Rural Carriers Rethinking Expansion After Chinese Ban

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President Trump’s executive order that banned the purchase of equipment from companies posing a national security threat will affect rural America the most, where wireless service is spotty despite years’ long government efforts to improve coverage. Huawei is essential for many wireless carriers that serve sprawling, sparsely populated regions because its gear for transmitting cell signals often costs far less than other options.

The president’s ban is forcing smaller carriers to scrap expansion plans.

 In addition, some of the companies already using Huawei equipment fear that they will no longer receive government subsidies meant to get service to remote areas, reports The New York Times.

Huawei already provides equipment to about a quarter of the country’s smallest wireless carriers. The Rural Wireless Association estimates it would cost members $800 million to $1 billion to replace equipment from Huawei and ZTE, China’s other maker of networking gear. 

Nemont, based near Opheim, Montana, is one carrier using Huawei gear. Its footprint is 14,000 square miles, and requires huge amounts of wires, towers and other costly infrastructure. But the company has only 11,000 paying customers.

Nemont contacted Huawei nine years ago, when its members decided to upgrade their cellular network. With subsidies from the federal government, Nemont was prepared to spend about $4 million on networking equipment like routers and other gear to put on dozens of cell towers across the region, according to The Times.

Nemont CEO Mike Kilgore estimated it would cost $50 million to replace his Huawei equipment. If that is the only option, he said, he might have to shut down the company, leaving his customers without wireless service.

Help may be on the way. A group of senators recently introduced a bill to set aside about $700 million in grants to carriers forced to rip Huawei equipment from their networks, reported Inside Towers. In addition, FCC Commissioner Brendan Carr is heading out to Montana this week and plans to meet with Kilgore, according to the telecom executive.

May 29, 2019         

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