Attempts to remove Huawei and ZTE equipment from U.S. telecommunication networks continues to hit a funding wall preventing telecom operators from completing the required “rip-and-replace” work across their networks.

Federal Communications Commission (FCC) Chairwoman Jessica Rosenworcel this week sent a letter to Congress explaining that a lack of funding for a government reimbursement program designed to help operators comply with the federally mandated Secure and Trusted Communications Networks Act is preventing those removal efforts. That program has so far been allocated $1.9 billion of the nearly $5 billion expected to be needed to help with reimbursement costs.

Rosenworcel said that this shortfall fosters “risks to national security, network reliability and small businesses should the program funding fall short of achieve its goals.” She stated that nearly 40% of program participants said they need government funding to finish the removal and replacement work.

“Several recipients have informed the commission that the funding shortfall could result in the shutdown of their networks or a need to withdraw from the program,” the FCC wrote in a statement. “Because program recipients serve many rural and remote areas of the country where they may be the only mobile broadband service provider, a shutdown of all or part of their networks could eliminate the only provider in some regions.”

The government agency reported that the program has received more than 20,000 reimbursement claims across 122 of the 126 applications approved for funding. It has granted 64 time extensions to operators to complete the work, “including 52 based in whole or in part on the funding shortfall.”

Broadband connectivity provider Windstream last year noted 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. However, Windstream CTO Art Nichols explained to SDxCentral that the company had only “received a portion of reimbursement funds so far but is in the process of applying for and receiving further reimbursement.”

“The inability of program participants to fully remove, replace and dispose of its covered equipment and services would also raise national security concerns by leaving insecure equipment and services in U.S. networks,” the FCC added. “It could also raise network compatibility issues associated with piecemeal replacement of covered equipment as well vendors that may shift their work to carriers that are not participating in this program.”

The government program is designed to help telecom operators replace legacy equipment from China-based vendors like Huawei and ZTE due to security concerns. Most of this equipment was installed a decade ago as part of 4G LTE deployments and before security agencies began questioning the potential security risk of equipment from vendors like Huawei and ZTE.

An FCC report from 2022 estimated there were at least 24,000 pieces of Huawei or ZTE equipment spanning about 8,400 locations in U.S. telecommunication networks. The U.S. government has been attempting to fund these efforts through its rip-and-replace program, which is officially known as the Secure and Trusted Communications Networks Reimbursement Program and emerged from the Secure Equipment Act of 2021.

The funding shortfall was highlighted earlier this year as part of a House Committee meeting 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, SVP 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 continues 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.”

Huawei, which is one of the world’s largest telecom equipment vendors, has repeatedly denied security concerns and has linked the ongoing U.S. government efforts to political posturing.

“When you’ve got people disagreeing, when you’ve got a toxic political environment, it makes it really challenging,” Andy Purdy, chief security officer for Huawei, told SDxCentral in an interview last year.