U.S. lawmakers have introduced a bill that moves to block equipment or services from Chinese telecoms firms Huawei and ZTE in next-generation 5G networks. In other legislation, they propose to provide about $700 million in grants to help U.S. telecommunications providers offset the cost of removing Huawei equipment from their networks.
The US senators, apparently, are convinced that Huawei equipment will be a threat to national security.
“With so much at stake, our communications infrastructure must be protected from threats posed by foreign governments and companies like Huawei,” Tom Cotton, a Republican senator co-sponsoring the bill, said in a statement.
Mark Warner, the top Democrat on the Senate Intelligence Committee, and Roger Wicker, the Republican chairman of the Senate Commerce Committee, are also backing the bill.
While large U.S. wireless companies have severed ties with Huawei, the burden of cost will fall on small rural carriers. They have, for a long time depended on Huawei and ZTE switches and equipment, because of their low cost.
According to estimates by the Rural Wireless Association, which represents carriers with fewer than 100,000 subscribers, 25 percent of its members have Huawei and ZTE in their networks. Banning the use of these brands would be a financial issue. The users will need about $800 million to $1 billion to replace it.
The US government has been taking an increasingly firm stand on the issue of Chinese networking products. Last August, Trump signed a bill barring the U.S. government itself from using Huawei and ZTE equipment. Post that, the U.S. Commerce Department blacklisted Huawei and 70 affiliates, barring the company from buying parts or components from U.S. companies without U.S. government approval. Subsequently, the trade restrictions were eased, allowing the Chinese firm to buy American-made goods to maintain existing networks and provide a software update to existing Huawei headsets.
Now, these replacement costs may be a real necessity for operators facing this sudden decision.