FCC's $1.89 billion plan to rip and replace Huawei's gear from rural networks opens next month

Back in July, the FCC voted unanimously to spend $1.9 billion to rip out networking equipment manufactured by Chinese firms Huawei and ZTE that were used on networks built by smaller rural telecom companies. With Huawei and ZTE considered national security threats due to their alleged ties to the communist Chinese government, the last three U.S. administrations have worried about the Chinese manufacturers adding a back door to their telecom equipment to spy on American companies and consumers.

Huawei and ZTE have repeatedly denied the allegations but that didn't stop the U.S. from asking its allies over the last few years not to use Huawei's networking equipment to build out their 5G networks. Only a few U.S. allies heeded the request and Huawei remains the world's largest supplier of networking equipment.

According to Reuters, the FCC said today that it will open up its $1.9 billion program to rip out Huawei and ZTE gear on October 29th when it starts taking in applications. It will accept applications from that date through January 14th, 2022. Many of the rural carriers used Huawei's equipment because it was offered to them at a great price and with affordable terms.

In November 2019, the FCC banned rural carriers from tapping the $8.3 billion Universal Services Fund (USF) to help pay for equipment sourced from Huawei or ZTE. The USF is a fund managed by the FCC that collects fees paid by consumers to telecom carriers. At the same time, the FCC banned the rural carriers from tapping into the USF to service Huawei and ZTE networking equipment.

Rural carriers now will be able to apply for help getting reimbursed with the costs to "rip and replace" Huawei and ZTE gear from their networks. Wireless providers eligible for reimbursement can have between a minimum of two million customers to a maximum of 10 million.