U.S. carriers to get 39% of what they want for FCC's 'rip and replace'

The FCC on Monday released close to $2 billion to dozens of small US telecom operators. The agency’s goal is to eliminate Huawei and ZTE equipment from US networks.

However, the agency acknowledged the amount being released won’t be enough.

“After review of the submitted applications, the [FCC’s Wireline Competition] Bureau has determined that Priority 1 applicants have submitted approximately $4,640,284,672 in cost estimates that are reasonable and supported,” the agency wrote in a new filing. “Because available funding is substantially less than that amount, the commission rules require that allocations to Priority 1 applicants be prorated on an equal basis. The pro-rata factor applied to those allocations is approximately 39%.”

FCC Chairwoman Jessica Rosenworcel outlined the problem in a letter to Congress late last week. She acknowledged that Congress has already allocated $1.9 billion for the agency’s “rip and replace” program, a figure based on initial FCC estimates.

Counting the cost

But Rosenworcel said the FCC subsequently found out that much, much more is needed. Specifically, she said that more companies asked for money than the FCC initially expected, and that the agency didn’t anticipate the full cost of removing the equipment. Also: “Providers have reported increased costs since the program was funded due to supply chain constraints, inflation, and the need to complete their projects within the … one-year deadline,” Rosenworcel’s letter explained.

Rosenworcel has been hinting that the FCC might need more money to fully finance the removal of equipment from Huawei and ZTE from US networks. But she said the agency completed its final review of the situation just last week, and determined that the full program will require exactly $4.98 billion, or roughly $3.08 billion more than Congress has allocated.

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