Two workers watching cell tower showing rural telecom carriers removing ZTE and Huawei equipment from their networks

Congress Approves $1 Billion for Rural Telecom Carriers to Remove ZTE and Huawei Equipment From Their Networks

The Senate has passed a unanimous resolution to pay rural telecom carriers $1 billion to remove ZTE and Huawei equipment from their networks. A similar resolution earlier passed the chambers offering $700 million in grants for companies that avoid using Huawei equipment in their wireless networks.

Huawei has come under consistent accusations of spying by the United States government over potential collaboration with the communist Chinese government. Another Chinese telecommunication company, ZTE, incurred fines for violating U.S. sanctions by exporting U.S. technology to North Korea and Iran. The Federal Communications Commission was considering how to implement the ban, but U.S. telecom carriers protested that the orders to remove the existing Huawei equipment would cost them billions of dollars. The bill will be heading to Trump’s desk for signing. President Trump will consider this vote as a significant victory in the war against the use of Chinese equipment in the U.S. networks.

Secure and Trusted Communications Networks Act

Lawmakers passed the bipartisan Secure and Trusted Communications Networks Act in the House Energy and Commerce Committee at the end of last year. Frank Pallone Jr., D-N.J., Greg Walden, R-Ore., Rep. Doris Matsui, D-Calif., and Rep Brett Guthrie, R-Ky, sponsored the bill. Chairman Roger Wicker, R-Miss, sought to push the bill on unanimous consent but faced concerns from Sen. Mike Lee, R-Utah, who questioned the source of funds for the process. However, Sen. Lee dropped his objections allowing the bill to move forward.

In a joint statement, the lawmakers said that having Huawei equipment in the country’s high-speed network posed national security risks. The statement added that the bill would allow keeping the American communications safe while providing a means of rural telecom carriers to replace equipment from Huawei or ZTE. Telecommunications Industry Association (TIA) lauded the measure by saying it would bolster U.S. leadership in 5G security.

Effects of removing Huawei equipment by rural telecom carriers

The Rural Wireless Association (RWA) has resisted the Federal Communications Commission’s requests to rip and replace Huawei equipment indicating that the process would damage the internet across rural areas. The association has estimated that 25% of rural telecom carriers’ operations would face disruptions when the orders come into force. Because major telecom carriers do not use Huawei equipment, the orders would mainly affect rural telecom carriers hence creating a wireless divide across the country. The uncertainty surrounding wireless networks also significantly affects the rural telecom carriers, who already must contend with a harsh business environment.

Although the federal government is reimbursing the rural wireless companies, the cost incurred in replacing Huawei and ZTE might be higher than anticipated. Consequently, the wireless carriers will end up absorbing the extra costs from their coffers. Removing Huawei equipment from the rural telecom carriers will also contribute to the rise in prices of networking gear due to reduced competition. The Chinese company provides cheap equipment hence forcing other manufacturers to lower costs. Such lower costs have been the reason many small rural telecom carriers choose the company over other equipment manufacturers. Huawei said that forcing the rural telecom carriers from using its equipment would lead to layoffs for employees working for the company in the country.

While these shortcomings worry the rural broadband providers, some argue that the removal of Huawei equipment is a necessary step in securing the American wireless network. Despite the company’s denial of its involvement in espionage, the United States has persisted its efforts in removing the company from the country’s wireless infrastructure. Huawei has challenged Trump’s administration to provide evidence of the company’s involvement in espionage. Consequently, the UK government published a list of security flaws identified in Huawei equipment. However, the British government attributed the shortcomings to the software development process rather than deliberate attempts to compromise the equipment. Other manufacturers are yet to provide their equipment for similar testing. It is impossible to verify the credibility of the U.S. accusations because the information remains classified. However, Trump might be using the company as part of the trade war with China. Similarly, given Beijing’s use of technology in repressing dissent and surveillance on its citizens, the accusations might as well be right.