The Federal Communications Commission will hold a vote whether to ban US carriers from receiving federal subsidies when purchasing equipment from Chinese telecom equipment makers Huawei and ZTE, the Wall Street Journal reported on Monday.
Why it matters: If passed, the move would eliminate Huawei’s and ZTE’s sales to US carriers —primarily rural carriers that source cheaper equipment.
The Rural Wireless Association trade group said that the move could cost its members between $800 million and $1 billion to replace Huawei and ZTE products.
The US federal government subsidizes companies that offer broadband services in rural areas via the $8-billion-a-year Universal Service Fund supported by fees tacked onto individual phone bills.
Details: FCC chairman Ajit Pai proposed the order on Monday which names Huawei and ZTE as national security threats, and creates a process by which to designate other companies which pose a threat.
The proposal would bar US firms from buying equipment from the two Chinese companies using money from the federal fund.