The US is moving very, very slowly away from Huawei

So far only 12% of the companies in the FCC's Huawei 'rip and replace' program have finished their work. Meanwhile, the US military is struggling to implement a full ban on connections to Huawei supporters.

Mike Dano, Editorial Director, 5G & Mobile Strategies

July 3, 2024

4 Min Read
A Huawei shop in Beijing with people walking past
(Source: Sipa US/Alamy Stock Photo)

US companies and government entities aren't making much progress in shifting away from Huawei.

For example, only 12% of the companies in the FCC's "rip and replace" program have finished their work on the project. The agency's effort is designed to finance the complete removal of Chinese-made equipment from US networks.

Separately, Bloomberg reported that US military officials are seeking another waiver from a 2019 law that bans the US Department of Defense (DoD) from contracting with anyone who uses Huawei equipment. It has done so every year since the law was passed.

At the same time, Huawei itself has reported significant gains. Its revenues last year were up nearly a tenth, to about $96.9 billion. In its smartphone-making consumer business, sales grew 17%, to roughly $34.6 billion.

"America's assassination attempt on Huawei is backfiring," noted The Economist in a detailed briefing on the topic last month.

Broadly, US officials argue equipment from Chinese suppliers like Huawei poses a security threat. As a result, they've been working to expunge that equipment from US networks and to encourage US allies to employ similar bans. Chinese companies like Huawei and ZTE have long argued that their equipment cannot be used for espionage.

Ripping and replacing

The 2019 Secure and Trusted Communications Networks Act appropriated $1.9 billion for US network operators to remove network equipment from Chinese vendors Huawei and ZTE. However, that's just 40% of what the 126 companies in the program believe they need to finish the job.

Congress has been working to pass legislation that would put another $3 billion into the program, but so far it has failed to pass that legislation.

As a result, a number of companies in the program have asked for waivers in the hopes that Congress will provide additional funding into the program. According to a new report from the FCC, around 40% of "rip and replace" participants believe they won't be able to finish the removal, replacement and disposal process unless additional funding is provided.

But others have been able to complete their work with current funding. The FCC said 14 of the 126 applicants in the program have finished their work. The FCC has so far allocated $693 million in claims in the program.

Some companies don't believe Congress will ever cough up more money for the FCC's "rip and replace" program.

"It appears that federal funding of the remainder of the project is unlikely; therefore, we have devoted significant engineering and administrative resources in search of viable alternative solutions that would allow us to comply with the program," wrote officials from NfinityLink in a new filing with the FCC. "This effort took a substantial amount of engineering and administrative resources to find a solution that leads to compliance without full funding. While a compliance solution has been determined, this solution requires a significant amount of re-engineering of the system and results in a substantial reduction in NfinityLink's overall system capacity."

NfinityLink asked for another three months to complete its "rip and replace" work, noting in part ongoing delays in obtaining replacement Nokia equipment.

The DoD's waiver

According to a new Bloomberg article, the DoD is seeking another formal waiver to its obligations under Section 889 of the 2019 National Defense Authorization Act, which bars government agencies from signing contracts with entities that use Huawei components.

That legislation is intended to push the US and its allies away from Chinese suppliers like Huawei.

But military officials are finding that a difficult proposition. In April, the Pentagon argued it needed a waiver from the Huawei ban to continue "vital resupply missions in the Indo-Pacific, European and African theaters."

After all, some regulators in international countries have not embarked on the Huawei bans that started under the Trump administration and continue under the Biden administration.

Another prong in the US campaign against Huawei was to gum up the vendor's supply chains by preventing US companies from selling components to Huawei.

That effort continues. According to Reuters, Biden administration officials have revoked eight licenses this year that had allowed some companies to ship goods to Huawei.

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Asia

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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