Union Wireless is one of the many smaller wireless carriers that operates a network built with equipment from China's Huawei. And officials from the company told the FCC this week that the only way to change that situation is to replace its existing network with a completely new one.
"At this time, it is not possible to insert gear provided by a non-Huawei equipment vendor into an operating network utilizing Huawei equipment. An entirely new network must be constructed," Union executives told FCC officials, according to a new filing from the company. "Upon the completion of construction, the old network must be cut over to the newly-constructed network, after which the old network can be dismantled."
And that won't be cheap, Union said.
The company estimated it will cost up to $110 million to replace and install a new network. The company said it has invested over $34 million in Huawei equipment for a network that covers 418 cellular towers across 90,000 square miles in locations across Wyoming and elsewhere.
At issue is a new proposal by the FCC to pay operators like Union to replace their Huawei equipment. The FCC had previously proposed preventing operators like Union from using government subsidies to buy additional equipment from Chinese operators like Huawei, but just last month it expanded that suggestion to also include funding the complete eradication of Huawei equipment from US networks. (To be clear, the FCC's program doesn't cover every US telecom operator but only those that have received money from its Universal Service Fund (USF), which is designed to expand Internet services in rural areas.)
The FCC claims that equipment from Chinese vendors like Huawei and ZTE can be used by the Chinese government for international espionage. But those vendors have loudly opposed that argument. And Huawei, for its part, has been filing hundreds of pages of evidence to back up its claims. The FCC, meanwhile, devoted roughly four pages to a defense of its own position, though it cited reports from a number of other sources.
The situation is critical to operators like Union that are stuck in the middle of an international political firestorm, and it has tested not only issues of economics but much more personal questions of patriotism and loyalty.
"The Union Telephone Company was founded over 100 years ago by the father of a World War II veteran who survived the Allied landing at Omaha Beach, and today the company places a priority on providing opportunities for veterans, employing persons who have served in the US military at a rate twice that of the percentage of veterans in the general civilian population," the company told the FCC. "If it is the US government's decision to replace equipment from Huawei/ZTE or other companies that pose a threat to our nation's security, then Union Wireless will undertake to meet the challenge."
A difficult proposition
But apart from detailing the financial costs associated with removing Huawei equipment, Union officials also laid out the logistical and pragmatic issues associated with a complete and total ban on the purchase of Chinese equipment by US telecom companies.
For example, what about Chinese-made generators?
"Overbroad language... could restrict carriers from installing backup generators with USF support," the Union officials said. "If this is the case, carriers may choose not to do the backup generator installation at all. This would frustrate the essential purpose of the federal universal service fund: to provide support for investments in high-cost areas that private businesses might not otherwise choose to make, to preserve and advance universal service throughout rural and high-cost areas."
Union executives also pointed out that a broad ban could affect everything from the equipment used to build a road to a cell site to the concrete used at the base of a cell tower.
Finally, the Union officials wondered how they might be able to keep Chinese components out of their networks altogether.
"Most times, when a product is manufactured by a covered company, a carrier can discern that fact. On the other hand, when a covered company manufactures one or more components that are combined with those manufactured elsewhere and made part of a much larger finished product, such as a switch, it is very difficult and sometimes impossible for a purchaser to discern whether the entire finished product is 100% free of components manufactured by covered companies," the Union executives noted." It is also very difficult for small carriers to obtain representations, warranties, and indemnifications from equipment vendors about the content of their products. Accordingly, Union Wireless suggested that the Commission may seek to have equipment vendors make clear that their products do not contain components sourced by a covered company."
On that last question, the US wireless industry is already looking for solutions. For example, as initially reported by Light Reading, US telecom association ATIS recently announced it is now working to address "5G supply chain standards and development of assured commercial 5G networks."