WASHINGTON, January 11, 2024 – A group of nine wireless and wireline trade groups on Thursday urged Congress to allocate an additional $3.08 billion in funding for providers to comply with a 2020 law, mandating the replacement of some foreign-manufactured equipment in U.S. communications networks.

In a jointly-written letter, spearheaded by the Competitive Carriers Association, groups argue the reimbursement program designed to fund equipment replacement efforts is significantly underfunded, and say without full financial support many providers could be stranded mid-effort.

The Federal Communications Commission, responsible for overseeing the program, granted approval for $4.98 billion in applications seeking funding from the Secure and Trusted Communications Networks Reimbursement Program in July 2022, but was compelled to prorate funds, providing 39.5 percent of reasonable costs upfront.

However, this approval revealed a significant overcommitment from the $1.9 billion appropriation for the program assigned by the Consolidated Appropriations Act of 2020.

With deadlines for providers to remove all Huawei and ZTE communications equipment from their networks ranging from October 8, 2023 to September 23, 2024 – the associations implore Congress to promptly allocate full funding.

An FCC bureau granted several six-month extensions to eligible communications providers in October 2023, due to what the FCC recognizes as a lack of funding slowing the removal, replacement, and disposal processes.  

In an October letter addressed to Rep. Frank Pallone, ranking member of the House Energy & Commerce Committee in October, FCC Chairwoman Jessica Rosenworcel emphasized that “the grant of these extensions does not lessen the urgency for a fully funded reimbursement program.”

The trade organizations argue that following the guidance of Congress and the FCC, carriers initiated the “rip and replace” procedure to eliminate such equipment, with the expectation of full reimbursement.

In a report to Congress last Friday, the Federal Communications Commission says just a handful of telecommunications companies has finished removing tech equipment supplied by companies considered to have close ties to China’s Communist government.

WASHINGTON, August 24, 2023 – China’s ability to remain competitive in the global artificial intelligence race will depend on its ability to produce its own chips, as U.S. restrictions on the export of that product to the adversarial nation will hobble its ability to move forward, experts said Thursday.

“U.S. chip export sanctions are a huge roadblock” for AI development in China, said Qiheng Chen, a senior analyst at consulting firm Compass Lexecon.

The ability to manufacture advanced chips domestically will be essential for the country to continue researching and implementing AI, Chen added at the AI event hosted by the Asia Society Policy Institute.

The Commerce Department imposed in October 2022 restrictions on exports of advanced semiconductors and chip manufacturing equipment to China and required U.S. citizens to get a permit before working with Chinese chip manufacturers.

The move was designed to limit China’s ability to compete with the U.S. by curbing its access to hardware required for cutting-edge military technology. It also makes AI research and development, a highly chip-dependent process, more difficult.

Other panelists Tuesday emphasized chip making as a top priority of the Chinese government.

The country has already moved toward independence from the U.S. in other areas, like satellites and fiber optics, as a response to Trump administration policies.

This has continued under President Joe Biden, with a 2021 executive order restricting investment in Chinese firms drawing criticism from Huawei, the Chinese telecom company.

Experts have previously said the threat of restricting access to global trade even further could make China hesitant to retaliate for the sanctions. This is because advanced chip manufacturing requires materials, components, and processes that would be difficult for a single nation to source entirely within its borders.

“It’s too complex, too global, too interdependent for one country to be able to produce all these technologies on their own,” said Jimmy Goodrich, vice president of Global Policy at the Semiconductor Industry Association, at a conference earlier this year.

A Huawei spokesperson estimated at a conference following the investment ban that it would take three to five years for Chinese chip manufacturing to become self-sufficient and rely less on American components and investments.

Biden signed the CHIPS and Science Act into law last year, two months before the export restrictions went into effect. It allocates $52 billion for American semiconductor manufacturing and gives tax credits for investments in the industry.

WASHINGTON, August 2, 2023 – The United States needs to collaborate with its allies to ensure semiconductor supply chain resilience, said a former National Security Advisor.

Robert O’Brien, chairman of strategic advisory firm American Global Strategies, said at a Hudson Institute event Tuesday that the semiconductor industry — the chips that run all electronic devices — is a primary industry of concern for competition with China.

O’Brien urged the government to cooperate with allies to onshore, moving plants onto domestic land, and “friend-shore,” moving plants into allying countries, manufacturing plants. Failing to do so will subject the U.S. and its allies to additional risks in the future, he said. 

The United States’ advantage is that it has “real allies” that share its beliefs and values, particularly for liberty and a free market, said O’Brien. In contrast, China has very few allies that share its values and are not paid for their loyalty, he said. He urged the U.S. to capitalize on its strengths. 

There are many countries, including Philippines, Thailand, India, and Mexico that have manufacturing capability that can support American demand in place of China, he said. 

Beijing is not interested in being an economic partner, O’Brien warned. In 2020, the country had over 22,000 companies in the semiconductor industry. The sector only continues to grow as China’s policies provide incentives for companies to produce at scale.  

Appeasement and negotiation are not options when dealing with China, said O’Brien. China does not play by the same rules as western states, it generates wealth by stealing the intellectual property of American companies. There is no way to compete with China if we continue to allow theft to happen, he said. 

Ultimately, the competition between the countries is not a squabble over ideals, but instead a fight between liberty and the “worst form” of totalitarianism, claimed O’Brien. For this reason, he suggested that the Biden Administration take measures to limit American private investment in the Chinese government. 

President Joe Biden’s Investing in America initiative is investing billions of dollars into the United States’ domestic manufacturing. Congress passed the Inflation Reduction Act and CHIPS and Science Act in 2021 which invest in America’s electric vehicle and green energy plans and semiconductor manufacturing. 

Biden ran his presidential election campaign on his initiative to move companies onshore, defend American supply chains, and create more jobs. According to the White House, the agenda has “already attracted hundreds of billions of dollars in private investment and created nearly 800,000 new manufacturing jobs in everything from semiconductors and electric car batteries to clean energy technology and more.”