FCC eyes quick spectrum auction to pay for rip-and-replace

Issuing a notice of proposed rulemaking, chairwoman Jessica Rosenworcel urged her colleagues at the agency to "quickly adopt rules that will allow the FCC to proceed with a spectrum auction to fully fund the removal, replacement and disposal of insecure Chinese-made Huawei and ZTE equipment and services from US networks without further delay."

After some persistent lobbying from Rosenworcel, the US government in December finally agreed to include a provision in its mahoosive $895 billion defence budget that covers funding for the Secure and Trusted Communications Networks Reimbursement programme.

Commonly known as rip and replace, it compensates telcos that have to swap Chinese kit out of their networks – it also has a $3.08 billion shortfall in its budget.

Rather than actually hand over the money that Rosenworcel was asking for, the government instead gave the FCC permission to raise the cash by selling off some spectrum, something it has been unable to do since its auction authority lapsed in March 2023.

With these powers available to it once more, the FCC plans to auction some remaining AWS-3 spectrum that wasn't included in an earlier auction that wrapped up almost 10 years ago. These frequencies are in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands.

"In 2014, the Commission previously assigned the majority of AWS-3 licenses in Auction 97. Nevertheless, there remains spectrum in these bands that is not currently licensed due to various circumstances. Pursuant to the Congressional mandate, the Commission will now offer licences for the unassigned AWS-3 spectrum in a new auction," the FCC said.

The desire to crack on with rip-and-replace is even stronger now in the wake of the damaging Salt Typhoon cyber attack. The Chinese hacker group is understood to have breached the networks of at least eight telcos, none of which had fully removed Chinese equipment from their networks.

"With 'Salt Typhoon' and other recent incidents, we are all acutely aware of the risk posed by Chinese hackers and intelligence services to our privacy, economy, and security," Rosenworcel said. "Today's proposal is a critical step toward finally filling the shortfall in the rip and replace programme. I am confident that the FCC's world-leading and award-winning auction team will meet this important moment."

Salt Typhoon didn't do US-China relations any favours, and the tension has subsequently been ramped up further, after the US Department of Defence (DoD) added some new names to its naughty list.

Internet giant Tencent and battery maker CATL are among a fresh batch of entities designated as operating in the US while simultaneously providing goods and services to the Chinese military.

According to experts cited by Reuters, while this designation doesn't come with direct consequences, it can inform the opinion of other US government departments that can take action, the most severe of which is a US investment ban.

Both Tencent and CATL have said they will fight the designation, but whatever the eventual outcome, it is highly unlikely to repair Washington's strained relationship with Beijing.