‘Reboot’: Tech Cold War Is Disrupting Wireless Carriers
Deep in a pine forest in Wilcox County, Alabama, three workers Suspended from the top of a 350-foot cellular tower. They were there to remove and replace Chinese equipment from the local wireless network.
Three hours into the work, the team ran into trouble. Replacement gear from a European company blocked the plane’s safety beacon. “We’re in trouble,” said a crew member on the ground. “They said it blocked the beacon.”
The project has been delayed for months due to storms, slow equipment shipments and labor shortages. John Nettles, president of Pine Belt Cellular, a family business that stands at the bottom of the tower, said the new chaos uncovered earlier this month will add at least two more days and destroy the budget.
“Washingtonians think it’s easy to replace equipment, but there are always unexpected problems, there are always more costs, and there are always delays,” he said.
As the U.S. and China vie for geopolitical and technological dominance, the fallout has rippled through rural Alabama and small wireless carriers in dozens of states.They are the recipients of the Biden administration’s sweeping policies to suppress China’s rise, including trade restrictions, a $52 billion package to support domestic semiconductor manufacturing against China, and Spin off video app TikTok From its Chinese boss.
What wireless carriers have to do, under a program known as “rip and rebuild,” has become the most visible physical manifestation of a technological cold war between the two superpowers. The plan, which went into effect in 2020, requires U.S. companies to dismantle telecommunications equipment made by Chinese companies Huawei and ZTE. U.S. officials have warned that equipment from these companies could be used by Beijing for espionage and to steal trade secrets.
Instead, U.S. carriers had to use equipment from non-Chinese companies. The FCC, which oversees the program, will then reimburse the carriers from $1.9 billion in funding to cover their costs.
Similar rip-and-reboot efforts are underway elsewhere. In Europe, Huawei products have been an important part of telecommunications networks, and operators in Belgium, Britain, Denmark, the Netherlands and Sweden have also replaced Chinese equipment for security reasons, according to tracking research firm Strand Consult.
“Reboot is the first front in the larger story of U.S.-China decoupling that will continue into the next decade as the world races to compete with artificial intelligence and other technologies,” said the former head of the Federal Communications Commission (FCC). said Blair Levine. Staff member and fellow at the Brookings Institution.
But cleaning Chinese technology from U.S. networks will not be easy. Costs have ballooned to over $5 billion, According to FCC, more than double what Congress appropriated for reimbursement. Many operators also face lengthy delays in the supply chain for new equipment.
The burden of the program has fallen disproportionately on smaller carriers, which are more reliant on cheap equipment from Chinese companies than big players like AT&T and Verizon. Given the difficulty of reinventing the wheel, some smaller wireless companies now say they may not be able to upgrade their networks and continue to serve their communities, where they are often the only internet provider.
“For many rural communities, they face a disastrous choice between continuing to use surveillance networks that are already ripe for insecurity, or having to cut them off,” said FCC Democratic Commissioner Geoffrey Starks. service.”
Last month, Republican Senator Deb Fischer of Nebraska, introduced a bill Close the gap in funding for carrier retirement and replacement. Passing the bill will be challenging because similar legislation has failed twice in the past year and amid intense debate in Washington over government spending and the debt ceiling. But “we have to follow through,” Ms Fisher said. “Some of these operators may go out of business.”
The scrutiny of Chinese telecommunications companies dates back more than a decade. In 2012, a congressional committee Published reports on Huawei and ZTE Warn these companies about their ties to Beijing. In 2019, former President Donald J. Trump restricted U.S. companies from selling goods to Chinese companies, while the FCC banned companies receiving federal subsidies from buying Huawei and ZTE equipment. The agency expanded those restrictions last year to restrict all imports from Chinese companies.
Reboot after Congress passed a law in January 2020 that created reimbursement for jobs. But the cost of the program quickly skyrocketed.
in january, FCC says it has received 126 applications Seek funds beyond their ability to repay. Lawmakers have underestimated the cost of crushing Huawei and ZTE equipment, and new equipment and labor costs have risen. The FCC says it can only cover about 40% of the cost.
Some wireless carriers put replacement efforts on hold immediately. United Wireless of Dodge City, Kansas, wrote in a regulatory filing: “Until we determine the total project funding, the project will continue to be delayed as we wait for the necessary time to build and pay for new network equipment. Funding.” FCC in January.
Huawei declined to comment; ZTE did not respond to a request for comment.
In southern Alabama’s Black Belt region, known for its historic cotton plantations and paper mills, compliance with demolition and replacement has been a core initiative at Pine Belt Cellular, one of the few wireless operations One of the largest businesses serving 2,000 homes and businesses in five counties.
The company was founded in 1958 by James Nettles, a country doctor in Arlington who installed phone lines in his patients’ homes so they could call him for home visits.
After James Nettles’ son John Nettles joined the telephone industry in 1988, the family expanded into wireless service with the support of federal grants. In 2011, John Nettles received additional FCC subsidies and upgraded the Pine Belt’s network to include broadband for fast internet service.
He says six device makers have recommended their devices to him. Mr Nettles chose ZTE because the company offered equipment that cost less than half the cost of other bids. Pine Belt initially bought $5 million worth of ZTE equipment, including hundreds of antennas, radios and other equipment for its 67 base stations.
The FCC “told me to find the cheapest equipment, and no one thought twice that ZTE was Chinese,” he said.
But since the restrictions on ZTE’s equipment were imposed, Nettles has spent most of his time trying to replace it with equipment from Western companies such as Nokia and Microsoft.
At the central networking hub of the Pine Belt, a windowless cinder-block building in downtown Selma, seven large metal boxes were recently filled with ZTE servers, processors and switches used to move Internet traffic and connected phone calls. There are also racks of new Nokia and Microsoft devices and Dell computers. Chinese and Western-made technologies will run side-by-side until the Pine Belt’s base stations are completely free of ZTE equipment.
In 2021, Pine Belt filed for reimbursement from the FCC for $68 million in replacement costs. But last July, the agency said it could only refund up to $27 million in fees. Mr. Nettles said Pine Belt has completed about 15 percent of the transition from Chinese equipment and is already $5 million over the FCC’s budget.
Earlier this month, Mr. Nettles drove 15 miles to a rusting 300-foot tower where two workers were preparing to dismantle Chinese equipment. Armed with ropes and pulleys, they plan to climb the tower to assess whether it can withstand the weight of an additional three antennas and radios from Nokia.
Workers decided they had to pour cement under the tower to create a stronger foundation for the extra load. During the demolition and replacement work, the tower had to secure old ZTE and new Nokia equipment to prevent any interruption of service.
As Mr. Nettles parked his car near the tower, a Selma customer called to complain that his cell phone service was intermittent. The customer was between a tower with ZTE equipment and another tower with Nokia equipment.
“There was poor communication between the ZTE and Nokia equipment,” Mr Nettles tried to explain. “I’m sorry for the inconvenience.”
adam satariano Reports from London.