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Author Topic: Huawei to sue FCC from blocking purchases of its networking gear  (Read 6557 times)

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Huawei to sue FCC from blocking purchases of its networking gear
« on: December 02, 2019, 07:36:37 AM »

A week ago today, we told you that the FCC had voted unanimously (by a 5-0 vote) to block purchases of Huawei and ZTE networking equipment by the Universal Service Fund (USF). The fund is managed by the FCC and is funded from fees added to the monthly invoices paid by telecom customers in the U.S. $8.5 billion is spent each year from the fund to make sure that those in rural and low-income areas have access to telecommunication services including the internet. Both Huawei and ZTE are considered national security threats amid fears that their networking gear contain backdoors that sends information about American companies and consumers to the Chinese government. Huawei is the largest supplier of networking equipment in the world with ZTE fourth, but the U.S. does not want any of the 5G networks in the country to contain Huawei or ZTE gear.

The ban does not cover previously built networks, although the FCC is taking public comments on such a rule. The problem is that many carriers providing internet access to rural and low-income areas used Huawei equipment for their 2G, 3G, and 4G networks; if this proposed rule is passed, smaller carriers are going to need financial help from the government to rip out and replace any radios or other gear purchased from Huawei. The FCC is asking the carriers in rural and low-income areas for estimates on how much this would cost them although the agency has already figured out that such a task would require $1.89 billion to be spent over a two-year period.

Why did rural carriers use Huawei equipment when building out their older networks? One reason is that the company's pricing and sales terms are too attractive. In addition, the carriers have high regard for the equipment they purchased from Huawei and the way that the company services its customers.


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