FCC requests more rip-and-replace funding

The FCC now estimates that $4.98 billion is needed to fund rip-and-replace efforts

The Federal Communications Commission (FCC) last week asked for more funding to support communications providers’ “rip-and-replace” projects for Huawei and ZTE equipment, which has been banned by Congress for use in U.S. networks.

Chinese telecom equipment makers Huawei and ZTE were designated national security risks in 2020, and so telecom providers are now required to “rip-and-replace” any equipment in networks provided by the two companies.

However, this undertaking is not easy — or cheap. FCC Chair Jessica Rosenworcel stated in a recent letter to Congress that the $1.9 billion allocated to reimburse providers is $3.08 billion less than the $4.98 billion that the FCC estimates is needed. “Because the demand for program funds exceeds the appropriation, under the Secure and Trusted Communications Networks Act, the Commission is required to first allocate funding to applicants with two million or fewer customers,” she continued.

Rosenworcel further claimed that nearly 40% of providers can’t afford to replace their equipment and that without additional funding, several companies may have to shut down, which would leave Americans without communications services.

“Because Reimbursement Program recipients serve many rural and remote areas of the country where they may be the only mobile broadband service provider, a shutdown of all or part of their networks could eliminate the only provider in some regions,” she said. “Moreover, the inability of any Reimbursement Program recipient to fully remove, replace, and dispose of its covered equipment and services would raise national security concerns by leaving insecure equipment and services in our networks.”

The FCC began accepting applications for rip-and-replace funding in 2021. Those that have already received some funding have deadlines to finish the replacement process that range from May 29th, 2024, to February 4th, 2025, based on when funds were first received.