By David Shepardson
June 23 (Reuters) – The U.S. Federal Communications Commission said Thursday an auction of wireless mid-band spectrum raised more than $3.5 billion, which will largely be used to fund the replacement of Chinese telecom equipment.
The FCC said up to $3.3 billion of the auction’s proceeds will be used to cover funds borrowed to support the FCC’s “Rip and Replace” program to purge Huawei, ZTE or other Chinese gear from their wireless networks and other programs.
The agency previously estimated removing the Chinese equipment would cost $4.98 billion, but Congress only approved $1.9 billion before deciding to hold the auction.
The FCC said last week that 42% of federal funding recipients have completed replacement and disposal of all Chinese equipment, citing delays due to permitting, supply chain issues, labor shortages and severe weather.
Congress approved the funding and authorized the one-time spectrum auction by the FCC for advanced 5G-grade wireless spectrum in the band known as AWS-3 to help meet rising spectrum demands of wireless consumers.
In 2014, the FCC auctioned AWS-3 spectrum licenses for commercial use, but some winning bidders defaulted on their payment obligations and about 200 licenses were returned to the FCC’s inventory.
Washington has aggressively urged U.S. allies to purge Huawei and other Chinese gear from their wireless networks.
In 2019, Congress told the FCC to require U.S. telecoms carriers that receive federal subsidies to purge their networks of Chinese telecoms equipment.
The FCC last auctioned spectrum in 2022. In 2023 it lost the broad authority from Congress for wireless sales.
(Reporting by David Shepardson; Editing by Cynthia Osterman)
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