Industry Asks: Slow Roll or ‘Rip & Replace’ Chinese Network Gear

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“We need to transition carriers away from insecure equipment as soon as possible. A ‘rip and replace’ action may be required,” said FCC Commissioner Geoffrey Starks on Thursday. He spoke during an FCC workshop he convened, on how to solve the national security threat caused by insecure telecom equipment. 

Much of the discussion centered on Huawei and ZTE. Jim Lewis is the Senior Vice President and Director, Technology Policy Program, Center for Strategic & International Studies. He said America’s relationship with China was much better five to 10 years ago. But now, he described China as an, “economic and espionage threat.”

“A lot of what Huawei sells is the result of commercial espionage,” said Lewis. “China is the single largest espionage actor in the world,” he explained. The country, “has become the leading opponent of the U.S., reaching levels we saw in the Cold War,” Lewis said. 

Professor Jonathan Mayer, Assistant Professor of Computer Science and Public Affairs, Princeton University, suggested carriers conduct an inventory of their network equipment as soon as possible.  

Pine Belt Telephone Company President John Nettles suggested the FCC ask Huawei and ZTE which carriers they sold equipment to in the U.S. and what that equipment was, to learn exactly what insecure gear exists in networks.

“Whatever the U.S. decides,” to do about the problem, said USTelecom VP Policy and Advocacy Mike Saperstein, “it should try to avoid harming American carriers.” Nokia VP Policy and Government Relations, Brian Hendricks said: “When you trust your supplier, you trust that those vulnerabilities are not there purposefully. And that when they are identified, they will be remediated.”

Hendricks noted, the U.K. recently made the decision to allow Chinese telecom gear to remain in their network, but not at the core. That won’t work for 5G, said Hendricks, because 5G will have a,“much more distributed core.”

Lewis summed up the questions facing the telecom industry: “The issue is, can we use some Chinese equipment, or do we have to rip it out? It’s a cost question. And, is there a way to manage this?”

Rural Wireless Association General Counsel Cari Bennet stressed that when the gear was purchased five to 10 years ago, the purchases made economic sense. “It was to make efficient use of funding,” explained Bennet. “Nothing our members did was illegal.”

Some 25 percent of RWA’s members have deployed either Huawei or ZTE equipment in their networks. RWA estimates total replacement costs range from $800 million to north of $1 billion, and that doesn’t include fiber-only networks or backhaul. “We think the costs to replace all that will be much more,” she said. Bennet said the U.S. might start by contracting third-party companies to monitor carriers’ networks, so something is done while the replacement work proceeds. All participants agreed replacing suspect gear will take time.

Participants in the workshop hope Congress provides funding to reimburse small carriers for swapping out their Chinese-made equipment — and not take money away from current sources of rural funding, like the Universal Service Fund. Saperstein agreed rural America telecoms need to be considered no matter which way the U.S. goes. “We need to come up with a more clear path forward. They didn’t do anything wrong when purchasing this,” equipment, he said.

By Leslie Stimson, Inside Towers Washington Bureau Chief

June 28, 2019

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