RCRC: Rural Broadband Update

The Federal Communications Commission (FCC) issued a notice of proposed rulemaking this week that will prohibit state and local governments from using Universal Service Fund (USF) dollars for equipment and services from providers identified as a national security risk. The order is targeting China-backed firms ZTE and Huawei who provide telecommunications equipment to U.S. service providers.

The impact of the order will be felt by local and rural service providers who rely on cheap Chinese equipment for high-cost broadband deployment projects in rural areas. The FCC argues it is protecting America’s supply chain and communications work from foreign interference but the USF is the agency’s primary arm for rural broadband funding and the order will have a chilling effect on private investment in rural broadband.

Source: RCRC Barbed Wire Newsletter

The ARRA Broadband proposal had a buy American requirement, that had to be rescinded as key networking components were no longer manufactured in the US. The issue is more than protecting the Amerian supply chain, there is a national security aspect.  There is a suspicion that China chip manufacturers have an embed code that they can turn on to monitor the traffic flowing over the router connections.  There is a lot which goes on in the black world that is often pasted over with less revealing explanations, like trade protection.

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