A full replacement of all Huawei and ZTE hardware on American wireless networks will cost $1.837bn

The US Federal Communications Commission (FCC) estimates the cost of a full replacement of all Huawei and ZTE hardware on American wireless networks at $1.837bn.

A report published by the US Federal Communications Commission (FCC) revealed that performing a full replacement of all Huawei and ZTE equipment on American wireless networks will cost $1.837bn in total.

“Based on data Commission staff collected through the information collection, all filers report it could cost an estimated $1.837 billion to remove and replace Huawei and ZTE equipment in their networks.” reads the report published by the FCC. “Of that total, filers that appear to initially qualify for reimbursement under the Secure and Trusted Communications Network Act of 2019 report it could require approximately $1.618 billion to remove and replace such equipment.”

The report aims at promoting the security of our national communications networks by providing information from the US carriers.

The FCC pointed out that around $1.618bn of $1.837bn will be reimbursed by taxpayers according to the Secure and Trusted Communications Networks Act of 2019.

In July the FCC blocked the Chinese companies from receiving subsidies from a government fund, its decision is part of its efforts to protect the national communications networks from security risks posed by the use of Chinese equipment.

The FCC’s move definitively banned U.S. organizations from using the government Universal Service Fund for acquiring equipment or services provided by the Chinese firms.

In November 2019, the U.S. Federal Communications Commission has cut off government funding for equipment from the Chinese companies Huawei and ZTE due to security concerns. The Federal Communications Commission also requested the government to assign subsidies to the American companies that will replace any equipment from the Chinese firms that they already have in place.

The FCC fears that the Chinese firms could conduct cyber espionage for their government due to their “substantial ties to the Chinese government,”

The next step is the approval of the Congress for the $1.6bn fund to use for the reimbursements for the replacement of the Chinese equipment.

“It is a top priority of our nation and this Commission to promote the security of our country’s communications networks. That’s why we sought comprehensive information from U.S. carriers about equipment and services from untrusted vendors that have already been installed in our networks. Today’s announcement marks a critical milestone in our ongoing commitment to secure our networks,” said FCC Chairman Ajit Pai. “By identifying the presence of insecure equipment and services in our networks, we can now work to ensure that these networks—especially those of small and rural carriers—rely on infrastructure from trusted vendors. I once again strongly urge Congress to appropriate funding to reimburse carriers for replacing any equipment or services determined to be a national security threat so that we can protect our networks and the myriad parts of our economy and society that rely upon them.”

The FCC has also published a list of 51 carriers that will need to replace their Huawei and ZTE equipment benefiting from the US funds.

The U.S. has already pushed its allies for banning Huawei, ZTE and other Chinese companies.

The Chinese giant Huawei was already excluded by several countries from building their 5G internet networks. The United States, Australia, New Zealand, Romania, and Japan announced the exclusion of Huawei technology for their 5G internet networks.

In April 2018, the UK GCHQ intelligence agency warned UK telcos firms of the risks of using ZTE equipment and services for their infrastructure.

In December 2018, a Czech cyber-security agency is warned against using Huawei and ZTE technologies because they pose a threat to state security.

Pierluigi Paganini

(SecurityAffairs – hacking, Huawei)