Impact Of China Blocked, US Must Disburse IDR 80.5 Trillion Funds For Cellular Operators

The FCC asked the US Congress to provide a number of incentives to mobile operators. (photo: doc. unsplash)

JAKARTA - The United States (US) and China have long had a trade war since former US President Donald Trump took office. The various effects continue to emerge until now.

One of them was the Federal Communications Commission (FCC) decision in 2019 to rip off and replace Chinese telecommunications equipment from companies like Huawei and ZTE with equipment from more security vendors.

To that end, the FCC asked the US Congress to provide several incentives to mobile operators, especially on the small business scale in the country to replace their equipment made by China. This is the same piece of equipment that the US Government considers a threat to national security.

By 2021, the FCC estimates these changes to cost nearly $1.8 billion, and they persuaded the US Congress to approve a $1.9 billion budget to fund the entire change.

However, a recent notification via Twitter by FCC chairman Jessica Rosenworcel estimated that the FCC's initial figure of $1.9 billion was still a long way off.

Citing Slashgear, Tuesday, February 8, after receiving more than 181 submissions from affected carriers, most of which are still under review, the FCC has now reached a revised estimate of $5.6 billion for all changes. This is almost triple the initial estimate.

Although the FCC has revised estimates for all of these changes, the US Congress must approve the final figures. The FCC has announced its intention to work with congress, to ensure funding requests are met.

"While we have more work to do reviewing this filing, I look forward to working with Congress to ensure that there is sufficient funding available for this program to advance Congressional security goals and ensure that America will continue to lead in 5G security", said Rosenworcel.

To qualify for FCC-funded reimbursement, affected telecommunications companies must have a customer base of 10 million or less. These companies should also have purchased Huawei or ZTE equipment before June 30, 2020.

Even so, reports say the FCC does not have enough cash to pay for all reimbursement requests, and even if all submissions are not approved, the final amount will almost certainly exceed the initial estimate of $1.9 billion.

For your information, the US Government's crackdown on several Chinese technology companies is part of a larger US-China trade war and has been going on for nearly four years now.

The US government's security concerns are because Chinese companies are legally required to support the Chinese government. In Huawei's case, its founder Ren Zhengfei is a prominent member of China's military, and the company has also received numerous allegations of IP theft.

Its close ties to the Chinese military have also raised concerns that it could be an extension of China's spy apparatus. During Trump's tenure, several Chinese companies were barred from doing business with US companies.

As well as destroying Huawei's consumer business, this decision effectively blocks Huawei (and ZTE) from working with US carriers, most of whom are relatively smaller companies. They choose Huawei and ZTE equipment simply because they are cheaper.