FCC Analyzes Cost of Removing Huawei and ZTE from US Networks

Last Friday, the Federal Communications Commission (FCC) published a public notice releasing the results of a “Supply Chain Security Information Collection” to investigate the costs of removing Huawei Technologies Company and ZTE Corporation equipment from eligible telecommunications carriers’ (ETCs) domestic networks. The Wireline Competition Bureau (WCB) and the Office of Economics and Analytics (OEA) undertook the information collection task at the direction of the FCC’s “Supply Chain Order.”

The 2019 order asked the WCB and the OEA to determine whether telecommunication carriers or their affiliates and subsidiaries own equipment or use services provided by Huawei and ZTE. It also asked the fact finders to gather information about the nature of those provisions and services and the costs associated with purchasing, installing, removing, and replacing them.

The order directed the WCB, “after receiving and evaluating ETC submissions, to consider making this information public.” It asked the WCB to weigh confidentiality and potential security concerns against the “public interest in knowing whether a carrier uses equipment or services from Huawei or ZTE,” the notice explained.

The information collection results showed that removal and replacement of Huawei and ZTE equipment from domestic networks could cost approximately $1.837 billion. ETCs that likely qualify for reimbursement under the Secure and Trusted Communications Networks Act of 2019 (STCNA) could need an estimated $1.618 billion to remove and replace the Chinese companies’ equipment. The public notice included an attachment listing the approximately 50 participant ETCs with existing Huawei and ZTE equipment and services by holding company name.

The WCB and OEA carrying out the supply chain order noted that some eligible telecommunications companies providing “advanced communications” may not have participated, and thus their network infrastructure was not included in the cost estimates. As part of the ongoing proceeding, the sub-organizations will continue to review the data, which will support the FCC’s efforts to implement the STCNA, including the establishment of the Secure and Trusted Communications Reimbursement Program.