The U.S. telecoms regulator FCC needs an additional $3 billion to fund the removal of equipment made by Chinese telecoms giants Huawei and ZTE in U.S. networks, bringing the total cost to $4.9 billion, the agency told Congress on Friday.
“To fund all reasonable and supported cost estimates, the Reimbursement Program will require $4.98 billion, reflecting a current shortfall of $3.08 billion,” Jessica Rosenworcel, chairwoman of the Federal Communications Commission, said on Friday in a letter to Senator Maria Cantwell, who heads the Committee on Commerce, Science, and Transportation.
Since Congress only appropriated $1.9 billion to fund the removal process, companies would be reimbursed for only about 40 percent of the costs, Jessica Rosenworcel said in her letter.
In 2019, Congress passed a law tasking the FCC with compelling U.S. telecoms carriers that receive federal subsidies to purge their networks of telecoms equipment that poses a national security risk, with promises of reimbursement.
The FCC designated Huawei and ZTE as threats, compelling U.S. companies to remove their gear or be frozen out of an $8.3 billion government fund to purchase new equipment. However, to fund the so-called “rip and replace” effort, Congress only appropriated $1.9 billion, raising questions about how effectively the removal program would be implemented.
“Absent an additional appropriation, the Commission will apply the prioritization scheme Congress specified,” Jessica Rosenworcel said in the letter. The Commission would begin processing reimbursement claims as allocations are issued in the coming days.
Companies are not required to complete the work until after they receive reimbursement.