The Competitive Carriers Association (CCA) has been lobbying for more than a year for Congress to fully fund the government’s program requiring that operators rip out gear from Chinese vendors Huawei and ZTE and replace it with trusted network equipment.
On Monday, the organization called out the FCC’s July 17, 2023, “dark deadline” by which Secure and Trusted Communications Networks Reimbursement Project, aka “Rip and Replace,” participants must submit a reimbursement request that, upon payment, triggers the statutory one-year deadline for project completion.
Although one year doesn’t sound like a lot of time given that some of these networks were built over multiple years, the operators face a bigger problem: There’s not enough money to complete these projects. The entire fund is short over $3 billion.
CCA President and CEO Tim Donovan said that absent full funding, networks in many rural and sensitive parts of the U.S. are at ever-increasing risk of going dark. “Impacted carriers must make decisions to ‘rip’ but not ‘replace,’ including in areas where no other carrier provides service. This dire situation ignores our country’s national security and the connectivity of millions of Americans,” he said in a statement.
Asked about the possibility of the getting an extension, he said that’s not much help. “Additional time, without additional funding, doesn’t really help the way that we need it to,” he told Fierce.
Various bipartisan legislation has been considered, but so far, nothing’s passed.
“I’m optimistic that it is a matter of when, not if, this will be funded,” he said, noting proposals to fund it through using unspent money that was allocated for Covid relief and separately, using a combination of reinstating the FCC’s auction authority with funding for rip and replace.
“We’re appreciative of really strong bipartisan support. Everybody wants to get this done,” Donovan said, but the longer it goes on, the worse it gets.
Most CCA members are not affected because they never used Huawei or ZTE equipment, but about a dozen of them are eager to get the funding problem resolved.
One of those is Alabama-based Pine Belt Communications, a family-owned business that’s comprised of wireline and wireless divisions. In wireless, Pine Belt offers 4G LTE voice and data and serves about 2,000 wireless customers in five counties.
The company is about one-third of the way through the rip and replace process. John Nettles, president of Pine Belt, said about two-thirds of his network is still ZTE. Based on a back-of-a-napkin calculation, he figures his company will need another $10 million to $12 million beyond what it’s already committed.
Why ZTE? Lowest price at the time
Pine Belt participated in the FCC’s Mobility Fund Phase 1, which occurred in the 2012 timeframe. That’s when his company decided to use ZTE for its entire wireless network.
Pine Belt took bids from five or six manufacturers, and ZTE was “by far, the least expensive,” Nettles said. At the time, using ZTE wasn’t a problem; a few years later, he was told it had to go for national security reasons.
Ultimately, Pine Belt chose Finland’s Nokia to supply the equipment to replace Shenzhen-based ZTE. The replacement occurs on a site-by-site basis, and aside from a very short time the two are working simultaneously, as soon as a ZTE site gets turned off, the Nokia site comes on line, he said.
The company uses 800 and 1900 MHz spectrum bands and where available, 600 MHz. Because it only has a limited amount of spectrum at its disposal, it’s limited in terns of how flexible it can be operating two networks side by side.
Most, but not all, of the old and new sites are LTE. Pine Belt has about 100 customers still carrying CDMA phones. As a smaller operator, “we don’t always have access to the latest handsets” in the development cycle, and these are customers who refuse to give up their flip phones. “That’s a whole other discussion in and of itself,” he noted.
Under the rip and replace rules, Pine Belt is replacing the ZTE equipment using LTE with LTE/5G ready gear from Nokia as opposed to going straight to an all-5G network.
Possibly no signal for some
Nettles said he’s already identified sites that are turn-down candidates if the federal rip and replace funding doesn’t come through. If that happens, signals will not be available for some customers, and they won’t necessarily have anywhere else to go for service, he said. These are sparsely populated areas where it’s hard to find another communications provider.
Nettles spoke to Fierce while on his way to a NARUC conference in Austin, Texas, where he’s scheduled to speak today on the topic of rip and replace alongside representatives with SI Wireless and CTIA.
As of a public filing in April, SI Wireless had sought $16 million in rip and replace reimbursement funds and received only about $363,000. Pine Belt so far has received approval for about $400,000.
“There’s a lot of entities – service provides, equipment providers and carriers that are operating on faith the government will come through,” Nettles said.