US ban on Chinese telecom gear costly

A shortfall in funding for the US government's plan to replace Chinese telecom equipment once again highlights that any attempts to promote technological decoupling would harm the interests of the United States as well, experts said.

They were commenting on media reports that the US Federal Communications Commission said removing Chinese telecom equipment from existing telecom networks would cost $5.3 billion, much higher than what the US Congress had set aside.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association in China, said inadequate financing is likely to pose connectivity challenges to people in remote areas in the US.

Products from Huawei Technologies Co and ZTE Corp are used by US telecom carriers to offer network and broadband services in some of the most remote regions in the US, Xiang said.

According to Xiang, the US government is wasting big money on replacing Chinese telecom equipment, and consumers in these areas will suffer from the lack of quality telecom services.

The FCC has already banned US telecom carriers from using Huawei and ZTE's telecom equipment via federal subsidies, citing what it alleged were national security concerns. The two Chinese companies have repeatedly denied the accusations, which they said are groundless.

In December 2020, the FCC announced rules requiring carriers that use ZTE or Huawei equipment to "rip and replace" that equipment. The plan is challenging for rural carriers which do not have enough budget to find workers to remove and replace such equipment.

Huawei said last year the "FCC initiative only creates extraordinary challenges for carriers in the most remote areas of the US to maintain the same high level and quality of service they provide to their customers without disruption".

Steve Berry, president and CEO of the Competitive Carriers Association, a trade group for about 100 wireless providers in the US, issued a statement earlier this year calling on the US government to ensure the FCC program is fully funded so that connectivity is maintained during the operators' transition to new equipment for their networks.

Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation, said any attempts to promote technological decoupling would harm US interests as well, as shown by numerous instances in the past.