US spectrum auction will fund purge of Huawei, ZTE, other Chinese telecom gear

The US Federal Communications ⁠Commission ⁠said an auction of wireless mid-band spectrum raised more than US$3.5 billion ($5 billion), which will largely be used to fund the replacement of ‌Chinese telecom equipment.

The FCC said up ‌to US$3.3 ‌billion of the auction’s proceeds ‌will be used to cover funds ⁠borrowed to support the FCC’s "Rip and Replace” program to purge Huawei, ZTE or other Chinese gear from their wireless networks and other ​programs.

The agency previously estimated removing the Chinese equipment would cost US$4.98 billion, but Congress only ⁠approved US$1.9 billion before deciding to hold the auction.

The FCC said last week that 42 percent of federal funding recipients have completed replacement and disposal of all Chinese equipment, citing delays due to permitting, supply chain issues, labor shortages and severe weather.

Congress approved the funding and authorized the one-time ​spectrum auction by the FCC ⁠for advanced 5G-grade wireless spectrum ⁠in the band known as AWS-3 to help meet rising spectrum demands ​of wireless consumers.

In 2014, the FCC auctioned ‌AWS-3 spectrum ⁠licenses for commercial use, but some winning bidders defaulted on their payment obligations and about 200 licenses were returned to ‌the FCC's inventory.

Washington has aggressively urged US allies to purge Huawei and other Chinese gear from their wireless networks.

In 2019, Congress told the ​FCC to require US telecoms carriers that receive federal subsidies to purge their networks of Chinese telecoms equipment.

The FCC last ‌auctioned spectrum ⁠in 2022. In 2023 ​it lost the broad authority from Congress for wireless sales.