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Senate Bill Would Put $1 Billion-Plus Toward Secure 5G Supply Chain

Some high-profile senators are proposing legislation to put over $1 billion toward funding alternatives to the 5G technology from Chinese telecoms Huawei and ZTE that the U.S. is looking to scrub from its networks due to national security concerns. 

Related: Kratsios Says U.S., Allies, Must Confront Chinese Tech 

A bipartisan group of senators overseeing national security issues have introduced the Utilizing Strategic Allied (USA) Telecommunications Act. 

The bill would require the FCC to put 5% of the proceeds from any competitive spectrum auctions over a five-year period (or $750,000,000, whichever is greater) into a Public Wireless Supply Chain Innovation Fund, plus another $500 million in Multilateral Telecommunications Security Fund.

Related: Trump Administration Allows U.S. Tech Supplies to Huawei 

The National Telecommunications & Information Administration would be authorized to draw from the Supply Chain Fund fund to promote the development of interoperable 5G technology from trusted suppliers and open standards-based equipment. 

The Secretary of State could draw from the Security Fund, which would go toward working with "foreign partners" to accelerate the adoption of trusted and secure equipment globally. 

The bill would also: 

1. "Create a transition plan for the purchase of new equipment by carriers that will be forward-compatible with forthcoming O-RAN equipment so small and rural carriers are not left behind; 

2. "Increase U.S. leadership in International Standards Setting Bodies (ISSBs) by encouraging greater U.S. participation in global and regional telecommunications standards forums and requiring the FCC write a report to Congress with specific recommendations; 

3. "Expand market opportunities for suppliers and promote economies of scale for equipment and devices by encouraging the FCC to harmonize new commercial spectrum allocations with partners where possible, thus promoting greater alignment with allies and driving down the cost of Huawei alternatives." 

The senators see the bill as crucial to preventing China from winning the race to 5G with technology that could compromise the security of the U.S. and its allies. 

"Heavily subsidized by the Chinese government, Huawei is poised to become the leading commercial provider of 5G, with far-reaching effects for U.S. economic and national security," the senators said in introducing the bill. "With close ties to the Communist Party of China, Chinese state-directed technology companies present unacceptable risks to our national security and to the integrity of information networks globally. However, U.S. efforts to convince foreign partners to ban Huawei from their networks have stalled amid concerns about a lack of viable, affordable alternatives." 

“When it comes to 5G technology, the decisions we make today will be felt for decades to come," said Sen. Richard Burr (R-N.C.), chairman of the Intelligence Committee. "The widespread adoption of 5G has the potential to transform the way we do business, but also carries significant national security risks. Those risks could prove disastrous if Huawei, a company that operates at the behest of the Chinese government, military, and intelligence services, is allowed to take over the 5G market unchecked. This legislation will help maintain America’s competitive advantage and protect our national security by encouraging Western competitors to develop innovative, affordable, and secure 5G alternatives." 

"It is imperative that Congress address the complex security and competitiveness challenges that Chinese-directed telecommunication companies pose,” said Sen. Mark R. Warner (D-Va.), who co-founded wireless company Nextel and is vice chairman of the Intelligence Committee. “We need to move beyond observing the problem to providing alternatives for U.S. and foreign network operators.” 

Also backing the bill are Sens. Marco Rubio (R-Fla.), a member of the committee; Bob Menendez (D-N.J.), ranking member of the Foreign Relations Committee; Michael Bennet (D-Colo.), and John Cornyn (R-Tex.), both members of the Intelligence Committee. 

The FCC has already voted to exclude broadband subsidy funds to any network buildouts using nontrusted suppliers, the first of those identified as ZTE and Huawei, though it has sought comment on that designation before making it official. It is also considering whether to extend that ban beyond those subsidy funds, and how to fund a rip-and-replace of subsidy-funded networks already using those "untrusted" suppliers.