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The US rip-and-replace scheme is a shambles

Years after a passing a law demanding the removal of all Chinese-made kit from US telecoms networks, the resulting scheme is still struggling to get going.

FCC Chairwoman Jessica Rosenworcel wrote to the Senate Committee on Commerce, Science, and Transportation to let them know that the cost of reimbursing those smaller US operators that still have Huawei or ZTE kit in their networks will be $5 billion. That is more than double the amount the US tax payer has originally been asked to shell out for the Secure and Trusted Communications Networks Reimbursement Program.

“Because demand within the first prioritization group exceeds available funds for the Reimbursement Program, the Commission will prorate reimbursement funds equally to each eligible applicant in the first prioritization group. The pro-rata factor for those allocations will be approximately 39.5% of demand,” wrote Rosenworcel.

She seems to be saying that unless a further $3 billion in public cash can be dug up from somewhere, operators will only be reimbursed for two fifths of what it will cost them to do what the law demands. Furthermore the FCC has been aware of the massive gulf between how much money is needed and how much is available for months, but seems to have chosen to focus instead on throwing additional bureaucratic obstacles in the path of the beleaguered operators.

What incentive is there for US operators to rip-and-replace their Chinese kit if they will only be reimbursed for a minority of the cost? If the law compels them to do so regardless then presumably a bunch of them will simply go out of business, which would presumably be bad PR for the scheme. The alternative is to find the extra cash but operators must be fearing that every further month of foot-dragging makes that increasingly unlikely.

None of this prevented Rosenworcel from declaring on the same day that the state-mandated minimum broadband speeds of 25mbps download and 3mbps upload should be dramatically increased. “The needs of internet users long ago surpassed the FCC’s 25/3 speed metric, especially during a global health pandemic that moved so much of life online,” she said.

“The 25/3 metric isn’t just behind the times, it’s a harmful one because it masks the extent to which low-income neighborhoods and rural communities are being left behind and left offline. That’s why we need to raise the standard for minimum broadband speeds now and while also aiming even higher for the future, because we need to set big goals if we want everyone everywhere to have a fair shot at 21st century success.”

Rosenworcel’s short term recommendation is to raise the minimum to 100/20, ramping to 1000/500 at some unspecified time in the future. In addition she wants to mandate other factors such as affordability and equitable access. US CSPs must be loving the extent to which the state is poking its nose into their business these days, especially when coupled with an apparent reluctance to adequately compensate them for the resulting cost.

 

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2 comments

  1. Avatar Andy Tiller 18/07/2022 @ 2:50 pm

    Isn’t the US’s objection to Huawei and ZTE based on the assumed influence that the Chinese government has over these companies?

  2. Avatar TomE 18/07/2022 @ 7:30 pm

    Did we expect anything different from these clowns? Both the current and most recent administrations conjured up unsupported “risks” for purely political purposes to punish foreign firms with superior technology and capabilities. US government should be ashamed.

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