US Senate passes law to abolish subsidies for buying Huawei equipment

The US Senate unanimously passed a law that prohibits subsidies to providers for the purchase of equipment from Huawei and ZTE. Only US President Donald Trump needs to approve the law before it takes effect.

The text of the law does not explicitly mention Huawei, but a response from the initiators of the law makes it clear that the law is directed against the Chinese manufacturer of, among other things, network equipment. The law talks about the purchase of equipment that is a potential threat to the national security of the United States.

The law means that providers can no longer receive subsidies for the purchase of equipment from Huawei and ZTE, because the FCC previously labeled it as a threat to national security. This makes purchasing equipment from competitors such as Nokia and Ericsson much more attractive, because there are still subsidies for this.

The law would mainly affect providers in rural areas, who have Chinese-made equipment in the network more often than providers in urban areas. Two years ago, this was 25 percent of providers in rural areas.

Huawei does not agree with the legislation. The company has already filed a lawsuit against the judgment of the FCC and the company says in a response to The Hill that too little money has been set aside for the legislation and that customers and companies of providers in rural areas will be affected.