On Thursday the Senate approved $1 billion to help rural telecommunications carriers replace equipment made by Chinese companies Huawei and ZTE Corp. The House passed a similar bill in December, and President Trump is expected to sign it.
Huawei equipment makes up less than 1 percent of equipment used by U.S. telecom providers, but it's much more popular among rural telecoms because it's cheaper. "If signed, the bill will provide funds for about 40 rural carriers that use Huawei gear, which the U.S. says could be used by Beijing to spy on the communications that flow through its networks," Katy Ferek reports for The Wall Street Journal. "Huawei, the world’s largest maker of telecom equipment and the No. 2 smartphone vendor, has disputed those assertions."
As part of the trade war with China, in May 2019 the Federal Communications Commission banned U.S. telecoms from buying or using equipment from "foreign adversaries," effective 90 days from then. That included Huawei, ZTE and similar Chinese companies, Ferek reports. The move left rural telecoms scrambling to figure out their next move. In July, Trump promised to ease up on the Huawei ban as part of trade negotiations with China, and in August extended the deadline for ditching Huawei tech to mid-November. Then in November, the administration granted exceptions to some rural carriers.
Approving funding could help Trump win rural voters in an election year, Ferek writes. However, $1 billion won't likely cover the full cost rural telecoms will pay to replace the equipment, George Paul reports for Business Insider; he notes that FCC Commissioner Geoffrey Starks estimated in November that the real cost could be as much as $2 billion
In the meantime, barring American consumers and companies from doing business with Huawei hasn't hurt the tech giant's fortunes. In addition to the telecoms-equipment ban, the Commerce Department mostly forbade American companies from selling Huawei the computer chips it needs for a certain piece of wireless equipment, but Huawei simply expanded its own chip-manufacturing capability and has been selling the equipment without U.S. chips, Ian King reports for Bloomberg. Tim Danks, the U.S.-based Huawei executive responsible for partner relations, told King that Huawei wants to return to using American components, but that the longer the company goes without access to U.S. suppliers, the less likely it is to return to using American chips.
Huawei equipment makes up less than 1 percent of equipment used by U.S. telecom providers, but it's much more popular among rural telecoms because it's cheaper. "If signed, the bill will provide funds for about 40 rural carriers that use Huawei gear, which the U.S. says could be used by Beijing to spy on the communications that flow through its networks," Katy Ferek reports for The Wall Street Journal. "Huawei, the world’s largest maker of telecom equipment and the No. 2 smartphone vendor, has disputed those assertions."
As part of the trade war with China, in May 2019 the Federal Communications Commission banned U.S. telecoms from buying or using equipment from "foreign adversaries," effective 90 days from then. That included Huawei, ZTE and similar Chinese companies, Ferek reports. The move left rural telecoms scrambling to figure out their next move. In July, Trump promised to ease up on the Huawei ban as part of trade negotiations with China, and in August extended the deadline for ditching Huawei tech to mid-November. Then in November, the administration granted exceptions to some rural carriers.
Approving funding could help Trump win rural voters in an election year, Ferek writes. However, $1 billion won't likely cover the full cost rural telecoms will pay to replace the equipment, George Paul reports for Business Insider; he notes that FCC Commissioner Geoffrey Starks estimated in November that the real cost could be as much as $2 billion
In the meantime, barring American consumers and companies from doing business with Huawei hasn't hurt the tech giant's fortunes. In addition to the telecoms-equipment ban, the Commerce Department mostly forbade American companies from selling Huawei the computer chips it needs for a certain piece of wireless equipment, but Huawei simply expanded its own chip-manufacturing capability and has been selling the equipment without U.S. chips, Ian King reports for Bloomberg. Tim Danks, the U.S.-based Huawei executive responsible for partner relations, told King that Huawei wants to return to using American components, but that the longer the company goes without access to U.S. suppliers, the less likely it is to return to using American chips.
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