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How much of a national security risk does the USA think Huawei and ZTE pose?
$1.9 billion worth of risk, according to the nation’s Federal Communications Commission (FCC), which has opened its “Supply Chain Reimbursement Program Filing Window” during which carriers can apply for cash in return for kicking the Chinese companies out of their networks.
As explained in the FCC’s announcement of the program, the Secure and Trusted Communications Networks Act of 2019 saw the US government dangle the dollars to cover “costs incurred in the removal, replacement, and disposal of covered communications equipment or services from their networks that pose a national security risk”.
Only ZTE and Huawei kit is held to pose such a threat.
The program is open only to carriers with fewer than ten million customers, and only to carriers that acquired Chinese kit before June 30th, 2020. The FCC definition of eligible entities also includes “schools, libraries or health care providers, or consortiums thereof, to the extent they provide such facilities-based broadband service to end users”. Applicants are also required to provide asymmetric services that offer 200kbps or more in one direction. Eligible entities can file their claims between October 29th, 2021, and January 14th, 2022. The FCC will notify successful applicants not long afterwards, then in Q2 2022 will advise of funding allocations.
The Register advises network administrators at eligible carriers to think carefully about when they book holidays: the FCC expects invoices for replacement kit to arrive in Q2 and will start handing out cash at that point. But it would be rash to assume that every piece of kit ordered at that time will arrive, given Cisco’s warning that supply chain challenges could persist into Q3, 2022.
- Huawei CFO Meng Wanzhou admits lying about Iran deal, gets to go home
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- FCC finalizes $1.9bn compo deal for telcos forced to rip’n’replace Huawei, ZTE gear
It’s not often that vendors get a free kick at displacing a rival, so whenever kit is delivered and installed, Cisco and its fellow networking vendors are going to enjoy themselves. A little extra delight could flow from the fact that the FCC is willing to let carriers pay for their new kit in instalments, and receive reimbursement on the same schedule. So networking vendors can spread this windfall out across a few quarters – or perhaps even get some new customers on the subscription treadmill.
Huawei has labelled the program “an unrealistic attempt to fix what isn’t broken” and lamented the disruption that network operators will face as they rip and replace kit.
The FCC’s info doesn’t specify when it wants replacement equipment in place. And of course it omits to mention that the United States’ National Security Agency has tampered with Cisco kit to install backdoors – a practice that saw Cisco ship its products to fake identities in the hope that spooks would be left in the dark about the identity of some sensitive customers. But of course spying isn’t a national security threat when you’re the one doing it. ®
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