Senators propose over $1 billion for 5G alternatives to China’s Huawei

Sen. Mark Warner (D-VA)

Drew Angerer | Getty Images

A bipartisan group of senators introduced legislation Tuesday that would pump more than $1 billion into developing Western 5G equipment alternatives to China’s Huawei.

Reasoning that Huawei has been “h]eavily subsidized by the Chinese government,” the Utilizing Strategic Allied (USA) Telecommunications Act would help Western firms compete and become a robust player in next generation communication technology, according to a press release sent by the office of Sen. Mark Warker, D-Va., a co-sponsor of the bill.

The U.S. has long held national security concerns and suspicions about Huawei’s ties to the country’s Communist Party leadership. Last year, it placed the company on a blacklist prohibiting U.S. companies from doing business with the firm without a special license.

The bill proposes that the Federal Communications Commission direct at least $750 million or up to 5% of annual auction proceeds from new auctioned spectrum licenses to create an open-architecture model (O-RAN) research and development fund. The fund would be managed by the National Telecommunications and Information Administration (NTIA) with input from other agencies.

Another $500 million would become a Multilateral Telecommunications Security Fund, which would be available for 10 years “to accelerate the adoption of trusted and secure equipment globally and to encourage multilateral participation.” The fund would be created in conjunction with foreign partners and would require reports to Congress on how the money was being used.

The bill would also encourage the U.S. to further its leadership in International Standard Setting Bodies to help set guidelines on telecommunications and work to make Huawei alternatives more affordable through various policies.

A bipartisan effort

Chairman of the Senate Intelligence Committee Richard Burr, R-N.C., is a co-sponsor of the bill, alongside Republican Senators Marco Rubio of Florida and John Cornyn of Texas. Democratic Senators Bob Menendez of New Jersey and Michael Bennet of Colorado are also co-sponsors alongside Warner.

In their statements, the senators echoed the need for Western alternatives in 5G technology to ensure access to secure and reliable communications networks.

“Every month that the U.S. does nothing, Huawei stands poised to become the cheapest, fastest, most ubiquitous global provider of 5G, while U.S. and Western companies and workers lose out on market share and jobs,” Warner said in a statement.

Warner, the vice chairman of the Senate Select Committee on Intelligence, co-founded wireless company Nextel before his time in the government.

“The widespread adoption of 5G has the potential to transform the way we do business, but also carries significant national security risks,” Burr said in a statement. “Those risks could prove disastrous if Huawei, a company that operates at the behest of the Chinese government, military, and intelligence services, is allowed to take over the 5G market unchecked.”

The bill comes as scrutiny of China-based companies has ramped up. Last year, the U.S. filed criminal charges in two cases against the company, seeking the extradition of its CFO, who had been arrested in Canada. The trial for her extradition will begin in Canada on Jan. 20.

Lawmakers’ concerns about Chinese officials’ power over local businesses has extended beyond telecommunications. Social media company TikTok has been the latest subject of U.S. skepticism. The Committee on Foreign Investment in the United States (CFIUS) is investigating the company’s Chinese parent company, ByteDance, over national security concerns through its past acquisition of Musical.ly, the precursor to TikTok, CNBC has previously reported based on a source familiar with the matter. Rubio had raised alarms about the deal back in October, asking the committee to investigate.

WATCH: Why the US thinks Huawei has been a massive national security threat for years

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