More Than 40% of Rural US Carriers Fail to Complete Task of Removing Chinese Telecom Equipment Due to Insufficient Funds

TapTechNews July 14th news, the US Federal Communications Commission (FCC) released the latest report stating that due to insufficient funds, more than 40% of rural carriers cannot complete the task of removing Chinese telecommunications equipment such as Huawei and ZTE.

As early as 2021, the FCC unanimously required US rural carriers to dismantle network equipment from Chinese companies such as Huawei and ZTE that are considered to pose a threat to national security. Due to the more attractive mortgage terms and equipment prices offered by Chinese companies, many US rural carriers had previously chosen these devices.

This demolition project named Secure and Trusted Communications Network Reimbursement Program was initially expected to cost 1.9 billion US dollars (TapTechNews note: currently about 13.809 billion Chinese yuan). The US Congress provided funds for rural carriers in need of financial assistance, but the budget has become insufficient due to rising costs. Earlier this year, a bill to increase the appropriation by 3 billion US dollars failed to pass.

The FCC's report pointed out that among the more than 100 carriers participating in the demolition plan, more than 40% need additional funds to complete the task. In contrast, only 19% of US rural carriers said they needed more funds in January this year. The FCC stipulates that it needs to issue progress reports on the plan twice a year.

Although the FCC acknowledges that many rural carriers cannot afford the demolition cost, it still requires them to remove all designated network equipment from companies such as Huawei and ZTE. Currently, more than half of the 126 rural carriers that applied for funds have obtained permission to extend the completion of the task, with the longest extension period being 6 months.

The FCC said: Despite the funding gap, the carriers that receive funding still need to remove all relevant telecommunications equipment and services in their networks.

The report also mentioned some other problems. For example, 32% of rural carriers have encountered difficulties in recruiting workers, which is higher than 16% six months ago. In addition, weather factors have also caused the delay of 15% of the carrier projects, which is higher than 10% before. The FCC also pointed out that some carriers complained that the cost of dismantling equipment was not reimbursed.

Up to now, only 14 of the 126 US rural carriers have completed the final certification, indicating that all relevant equipment in the network has been permanently removed, replaced, and disposed of. For the remaining 112 companies, the US Congress may need to find a way to provide more funds.