11:10 PM
© Reuters. The Huawei logo is pictured in the Manhattan borough of New York, New York, U.S., July 22, 2019. REUTERS/Carlo Allegri

By David Shepardson

WASHINGTON (Reuters) - The Federal Communications Commission (FCC) told Congress on Wednesday it had found deficiencies in two-thirds of applications to reimburse U.S. carriers for removing equipment from Chinese companies deemed national security threats.

FCC Chair Jessica Rosenworcel said of 181 applications filed by mostly rural carriers under a $1.9 billion program, 122 were found to be "initially materially deficient."

The FCC told applicants they have 15 days to fix their applications, and it "expects to complete this process by July 15."

The FCC currently estimates the cost estimate to remove the equipment from companies like Huawei and ZTE Corp (HK:0763) from the "rip and replace" program is $5.3 billion, much higher than what Congress set aside.

In July 2021, the FCC voted to finalize the program that had been funded by Congress in December 2020.

The FCC designated Huawei and ZTE as national security threats to communications networks in July 2020 - a declaration that barred U.S. firms from tapping an $8.3 billion government fund to purchase equipment from the companies.

The FCC in December 2020 adopted rules requiring carriers with ZTE or Huawei equipment to "rip and replace" that equipment.

The issue is a big one for rural carriers that face high costs and difficulty finding workers to remove and replace equipment.

Huawei said last year the "FCC initiative only creates extraordinary challenges for carriers in the most rural/remote areas of the U.S. to maintain the same high level and quality of service they provide to their customers without disruption."

Rosenworcel's letter noted the FCC "will allocate funding first to approved applications that have 2 million or fewer


© Reuters. The Huawei logo is pictured in the Manhattan borough of New York, New York, U.S., July 22, 2019. REUTERS/Carlo Allegri

She said to date "all but one of the eligible

applicants falls within the first prioritization group, and the collective demand of these applicants exceeds available funds for the program."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.