A $1.5-billion telecom investment from the U.S. government is intended to jumpstart an alternative to Huawei and further protect national security.
- Currently, the majority of telecommunications equipment is manufactured overseas by companies like Huawei, Nokia, and Samsung.
- The $1.5 billion investment from the federal government will give a U.S.-based alternative a headstart on building a competitor for these overseas companies.
- Exclusively producing these products needed for communication overseas leaves the U.S. vulnerable to being cut off from communication technology.
- Open Radio Access Network (ORAN) will most likely be the beginning of this new program, Axios reports.
Why it’s news
This funding is another result of the $280-billion Chips and Science Act signed into law earlier this year. So far this legislation has resulted in multiple chip manufacturers moving production to the U.S. Now the huge outlay of funds will be directed toward communications.
In October, the Federal Communications Commission announced its intention to ban the sales of multiple Huawei products—citing security concerns. Sales of new Huawei devices as well as video surveillance equipment from other Chinese companies were banned.
Already commercial adoption of ORAN products is beginning, but it is a slow transition. The products are currently being used for new networks or in limited trials. Both Dish Network and Rakuten have begun using the system.
Shifting away from Huawei’s products will take time, however. Grants offered through the $1.5-billion program could help expedite the process.
Though a small portion of the overall $280-billion legislation, it’s a significant government expenditure in an environment of increasing federal spending under the Biden administration, critics of the bill argue.