The U.S. government declared that was too much of a risk. Starting in 2019, the U.S. effectively ordered all companies with Huawei and ZTE gear to replace all of it. The government promised taxpayer money to help pay for comparable equipment from U.S. or European companies.
The Federal Communications Commission once estimated the cost of replacing Chinese gear to be about $2 billion. An updated estimate disclosed last month showed it was about $5 billion. It will take time for the F.C.C. and Congress to figure out how to pay the amounts small telecom companies say they need. In the meantime, many such providers haven’t even started replacing Huawei and ZTE equipment, as Politico reported last month.
There is plenty of finger-pointing over how this happened. Congress imposed a mandate on small companies, and then didn’t follow through with the money. U.S. officials waffled on which types of Huawei and ZTE equipment should be replaced. The delay and muddled official messages slowed down the process.
Naomi Wilson, an Asia policy specialist at ITI, a trade group of U.S. tech and telecommunications companies, told me that the first estimates for replacing the equipment were best guesses that proved far too low. Inflation, supply-chain problems and a trade war between the U.S. and China increased the price.
One big question is whether this drama could have been avoided. I asked Paul Triolo, senior vice president for China at Albright Stonebridge Group, a strategy firm, if the U.S. had a good plan with wobbly execution or if the strategy was misguided to begin with. He said it was a little of both.
Triolo said that the U.S. government could have phased out Huawei and ZTE equipment over many years — similar to Britain’s approach — and fast-tracked removal of some types of Chinese gear or equipment near sensitive locations such as near military facilities. While the U.S. said that it needed to remove the risk of the equipment quickly, all that stuff remains in place anyway, he said.