Proposed Legislation Would Restrict American Rescue Plan Funds from Being Used to Purchase Chinese Telecoms Equipment

Senators Mark Warner (D-VA) and Tom Cotton (R-AR) have introduced legislation entitled the "American Telecommunications Security Act" that they say would "prohibit federal funding from the American Rescue Plan Act from being used to purchase Chinese telecommunications equipment, including from Huawei and ZTE."

According to the Treasury Department, the American Rescue Plan "provides $350 billion dollars in emergency funding for state, local, territorial, and Tribal governments to remedy this mismatch between rising costs and falling revenues." The Department further explained that the spending decisions under this law were flexible: "The Coronavirus State and Local Fiscal Recovery Funds provide substantial flexibility for each government to meet local needs—including support for households, small businesses, impacted industries, essential workers, and the communities hardest hit by the crisis. These funds can also be used to make necessary investments in water, sewer, and broadband infrastructure."

With regard to the last item mentioned, broadband infrastructure, concerns have grown in the United States about the use of Chinese-made equipment, and there is a plan in place to remove existing equipment. Warner and Cotton explained the purpose of their legislation as follows:

Warner:

“With states across the country mapping out their plans for quality and affordable high-speed internet as a result of historic funding from the American Rescue Plan, we’ve got to make sure no community is sacrificing network security. That’s why I’m joining Sen. Cotton on a bipartisan bill to ensure states do not purchase equipment or services from companies that pose national security risks – such as Huawei and ZTE.”

Cotton:

"American tax dollars should not be sent to Chinese spy companies like Huawei that undermine our national security. The U.S government must take strong action to cut the Chinese Communist Party out of our networks. Americans deserve both reliable and secure telecommunications technologies."

The substance of the legislation is brief:

‘‘SEC. 12001. PROHIBITION ON USE OF FUNDS TO PURCHASE COMMUNICATIONS EQUIPMENT OR SERVICES POSING NATIONAL SECURITY RISK.

‘‘None of the funds made available under this Act or an amendment made by this Act may be used to purchase any covered communications equipment or service, as de fined in section 9 of the Secure and Trusted Communications Networks Act of 2019 (47 U.S.C. 1608).’’