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March 21, 2019
Vermont wireless network operator VTel said it is in the process of replacing some Huawei equipment in its network with equipment from Ericsson, a move that comes amid rising concerns among US officials that equipment from Chinese suppliers like Huawei pose a threat to national security.
"Our wireless network is built almost entirely with Ericsson, though two of our 60 rural microwave links installed in 2017 are Huawei, which we are in the process of replacing with Ericsson equipment," VTel wrote in a recent filing to the FCC. VTel operates a fiber network throughout parts of the Northeast, and a wireless network covering much of the state of Vermont.
Continued the company: "While VTel has no technical insights into the US government's position that equipment from Huawei, ZTE, and other Chinese manufacturers pose security threats, VTel understands... that if the US government determines that Huawei and ZTE pose a threat to the security of our nation's communications networks, we have an obligation to support this policy."
VTel also wrote of a run-in the company had with fiber provider FirstLight Fiber, which provides fiber links in the Eastern portion of the US. "VTel recently received a request for interconnection from FirstLight Fiber, an operator owned by a French multinational that we understand has extensively deployed Huawei equipment in its network," the operator wrote in its filing to the FCC. "During negotiations of an interconnection agreement, VTel sought to include language mirroring the language in section 889 of the John S. McCain National Defense Authorization Act for fiscal year 2019. This language was intended to mitigate the risk that interconnecting could undermine the security of VTel's network and threatened its continued ability to receive universal service support. FirstLight refused to agree to this language and requested arbitration by Vermont Public Utility Commission. However, for reasons only FirstLight can explain, FirstLight subsequently withdrew its request for arbitration, opting not to interconnect with VTel."
FirstLight did not immediately respond to questions from Light Reading on the matter.
VTel's filing to the FCC focused on the agency's proposal, issued last year, to prevent telecommunications companies that receive government funding from using equipment from providers that pose a security threat. Specifically, the FCC is considering a ruling that would bar companies using Universal Service Fund (USF) money from using equipment from companies like Huawei and ZTE. In its recent filing, VTel said the FCC should freeze USF payments to companies that have equipment from the likes of Huawei and ZTE.
Such a rule by the FCC would align with Congress' John S. McCain National Defense Authorization Act, signed into law last year by President Trump, that essentially prohibits the federal government from purchasing equipment from Chinese vendors, including Huawei and ZTE, due to security concerns.
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Huawei has strongly argued against US government claims that its equipment opens a conduit for Chinese spying. In the same USF proceeding at the FCC, the company filed details about its lawsuit against the US government on the issue, citing a Trump tweet on 5G as part of its reasoning for the move.
The FCC's USF proceeding is part of a much bigger battle between the US and Chinese governments over trade, a geopolitical firestorm that stretches from a US government investigation into IP theft to an arrest of Huawei's CFO for allegedly conducting business with Iran. At the center of the issue are US government requests to allies like Germany and Japan to prevent telecom companies in those countries from also purchasing equipment from the likes of Huawei and ZTE. (Based on the latest developments, though, nations including the U.K. and Germany don't appear to be acquiescing to those requests.)
Incredibly, tiny US telecommunications companies like VTel have found themselves caught in the crossfire. For example, the Rural Wireless Association in the US said that it believes fully 25% of its membership -- or about a dozen of its roughly 50 member companies -- currently use equipment from Chinese suppliers like Huawei and ZTE. Rural wireless network operators that have admitted to purchasing equipment from Huawei include United TelCom, SI Wireless, Viaero, James Valley Telecommunications (JVT), NE Colorado Cellular, United Telephone Association, Nemont Telephone Cooperative and Union Telephone Company.
Will those companies remove Huawei's equipment from their networks? "We plan to do what the federal government says that we should do. To the extent that that equipment needs to be replaced, we plan to replace it. Of course we would need funding to do that," said the Rural Wireless Association's General Counsel Carri Bennet during a recent Congressional hearing. She said the group is currently having discussions with the FCC and Congress about how to go about doing just that.
Of note, T-Mobile has offered to help RWA members strip out Huawei equipment and replace it with equipment from another vendor. At the same hearing, T-Mobile CEO John Legere said that "we've even offered to play a role with the Rural Wireless Association and help them possibly use some of our pricing power to purchase alternative equipment." Perhaps not surprisingly, he made those comments while looking to garner Congressional support for T-Mobile's proposed merger with Sprint.
A possible government action to replace Huawei equipment in US wireless networks may well be on the table. For example, representatives from the WTA – Advocates for Rural Broadband trade group recently met with an FCC official to urge the agency to "use its expertise to study the matter further so that the Commission and industry could have a complete grasp of the costs of a transition away from equipment prohibited by the 2019 National Defense Authorization Act. Such a study should also consider what types of equipment actually impact national security and should be banned versus what types of equipment are deemed to not be a threat."
It's currently unclear whether the US government plans to cough up the millions of dollars it will surely cost to replace Huawei's equipment among RWA's membership. But such an action could play into the regulatory strategy of companies like VTel that are proactively moving away from Chinese suppliers. And it would also put Trump's money where his mouth is, so to speak.
Editorial Director, 5G & Mobile Strategies, Light Reading
Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.
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