It seems that the year won’t be ending well for Huawei and ZTE even though the two’s smartphone businesses remain somewhat stable for now. The Chinese companies’ networking businesses, on the other hand, might be dealt with a rather devastating blow based on the FCC’s latest orders. Removing Huawei’s and ZTE’s networking equipment will hurt rural carriers the most but the FCC promises help will be coming, provided the US Congress finally gets the funds needed to subsidize the costs.
There is no getting around the fact that the US government considers Huawei and ZTE a threat to national security, no matter how much the two companies protest otherwise. All that’s actually left is to lay down the rules that will ban the companies’ products from the US, at least as far as carrier networking equipment is concerned. Those rules (PDF) have now been made in a 5-0 vote by FCC commissioners.
It’s not D-Day for Huawei and ZTE yet, though. The FCC has still to provide a list of communications equipment and services that will be deemed by the government as a threat to national security. These will have to be removed and properly disposed of, the Commission says, which means that carriers will have to replace them to keep their networks running and their businesses in operation.
It has already been established that smaller carriers servicing rural areas will be the ones hit the hardest. The FCC is creating the Secure and Trusted Communications Networks Reimbursement Program to provide funds for these network operators, of course on the condition that they remove the banned products from Huawei and ZTE.
All of these rules, however, still depends on US Congress appropriating the necessary funds. The FCC estimates that its program will require at least $1.6 billion to put the plan into action. Until Congress acts on it, however, carriers, as well as Huawei and ZTE, are left hanging on what will happen next, especially during a transition period in the US’ political landscape.