US Senators propose $1bn fund to build 5G rivals to Huawei

$1bn funding intended to provide alternatives to telecoms equipment made by Huawei and ZTE

Six senators in the US have introduced bipartisan legislation mandating the government to subsidise US firms developing 5G technology. The idea is to help loosen Huawei's grip on the 5G sector.

A draft version of the legislation [PDF] doesn't name specific firms, but its sponsors claimed that the act would help build-up alternatives to telecoms equipment made by ZTE and Huawei - Chinese firms with ties to their national government.

Trump administration pressure over the past year has prevented major mobile carriers in the US from using Huawei equipment in their networks

The US government believes that hardware made by Huawei could be used by Chinese intelligence agencies to spy on western countries. Trump administration pressure over the past year has prevented major mobile carriers in the US from using Huawei equipment in their networks. It has also applied pressure on allied nations to follow suit.

The US Federal Communications Commission (FCC) has also banned smaller carriers in the US from using Huawei's equipment as well.

Despite those measures, Huawei still remains the world's largest telecoms equipment maker, ahead of Finland's Nokia and Sweden's Ericsson.

The Utilizing Strategic Allied (USA) Telecommunications Act proposes a research and development fund to support technology firms developing 5G wireless technology. The fund would receive at least $750 million or up to five per cent of the annual earnings, whichever is greater, from new auctioned wireless-spectrum licences by the FCC. It would be managed by the National Telecommunications and Information Administration.

When it comes to 5G technology, the decisions we make today will be felt for decades to come

A separate $500 million Multilateral Telecommunications Security Fund would also be created to support companies that deploy "trusted and secure" equipment worldwide. The bill recommends creating this fund in association with overseas partners to help encourage multilateral participation. It would be available for 10 years and would require reports to Congress on utilisation of the fund.

The new bill was introduced by six senators, including Richard Burr, a Republican from North Carolina and Chairman of the Senate Select Committee on Intelligence; Marco Rubio, a Republican from Florida and a member of the Senate Intelligence and Foreign Relations Committees; and Mark Warner, a Democrat from Virginia.

"When it comes to 5G technology, the decisions we make today will be felt for decades to come," said Senator Richard Burr.

we cannot allow Chinese state-directed telecommunications companies to surpass American competitors

"This legislation will help maintain America's competitive advantage and protect our national security by encouraging Western competitors to develop innovative, affordable, and secure 5G alternatives."

Florida Senator Marco Rubio commented: "We are at a critical point in history for defining the future of the US-China relationship in the 21^st century, and we cannot allow Chinese state-directed telecommunications companies to surpass American competitors.

"It is not only in our national security interests to support American competition in the 5G market, but it is also in our economic interests to continue to build and support an economy that leverages American strengths and creates American jobs in the industries of the future - without relying on malign Chinese state-directed actors like Huawei and ZTE."