US ‘rip and replace’ program costs soar to $5.6 billion

• US is aiming to rid all comms networks of Huawei and ZTE gear
• Government has pledged to cover the cost of ‘rip and replace’ program
• Now the Secure and Trusted Communications Networks Reimbursement Program has reached a landmark point
• More than 100 operators have made claims and the total is three times higher than the most recent cost estimate

If the US administration wants the country's communications networks to be rid of Chinese-made network infrastructure, the bill is going to be much, much higher than expected, the FCC’s Chairwoman Jessica Rosenworcel (pictured above) revealed in an announcement issued late Friday. 

When the cost of subsidising US network operators to rip out their “insecure equipment and services” (aka Huawei and ZTE systems) and replace it with ‘secure’ technology was first estimated in 2019 the sum was put at $1 billion, then in late 2020 the total was upped to $1.6 billion, then later increased to $1.9 billion under the terms of the second Covid-19 Stimulus Bill. (See FCC’s 'rip and replace' Chinese infrastructure compensation plan finally agreed and published.)

Even then, the US Rural Wireless Association said that higher sum would not be enough, and it would seem that industry body knew its onions.

Because now US operators have submitted their applications to the Secure and Trusted Communications Networks Reimbursement Program, asking for reimbursement of costs reasonably incurred for the removal, replacement and disposal of Huawei and ZTE technology, and the total claimed comes to a staggering $5.6 billion. 

“We’ve received over 181 applications from carriers who have developed plans to remove and replace equipment in their networks that pose a national security threat,” noted Rosenworcel in the FCC announcement, which described the submissions as “robust”. (See Chairwoman Rosenworcel Notifies Congress Of Demand To Participate In The Secure And Trusted Communications Reimbursement Program.)

“While we have more work to do to review these applications, I look forward to working with Congress to ensure that there is enough funding available for this program to advance Congress’s security goals and ensure that the U.S. will continue to lead the way on 5G security,” added the FCC’s Chairwoman.  

We imagine that Rosenworcel will be asked to look extra hard at those applications to see exactly which parts, if any, of the cost estimation process might have been subject to some excitable quotes. 

And there’s certainly a degree of scepticism about the veracity of some of the claims: As one industry analyst, Andrew Schmitt at Cignal AI, noted on Twitter, “Grifters gonna grift.” 

- Ray Le Maistre, Editorial Director, TelecomTV