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Huawei fight is a threat to rural internet

Suhauna Hussain and Alice Su, Los Angeles Times on

Published in Business News

In swaths of rural America, along roads where there are just a few farms or homes within a mile-long stretch, customers are so few that the likes of AT&T and T-Mobile don't bother to build cell towers for coverage.

The only operators providing wireless access are small carriers, many of which can't afford equipment from suppliers such as Ericsson and Nokia Corp. and instead rely on cheaper network infrastructure from Huawei Technologies Co. and other Chinese companies.

President Trump's move last week to bar U.S. telecommunications networks from acquiring or using equipment from foreign suppliers left these small broadband companies under a cloud of uncertainty. If they can no longer rely on affordable foreign equipment to run their networks, will they run at all?

"Small carriers face a constant uphill battle both in terms of limited vendors who will supply to us ... compounded by the regulatory challenges we're up against," said John Nettles, president of Pine Belt Communications, a small telecommunications company in Alabama that relies on the Chinese company ZTE Corp. for its 4G network. "Sometimes it feels like the cards are really stacked against us."

Last week, the U.S. Commerce Department separately added Huawei and its affiliates to a list of firms considered a risk to national security, effectively preventing Huawei from buying parts from American companies.

Huawei immediately began to feel the effects of the administration's crackdown, with Google initially cutting off Huawei from many Android hardware and software services. (After the Commerce Department announced a 90-day buffer period, Google walked back, saying it would continue to work with Huawei in the meantime). U.S. companies such as Qualcomm Inc. and Intel Corp., which provide the Shenzhen telecommunications giant with crucial chips and other special parts, told employees they wouldn't supply Huawei until further notice.

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The move also left rural broadband companies that use Huawei equipment scrambling to figure out what it might mean for their day-to-day operations. Though small carriers don't export to Huawei, they often need to send technical drawings or data to Huawei in order to maintain their current network infrastructure.

The 90-day window announced by the Commerce Department on Monday allows companies that rely on Huawei equipment for crucial services to continue operations for now.

"In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks," Commerce Secretary Wilbur Ross said in a news release. Ross had indicated last week that his department was not looking to harm rural providers.

More pressing to the carriers is the executive order, which the administration will shape over the next five months.

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