FCC Gets The Huawei Replacement Bill – 3x What They Expected

At the tail end of the Trump administration, Congress passed a bill to get telecom carriers to remove Huawei network equipment from their networks as a national security issue – which it may well be.

Congress allocated a billion plus dollars to help small telecom providers with the costs of doing that.

The FCC thought that it would cost about $1.9 billion even though Congress didn’t allocate that much money.

While the goal was replace the Chinese equipment with American made equipment, the reality is that there are no American companies that make this kind of equipment, so the equipment that replaces the Chinese made stuff will come from Sweden, France and other countries, but not likely from the United States.

The FCC allocated $1.9 billion to fix the problem. Then the bill came in.

Small carriers and schools had from November 2021 to January 2022 to fill out the paperwork to get FCC help.

The bill, at this point, is over $5 billion.

While the FCC has not reviewed or approved those requests, lets say that they pare it down to 3 or 4 billion dollars. It is now up to Congress to address the gap.

It is not clear how the FCC will allocate the money that Congress gave it and what the carriers that don’t get money will do to comply with the law (likely one thing that they will do is sue the government, saying the government told them to do something and the government said they would pay for it and now they won’t).

Some carriers will tell the government to sue them, which could take a decade to resolve with appeals. In the mean time, if Congress really thinks this is a national security problem, it will continue to be a problem all that time.

Likely what will also happen, if carriers have to replace this equipment at their own expense, at least in the short term, is that rollout of new services and new features for these small and rural carriers, will just grind to a halt for years until they can pay off this ‘rip and replace’ bill.

What this translates to is an increase in the digital divide.

One of the other groups that can also get assistance in replacing this equipment is schools. Schools never hard extra money and now, if they have to replace this equipment on their own, it will mean that the poorer school districts will fall farther behind from the richer districts in terms of how they teach. This will mean that the kids in these poor districts will be at an even bigger disadvantage than they were before compared to their richer neighbors when they apply for college or join the workforce.

I think Congress wanted to do the right thing back in 2019, but I don’t think they understood the scope of the problem.

We will see what Congress does. Credit: The Register here and here

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