$1.8bn cost to remove banned Chinese kit from rural telcos, says FCC

$1.8bn cost to remove banned Chinese kit from rural telcos, says FCC

Mark Twain telco.jpg

CenturyLink, Cincinnati Bell, Verizon and Windstream are among 51 telcos in the US that use Huawei or ZTE equipment that will have to be removed by order of the regulator.

The Federal Communications Commission (FCC) lists them among 51 companies – mainly rural operators, but some larger telcos – that need to remove the banned equipment, at a cost of more than US$1.8 billion.

The FCC has ruled that telcos cannot use support from the federal Universal Service Fund (USF) to buy equipment and services from “companies that pose a national security threat” – a description that the FCC applies to Huawei and ZTE.

FCC chairman Ajit Pai said: “It is a top priority of our nation and this commission to promote the security of our country’s communications networks. That’s why we sought comprehensive information from US carriers about equipment and services from untrusted vendors that have already been installed in our networks.”

Information submitted to the FCC by carriers say “it could cost an estimated $1.837 billion to remove and replace Huawei and ZTE equipment in their networks”, and the FCC says that they “appear to” qualify for $1.618 billion of reimbursement “to remove and replace such equipment”.

That difference will put carriers $220 million out of pocket. As well as the larger companies, most of those in the FCC’s list are small, rural companies, including local cooperatives. For example, Missouri’s Mark Twain Rural Telephone Company (pictured, via Google Streetview) has 17 exchanges providing services to 25 communities, but operates just 3,500 phone lines.

Panhandle Telephone Cooperative is a membership organisation providing fixed and mobile services in northern Texas and southern Oklahoma, with annual revenues in 2018 of $32.5 million.

The FCC has not identified specific threats that are caused by the use of Huawei and ZTE kit, and the two Chinese companies have always denied that their equipment and services pose any security threat.

“By identifying the presence of insecure equipment and services in our networks, we can now work to ensure that these networks – especially those of small and rural carriers – rely on infrastructure from trusted vendors,” said Pai.

“I once again strongly urge Congress to appropriate funding to reimburse carriers for replacing any equipment or services determined to be a national security threat so that we can protect our networks and the myriad parts of our economy and society that rely upon them.”

The full list of carriers affected is: Adak Eagle Enterprises; Albion Telephone Company; América Móvil; American Broadband Communications; American Samoa Telecom; ATN International; Baraga Telephone Company; Bristol Bay Cellular Partnership; Buffalo Lake Erie Wireless Systems; CenturyLink; Chariton Valley Telephone Corporation; Cincinnati Bell; Cintex Wireless; Copper Valley Telephone Cooperative; Crystal Automation Systems; DeKalb Telephone Cooperative; ENMR Telephone Cooperative; Futurum Communications; Gallatin Wireless Internet; Hargray Communications Group; Hiawatha Communications; Hilliary Communications; IdeaTek Systems; JAB Wireless; James Valley Cooperative Telephone Company; Laurel Highland Total Communications; Leaco Rural Telephone Cooperative; LICT; Mark Twain Rural Telephone Company; Mercury Network Corporation; Metronet Holdings; Natural GC; NE Colorado Cellular; Nemont Telephone Cooperative; NewPhone Wireless; North American Local; Oklahoma Western Telephone Company; Panhandle Telephone Cooperative; Pine Belt Communications; Pine Telephone Company; Roome Telecommunications; Santel Communications Cooperative; SI Wireless; TC Telephone; Texas 10; Triangle Telephone Cooperative; Union Holding; United Telephone Association; Verizon; Western Elite Incorporated Services; Windstream Holdings.


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