FCC: US telcos a long way off, several billions short of removing Chinese kit

Updated The US Federal Communications Commission (FCC) has reiterated to Congress that more cash is needed if smaller broadband providers are to be compensated for removing Chinese telecoms kit deemed a security risk.

FCC Chairwoman Jessica Rosenworcel joined the chair of the Senate Commerce Committee Maria Cantwell in warning that the $3 billion which the Spectrum and National Security Act would provide is needed for broadband providers to replace equipment supplied by Chinese companies.

A report [PDF] published earlier this month found that 40 percent of Rip and Replace program participants lack the funding to complete the work. With most of these located in rural areas, the current shortfall in funding "disproportionally threatens service to rural communities," the report claims.

"While Congress provided $1.9 billion to operate the Rip and Replace program, this latest report by the FCC makes clear that this amount is not enough to secure our networks; particularly those from providers in small and rural areas," Rosenworcel said in  a statement.

"We currently face a $3.08 billion shortfall and, unless we receive an additional appropriation, we can only provide forty cents on the dollar to those companies in reimbursement, which threatens our national security and risks the shutdown of rural networks," she warned.

This issue has not suddenly crept up on US lawmakers. More than a year ago, Cantwell and Rosenwercel issued alerts that the Reimbursement Program would require "approximately $4.98 billion," and this reflected a $3.08 billion shortfall from the current appropriation funding of $1.9 billion.

That warning was a re-run from a year before that when Rosenworcel wrote to Congress to notify it (you guessed it) that the cost of the Reimbursement Program amounts to $4.98 billion, of which Congress had appropriated $1.9 billion.

The $1.9 billion to reimburse US telcos for replacing all of their Huawei and ZTE networking equipment was approved almost exactly three years ago, in July 2021.

The latest report, the fourth on the Secure and Trusted Communications Networks Reimbursement Program, notes that only 12 percent of telcos have completed the process to remove network equipment deemed insecure, and two-thirds indicated a lack of funding was the main obstacle to completion.

According to the report, there are more than 6,000 sites with equipment deemed "non-secure" across the United States, with most of these in rural areas and some close to vital military assets. (How physical proximity is supposed to make network kit into a greater threat isn't clear.)

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"Congress must pass the Spectrum and National Security Act that funds this program's shortfall, helps get small providers back on their feet and ensures rural communities stay connected," Senator Cantwell stated.

The Spectrum and National Security Act is Cantwell's own work, but includes broader objectives to reinstate the spectrum auction authority of the FCC, and secure broadband funding via this.

Germany agrees terms on restricting Chinese kit in the network

Meanwhile, the German government has agreed with telecoms operators on a compromise proposal to remove Chinese kit from networks in the country.

Under the deal, components manufactured by Huawei will be removed from sensitive core network infrastructure by the end of 2026, rather than a year earlier, as had been previously planned.

Operators will then have until the end of 2029 to remove components made by Huawei or ZTE from other parts of the infrastructure, such as the 5G radio access network (RAN).

Accordion to Reuters, Interior Minister Nancy Faeser told reporters in Berlin: "We have now reached a clear and strict agreement with the telecoms companies," and hailed the agreement as a crucial safeguard for digital security in Europe's largest economy.

We asked the Federal Ministry of the Interior and Community for confirmation.

Telecoms operators in the UK are required to remove Huawei technology from the country's 5G networks by the end of 2027, and should have removed it from their network core by the end of 2023. However, at least one operator failed to meet this deadline. ®

Updated on July 12 to add

A Huawei Germany spokesperson said: "Over the past 20 years, Huawei has developed into a continuously innovative, secure, and reliable telecom equipment supplier in the German market. There is no specific evidence or scenario that Huawei's technology has cyber security risks.

"We will continue to cooperate with customers and partners in a constructive and open manner, promote the improvement and progress of cyber security, and promote the construction of mobile networks and digitalization in Germany.

"We are assessing the relevant implications of the agreement in detail and reserve the right to comment."