Wednesday 25 September 2019 5:30 pm

US proposes $1bn fund to replace Huawei network equipment

US politicians have outlined plans for a $1bn (£805m) fund that would allow small telecoms firms to replace network equipment made by controversial Chinese tech giant Huawei.

The proposed bipartisan legislation comes after a bill approved by the US Senate Commerce Committee in July that would allow roughly $700m in grants to remove Huawei equipment.

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President Donald Trump’s administration has led a campaign against the Chinese firm over concerns its technology could be used for spying by authorities in Beijing.

In a statement the House Energy and Commerce Committee said the bill would protect the “nation’s communications networks from foreign adversaries by helping small and rural wireless providers root-out suspect network equipment and replace it with more secure equipment”.

The fund will also apply to equipment made by Chinese telecoms firm ZTE, which has previously been added to a US blacklist.

The committee is set to hold a hearing on the bill on Friday. Huawei has been contacted for comment.

While major US telecoms firms have cut ties with Huawei, many smaller companies serving rural areas still use its equipment.

The Rural Wireless Association, which represents carriers with fewer than 100,000 subscribers, has estimated that 25 per cent of its members have Huawei and ZTE equipment in their networks.

Roughly a dozen rural telecoms providers in the US are in discussions with Ericsson and Nokia to replace their Chinese equipment, sources told Reuters.

The US has added Huawei to a trade blacklist, effectively banning American companies from doing business with the embattled Chinese firm.

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In August, Trump’s administration extended a temporary reprieve on the ban for a further 90 days, but added an additional 40 Huawei subsidiaries to its blacklist.

Huawei has always denied allegations of espionage, and has accused the US of launching a politically-motivated attack amid rising trade tensions between the two superpowers.

Main image credit: Getty