US Plans $700 Million Grant For Telecoms To Replace Huawei Equipment

A bipartisan group of US lawmakers introduced legislation on Wednesday to provide about $700 million in grants to help US telecommunications providers with the cost of removing Huawei equipment from their networks.

The bill also moves to block the use of equipment or services from Chinese telecoms firms Huawei and ZTE in next-generation 5G networks, according to a statement by the senators.

The United States has accused ZTE Corp and Huawei Technologies Co Ltd of working for the Chinese government and has expressed concern their equipment could be used to spy on Americans, allegations the Chinese government and the companies say are baseless.

"With so much at stake, our communications infrastructure must be protected from threats posed by foreign governments and companies like Huawei," Tom Cotton, a Republican senator co-sponsoring the bill, said in a statement.

Mark Warner, the top Democrat on the Senate Intelligence Committee, and Roger Wicker, Democratic chairman of the Senate Commerce Committee, are also backing the bill.

While large US wireless companies have severed ties with Huawei, small rural carriers have leaned on Huawei and ZTE switches and equipment because they are often less expensive.

The Rural Wireless Association, which represents carriers with fewer than 100,000 subscribers, estimates that 25 percent of its members have Huawei and ZTE in their networks, and have said it would cost $800 million to $1 billion to replace it.

The move goes further than steps taken so far by US President Donald Trump's administration, even as it has hardened its stance on Huawei.

Last August, Trump signed a bill barring the US government itself from using Huawei and ZTE equipment.

Then, last week, the US Commerce Department blacklisted Huawei and 70 affiliates, barring the company from buying parts or components from US companies without US government approval.

Five days later, the US government temporarily eased trade restrictions, allowing the Chinese firm to buy American-made goods to maintain existing networks and provide software updates to existing Huawei headsets.