Trump signs law to prevent U.S. rural telecom carriers from using Huawei network equipment

By David Shepardson

WASHINGTON (Reuters) – President Donald Trump signed legislation on Thursday to bar telecom carriers from using U.S. subsidies to purchase network equipment from Huawei Technologies [HWT.UL], ZTE Corp <000063.SZ> <000063.SZ> and other companies deemed a national security threat.

The law also requires the Federal Communications Commission (FCC) to establish a program to assist small providers with the costs of removing prohibited equipment or services from their networks and replacing it.

FCC Chairman Ajit Pai called on Congress to “to appropriate the necessary funding to reimburse carriers for replacing any network equipment or services found to be a national security threat.”

Huawei has opposed the measure and disputes that it poses a national security threat.

The Rural Wireless Association praised the measure that authorizes $1 billion but does not appropriate the funds. It marks “the first-step in securing necessary funding to replace rural carriers’ Huawei and ZTE equipment so that critical network infrastructure in rural areas continues to be available,” the association said.

The White House said the “reforms will help protect our nation’s vital communications network and also ensures the United States reaches its 5G potential.”

Steven Barry, who heads the Competitive Carriers Association, said at a congressional hearing this month that rural carriers were “essentially attempting to rebuild the airplane in mid-flight” by having to remove and replace network equipment.

(Reporting by David Shepardson, Editing by Franklin Paul and Tom Brown)