Here is every company asking for FCC 'rip and replace' money

Dozens of companies – both big and small – have stepped forward to ask the FCC for money to tear out "unsecure" equipment from their networks.

Some companies, like Inland Cellular, are only asking for a few hundred thousand dollars ($117,183 to be exact). Others, however, are asking for a lot more. For example, Viaero Wireless is seeking $1.2 billion in US government funding for the effort.

The number of companies asking for FCC money, and the size of their requests, is far above even the most aggressive predictions. Specifically, the total amount of money involved in the FCC's "rip and replace" program today – almost $6 billion – is more than eight times the $700 million lawmakers initially contemplated just three years ago.

"We've received over 181 applications from carriers who have developed plans to remove and replace equipment in their networks that pose a national security threat. While we have more work to do to review these applications, I look forward to working with Congress to ensure that there is enough funding available for this program to advance Congress's security goals and ensure that the US will continue to lead the way on 5G security," FCC Chairwoman Jessica Rosenworcel said in a statement.

The FCC's "rip and replace" program aims to reimburse US network operators for the costs involved in removing "unsecure" equipment – gear from Chinese vendors ZTE and Huawei – from their networks. The goal is to prevent Chinese spies from gaining access to US networks; however, the two Chinese vendors continue to argue their equipment cannot be used for such espionage. Nonetheless, lawmakers initially allocated $700 million to the program in 2019 – but analysts and others quickly began warning that wouldn't be enough. Based on FCC estimates, Congress set aside $1.9 billion for the program at the end of 2020.

FCC is now going back to Congress to ask for even more money to pay for a program that now totals $5.6 billion in requests.

Exploitable RAN

Some companies participating in the program are warning of bloat. "The real story is how certain suppliers are exploiting US taxpayers," argued John Baker of Mavenir, one of the equipment vendors looking to work with operators in the program.

Mavenir is one of a handful of US-based open RAN proponents. The company is hoping to use the interfaces created by open RAN technology to insert its equipment into wireless networks globally.

In the rip and replace program specifically, Mavenir successfully petitioned the FCC to acknowledge that some open RAN equipment is indeed less expensive than traditional, classic RAN equipment. In doing so, the agency essentially formalized Mavenir's argument to potential customers that its equipment would be less expensive than equipment from massive, established 4G and 5G equipment suppliers like Nokia and Ericsson.

However, those two vendors have so far managed to rack up significant wins in the rip and replace program. Indeed, if Viaero's rip and replace funding is approved, most of the $1.2 billion it requested will go to Swedish vendor Ericsson to replace Huawei's core, radio access network (RAN), microwave and router equipment across more than 900 LTE cell sites. That equates to roughly $1.2 million per cell site – an astounding figure considering Dish Network has said it expects to cover the entire US with just $10 billion spread across an estimated 40,000 open RAN cell sites, or roughly $250,000 per site.

In other rip and replace deals, Union Wireless said its $688 million would go for Nokia equipment, while Montana's Triangle Communications said its $18.3 million would go to Mavenir.

True costs

Ericsson argued against claims that it is overcharging for its equipment. "Purpose-built solutions represent the most mature, resilient and highest performing alternatives" to Huawei's equipment, the company wrote in response to questions from Light Reading. "Open RAN alternatives, at this time, have maturity and systems integration costs that may be prohibitive for this important application."

Ericsson also addressed the size of Viaero's funding request, albeit obliquely. "With respect to individual customer projects, scope varies considerably, particularly in swap situations, wherein product costs are often a relatively small component of a total solution. As such, attribution to a particular product or service is not possible," the company wrote.

Ericsson officials have acknowledged the company will support open RAN technologies where and when appropriate. But company officials also argue that Ericsson's traditional, classic RAN products are top-of-the-line offerings that cannot be compared with open RAN alternatives.

Regardless, a number of companies and associations are calling for Congress to allocate more money to the FCC's rip and replace program, which is formally called the "Secure and Trusted Communications Networks Reimbursement Program."

"Nokia is working to support the providers engaged in the 'rip and replace' program," the company said in a statement to Light Reading. "We believe it is imperative for Congress to provide additional funding to meet the program's estimated needs and to do so at the earliest possible opportunity to provide certainty and to maintain momentum in the program."

"It is incumbent on Congress and President Biden to act quickly so that impacted carriers have the assurance necessary to move forward with eradicating this ongoing threat while continuing its efforts to provide critical services to unserved and underserved households in rural America," agreed Carri Bennet of the Rural Wireless Association (RWA), which represents many of the operators involved in the program.

The association said that, under the FCC's current rules, most program participants would get a pro rata share of the available funding if Congress doesn't allocate more money. Meaning, most companies would only get a third of their requested funding. And other participants – including those with more than 2 million customers, such as Lumen – would receive no funding.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano