Amid 'rip and replace' funding debate, some rural wireless carriers move onAmid 'rip and replace' funding debate, some rural wireless carriers move on
Although the FCC has not yet begun releasing funds to remove Huawei and ZTE equipment from US networks, PTCI and United Wireless have begun ripping that equipment out anyway.
May 27, 2022
DENVER – Brian Hough said PTCI ought to be completely finished removing Chinese-made equipment from its wireless network by June. He said the company has already pulled down the majority of that equipment from its towers, and expects to follow detailed federal guidelines on how to destroy it.
Hough's comments are noteworthy considering the US government has not yet released any money for such "rip and replace" efforts. PTCI (Panhandle Telephone Cooperative Inc.) counts around 8,000 mobile subscribers in Oklahoma. It is asking the FCC for around $29 million to tear out "unsecure" Chinese equipment from 44 of its cell towers, and to replace that equipment with gear from "trusted" vendors.
PTCI is ahead of some of its peers. For example, Mike Laskowsky said his company – United Wireless – has so far removed Chinese equipment from around ten of the 110 cell towers containing such equipment. He said United likely won't move too much further until it knows whether the FCC will give it the $173 million it is seeking to fund the project.
A moving price target
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, even though the two Chinese vendors continue to argue their equipment cannot be used for such espionage. 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.
However, the FCC earlier this year published the full list of all the companies asking for money through the program. It found that those requests collectively totaled almost $6 billion.
Now, the agency is working through all those requests to see if they are valid. FCC officials and others are also working with Congress to encourage lawmakers to allocate more money to the program. After all, a wide range of legislators and others argued the issue is a matter of national security.
But it's unclear whether Congress will provide more funds to the FCC's "rip and replace" program. If Congress doesn't put more money into the program, the FCC will be left to match $1.9 billion in funding to almost $6 billion in requests.
And that situation is leaving executives like Laskowsky, from United, and Hough, from PTCI, to figure out what to do next.
A rock and a hard place
"If they [the FCC] give us only 30% of what we're asking for, it will be a very different network than what we're planning for," Laskowsky said. He explained that United is working to upgrade its network to 5G – and that the "rip and replace" program will play a part. But he said he's reluctant to move too far forward without assurances that United will receive the full amount it's seeking. "We're not going to do anything until there's more clarification," he said.
Figure 1: Operators participating in the FCC's "rip and replace" program are often offering services in rural areas.
(Source: Timothy Swope/Alamy Stock Photo)
Laskowsky and Hough made their comments during a session at the Wireless Infrastructure Association's recent Connect (X) trade show here. The venue has become one of the few places where executives involved in the "rip and replace" program have spoken out publicly about their troubles.
For example, Hough explained that the FCC's "rip and replace" program only covers the cost of network equipment and does not cover the related costs of upgrading customers' phones that may be rendered obsolete by the change. He said PTCI has so far spent around $2 million ensuring its customers have new phones.
And Carri Bennet of the Rural Wireless Association, a trade group that represents many of the affected companies, said the "rip and replace" program specifically doesn't cover 5G equipment. She said it only covers 4G equipment. She said the association is working with lawmakers to potentially add in 5G support.
Laskowsky said that United is working to upgrade to 5G, but that he's keeping those costs separate from the work the company is doing in the "rip and replace" program. He said United hopes to eventually invoice the FCC for its 4G ripping and replacing, while keeping the 5G costs out of those invoices.
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