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Huawei and ZTE Tech Extraction from U.S. Networks Will Cost $1.8B, FCC Says

(Image credit: Huawei)

The price for extracting from U.S. networks equipment and software from Chinese vendors deemed security threats by the Trump Administration will come in at around $1.8 billion, according to figures released Friday by the FCC. 

The agency also said that most of that money, $1.6 billion of it, could be eligible for reimbursement to U.S. network operators from the federal government. 

In June, the FCC deemed technology provided by Chinese vendors Huawei and ZTE to be security threats. The agency blocked access to the Universal Service Fund to any U.S. network operator that didn’t comply with the edict to remove Huawei and ZTE tech from their networks and not to buy any more of it again. 

The mandate burdened network operators with the task of replacing relatively inexpensive technology from the Chinese vendors with gear and software from pricier vendors—essentially buying the same tech twice, and paying substantially more the second time around. 

In March, however, the Trump Administration signed into law the Secure and Trusted Communications Act, which underwrote much of the replacement costs with tax dollars. 

Notably, The Verge quoted the CEO of a small Oregon carrier in June who said it would cost $1.5 million to replace Huawei equipment his company originally paid $500,000 for. The company also said it might not be able to come up with the cash to make the switch before receiving the government reimbursement.