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The AMERICAN legislators to propose a $1 billion fund to replace Huawei equipment

WASHINGTON (Reuters) – A U.S. House panel unveiled bipartisan legislation this week that would authorize $1 billion for small and rural wireless providers, to replace the network equipment companies such as Huawei Technologies Co Ltd [HWT.UL] and ZTE Corp. the lawmakers say pose a national security risk.

A FILE PHOTO of A Huawei logo is pictured at the Shenzhen International Airport in Shenzhen, Guangdong province, China, on July 22, 2019. (REUTERS photo/Aly Song, File/Photo

The legislation is similar to a bill approved in July by the U.S. Senate Commerce Committee, which would authorize approximately $700 million in grants to remove the Huawei equipment, in an effort to promote the security of the U.S. telecommunications network for the supply chain as a whole.

The top Democrat and Republican on the House Energy and Commerce Committee, said in a joint statement, the bill would require the protection of the nation’s communications networks of foreign adversaries, through the help of small and rural wireless providers, to root out suspect equipment and replacing it with a more secure devices.”

The panel will hold a hearing on the bill on Friday. Huawei did not immediately have a comment.

About a dozen or so rural US telecom service providers that rely on Huawei for network gear, and have been in discussions with its main competitors, Ericsson and Nokia, as a replacement for their Chinese devices, sources familiar with the matter told Reuters in June.

In May, the President when He signed a long awaited executive order declaring a national state of emergency and a blockage of the AMERICAN companies in the use of telecom equipment made by the companies a national security risk. The order directed the Commerce Department, in collaboration with other government agencies, for the preparation of a block plan, in October this year.

The U.S. government on the list of Huawei in May, up from the Chinese company were involved in activities contrary to U.S. national security or foreign policy interests. In August, the us Department of Commerce, with more than 40 tools for Huawei in terms of economic time, raising the total to more than 100 Huawei, entities covered by the restrictions.

The House bill would prohibit the use of federal funds for the purchase of communication equipment, or services of any company that poses a risk to the security of American communications networks. It would also require the Federal Communications Commission (“FCC”), in order to assist small services providers with the costs associated with the removal of the prohibited equipment or services into their networks, and the replacement of the banned devices.

A defense bill approved last year, places a broad prohibition on the use of federal funds for the purchase of any products from Huawei, the White House said in June it would be to meet for a two-year term in order to comply with the ban.

In April 2018, the FCC, by a unanimous vote, to make new rules for the use of the resources of the government’s programme for the purchase of equipment and services from companies that pose a threat to the US communications networks, including the Huawei phone. The proposal is still under consideration.

While large U.S. companies have broken ties with Huawei, and a number of small, rural carriers still depend on a cheap Huawei and ZTE, switches and equipment.

The Rural Wireless Association, which represents carriers with fewer than 100,000 subscribers, estimated that at least 25% of the members of Huawei and ZTE equipment in their networks, and it has been said that it is likely to cost as much as $800 million to $ 1 billion to replace it.

Report by David Shepardson; Editing by Lisa Shumaker and Tom Brown

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