Senate Bill Would Finance Huawei 5G Alternatives

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A bipartisan group of senators introduced legislation Tuesday that would pump more than $1 billion into developing Western 5G equipment alternatives to China’s Huawei. Saying that Huawei has been “heavily subsidized by the Chinese government,” the Utilizing Strategic Allied (USA) Telecommunications Act would help Western firms compete and become a strong player in 5G technology, according to sponsors.

The U.S. has long held national security concerns and suspicions about Huawei’s ties to China’s Communist Party leadership. Last year, the U.S. placed the company on a blacklist prohibiting American firms from doing business with Huawei without a special license.

The bill proposes the FCC direct at least $750 million or up to five percent of annual auction proceeds from new auctioned spectrum licenses to create an open-architecture model research and development fund. The fund would be managed by the National Telecommunications and Information Administration with input from other agencies, reports CNBC.  

Another $500 million would become a Multilateral Telecommunications Security Fund, which would be available for 10 years “to accelerate the adoption of trusted and secure equipment globally and to encourage multilateral participation,” according to the bill text. 

The nest egg would be created in conjunction with foreign partners and require reports to Congress on how the money is being used, notes CNBC. The bill would also encourage the U.S. to further its leadership in international standard setting bodies to help set guidelines on telecommunications and work to make Huawei alternatives more affordable.

“Every month that the U.S. does nothing, Huawei stands poised to become the cheapest, fastest, most ubiquitous global provider of 5G, while U.S. and Western companies and workers lose out on market share and jobs,” said Sen. Mark Warner, (D-VA), a co-sponsor of the bill. Warner, the vice chairman of the Senate Select Committee on Intelligence, co-founded Nextel before serving in government.

Chairman of the Senate Intelligence Committee Richard Burr, (R-NC), is a co-sponsor of the bill, alongside Republican Senators Marco Rubio of Florida and John Cornyn of Texas. Democratic Senators Bob Menendez of New Jersey and Michael Bennet of Colorado are also co-sponsors alongside Warner.

“The widespread adoption of 5G has the potential to transform the way we do business, but also carries significant national security risks,” Burr said. “Those risks could prove disastrous if Huawei, a company that operates at the behest of the Chinese government, military, and intelligence services, is allowed to take over the 5G market unchecked.”

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