再见, 华为

What does President Trump's Executive Order on Securing the Information and Communications Technology and Services Supply Chain have to do with the E-Rate, you might ask?  It will probably affect which vendors you can buy equipment from.

Not that the FCC needed an Executive Order to get on this.  Back in April, the Commission released a Notice of Proposed Rulemaking "to prohibit, going forward, the use of USF funds to purchase equipment or services from any communications equipment or service providers identified as posing a national security risk...."  The NPRM quickly focused on two vendors: Huawei and ZTE.  The FCC created Docket 18-89 for comments, and they keep coming in.

Meanwhile, the 2019 National Defense Authorization Act (skip to section 889, page 282) declared that no executive agency should purchase from Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company.  And the Commission sought comment on whether that applied to purchases through the USF.

So one of these days, the FCC is likely to prohibit the use of equipment from those countries.  Does that matter?  Well, I couldn't find any instances of E-Rate applicants making any C2 purchases directly from Huawei  (SPIN 143036885) or ZTE (SPIN 143044152).  But some of the comments in the docket are from telecom companies using equipment from those vendors who are going to be facing some serious replacement costs.  So perhaps the cost of some C1 services will be creeping up.

Meanwhile, the tariffs on Chinese imports have already affected C2 pricing.  The September 10% tariffs increased prices from many C2 manufacturers, but I haven't read anything about the effect of the new jump to 25%, but it's got to have some effect.