Lawmakers Propose $1 Billion Purge of Chinese Telecom Equipment

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The Secure and Trusted Communications Networks Act would help small and rural providers pay to replace equipment from Huawei, ZTE and other foreign vendors with safer alternatives.

A bipartisan group of lawmakers wants to devote $1 billion to purging the country’s telecom infrastructure of equipment manufactured by Huawei and other foreign companies that the government identifies as national security threats.

The funds, which would be provided under the newly proposed Secure and Trusted Communications Networks Act, would help small and rural providers replace compromised telecom equipment with safer alternatives. Under the bill, the Federal Communications Commission would be responsible for distributing the money and ensuring recipients comply with the law. 

The FCC would also be responsible for maintaining a list of foreign manufacturers and service providers that U.S. companies must eradicate from their infrastructure. The bill explicitly prohibits equipment produced by Huawei and ZTE, as well as any other company that “poses an unacceptable risk to the national security of the United States.”

The legislation, introduced last week by Reps. Frank Pallone Jr., D-N.J., Greg Walden, R-Ore., Doris Matsui, D-Calif., and Brett Guthrie, R-Ky., would ban organizations from using federal funds to buy equipment from prohibited vendors. 

The bill comes as government officials look to cleanse the American telecom market of Chinese companies, which intelligence officials have warned could act as conduits for government espionage. 

In 2018, Congress banned federal agencies from doing business with five Chinese firms, including Huawei and ZTE, and in May the Trump administration signed an executive order prohibiting U.S. companies from buying products from any group deemed a national security threat. The Commerce Department has also issued measures banning American firms from doing business with more than 100 Huawei-affiliated groups, but officials gave industry extra time to cut ties with the firm.

“Much of the global supply chain for telecommunications equipment flows through China at one point or another,” Pallone, who chairs the House Energy and Commerce Committee, said Friday during a hearing on telecom security. “Communications networks are interconnected, and that means that one weak link can harm the whole system. We must help smaller carriers remove suspect equipment for the good of the entire country.”

Huawei, ZTE and other Chinese firms have been able to gain a significant foothold in the global telecom market by offering customers hefty discounts on their equipment. In recent months, security experts have suggested that government subsidies could incentivize telecom companies in the U.S. and abroad to pass on Chinese equipment in favor of safer tech.

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