FCC Chairman Circulates Plan to Prohibit USF Funding for Chinese Gear, Assess Current Use
Monday, October 28, 2019 | Comments

FCC Chairman Ajit Pai circulated a two-part proposal, which the FCC will vote on at its Nov. 19 meeting, to protect U.S. communications networks from national security threats.

First, a draft report and order would prohibit companies from using money from the FCC’s $8.5 billion Universal Service Fund (USF) to purchase equipment or services from any company that poses a national security threat. The draft report and order would initially designate two Chinese companies — Huawei and ZTE — as companies that pose a national security risk and would establish a process for designating additional covered companies in the future.

Second, a draft further notice of proposed rulemaking and draft information collection order would propose removing and replacing equipment produced by covered companies from USF-funded communications networks. The plan calls for an assessment to find out how much Huawei and ZTE equipment is in these networks and the costs to remove and replace it, along with financial assistance to carriers to help them transition to more trusted suppliers.

Because the rule is prospective, it would not itself prohibit the use of existing equipment or services already deployed or in use. USF recipients could continue to use equipment or services produced or provided by covered companies obtained prior to the issuance of the rule but could not use USF funds to maintain, improve, modify or otherwise support such equipment or services in any way.

To aid the design of a removal and replacement program, the draft information collection order would seek information from eligible telecommunications carriers on their use of equipment from Huawei and ZTE, as well as the potential costs associated with the removal and replacement of such equipment.

A bipartisan group of 18 lawmakers wrote to the FCC regarding their concern about Chinese telecommunications equipment.

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