The U.S. government has fully funded the so-called “rip-and-replace” program, which is designed to provide funding to domestic operators as they work to eliminate equipment from China-based vendors from U.S. telecommunication networks. It’s also one of many communication-focused funding projects available to telecom operators.

The latest funding tranche was initiated late last year when the “Spectrum and Secure Technology and Innovation Act” was passed. That act authorized the Federal Communications Commission (FCC) to borrow up to $3.08 billion to help fund the “Secure and Trusted Communications Networks Act,” which was passed in 2019.

The FCC recently borrowed that full amount and has made it available to telecom operators participating in the Secure Network Act reimbursement program.

“The rip-and-replace program supports the critical work of removing insecure equipment and services from our nation’s networks,” the FCC explained in its notice. “With this further allocation, recipients should be able to move swiftly to fulfill their removal, replacement, and disposal work under the Secure Networks Act and Program rules.”

The funding move fills a long-standing pain and talking point from rural operators and their trade organizations.

Tim Donovan, CEO for telecom industry trade group CCA, highlighted the passing of the funding bill during a keynote address at this week’s CCA Mobile Carriers Show in Denver. That sentiment was echoed by Telecommunications Industry Association CEO David Stehlin.

“Fully funding this critical investment ensures that participating providers – many of them serving our most rural and underserved communities – can be duly compensated and are able to now move forward with removing and replacing untrusted network equipment without compromising network reliability or financial viability,” Stehlin wrote in a statement.

Long road toward 'rip-and-replace' completion The Secure Network Act stemmed from an executive order signed by President Donald Trump during his first term. It invoked national emergency powers to “deal with the threat posed” by IT and communications technology or services owned or otherwise controlled by foreign adversaries, with a specific focus on China-based vendors like Huawei and ZTE.

The act eventually led to an initial $1.9 billion in funding to support a reimbursement program. Those funds were tied to replacing what were found to be at least 24,000 pieces of Huawei or ZTE equipment installed in U.S. telecom networks. Those findings boosted initial estimates of around $700 million to replace that equipment to more than $5.6 billion.

The FCC had been working toward bridging that funding gap, which had been falling onto operators.

Broadband connectivity provider Windstream noted at one point it tapped into the program to rip out all of the Huawei equipment across its network, which it replaced with new gear from Cisco and Infinera. Windstream requested $41.4 million from the FCC program and had been allocated $46.8 million for reimbursement, however target=_blank>CTO Art Nichols explained to SDxCentral that Windstream “has only received a portion of reimbursement funds so far but is in the process of applying for and receiving further reimbursement.”

Nicols added at that time that the company did not expect to draw down the full amount of the allocated funds, but that all of the costs associated with the move would be “fully covered by the FCC’s initial allocation.”

“Because the company began the removal and replacement process early, it found that vendors and equipment were available and cost effective,” Nichols explained. “Windstream relied on FCC cost estimates in submitting its initial SCRP [Secure and Trusted Communications Networks Reimbursement Program] application, which were typically higher than the costs that Windstream experienced in practice.”

Robin Olds, senior sales business development manager for service providers in the Americas at Cisco, told SDxCentral in an interview late last year that the shortfall was beginning to weigh on operators and vendors.

“They didn’t anticipate how many people have Huawei that actually applied for it,” Olds said, noting that the initial $1.9 billion in funds has had to be “spread like peanut butter. The service providers I talked to said they got 25% of what they asked for.”

Open RAN, BEAD, and 5G The funding shortfall was also highlighted as part of a House Committee meeting early last year focused on how the U.S. government should support open radio access network (RAN) technology development and deployment. Committee members from both sides of the aisle and those testifying at the meeting repeatedly mentioned Huawei, ZTE and the Chinese Communist Party (CPP) as reasons for funding open RAN development and equipment replacement efforts.

“Rip-and-replace is only funded to 40% of the money,” John Baker, who at that time was senior VP of ecosystem business development at Mavenir, testified. “People like Mavenir that have participated in that … we’re still outstanding in the completion of that activity to get the Chinese equipment out of our networks. There’s still Chinese equipment in the networks waiting for this funding to take place.”

Diane Rinaldo, executive director of the Open RAN Policy Coalition, stated that the Chinese government continued to back vendors like Huawei and ZTE and is using government initiatives to deploy equipment into developing countries. That backing in some cases outweighs the potential benefits of open RAN.

“The CCP [Chinese Communist Party] and their national champions are competing with the full financial backing of China in the strategic intent of vendor lock-in,” Rinaldo said. “Open RAN reduces costs of hardware and software and creates the possibility to break vendor lock-in. These heavy foreign investments tip the scales more than the cost savings that open RAN produces.”

Domestic telecom operators are also working through various other government funding programs to expand the reach of telecom services, including the $42.5 billion “Broadband Equity, Access and Deployment” (BEAD) program, which is targeted at expanding the reach of high-speed broadband services, and the “5G Fund for Rural America” to support the construction of 5G networks in rural areas.