CCA members look for answers amid U.S. crackdown on Huawei

Huawei
Huawei is a prominent vendor at the CCA show in Las Vegas this week. (Monica Alleven/Fierce Wireless)

LAS VEGAS—No one is really questioning the need for the U.S. to be vigilant when it comes to telecom security, but some rural operators that have deployed gear from Huawei are wondering what will happen as the FCC considers a proposal to ensure that Universal Service Fund (USF) money isn’t spent on equipment or services from suppliers that raise national security concerns.

The issue came up again this week when FCC Chairman Ajit Pai announced a proposal for a Notice of Proposed Rulemaking (NPRM) that will be on the April 17 open meeting agenda. The notice (PDF) would propose and seek comment on a rule that, going forward, would mean no universal service support could be used to purchase or obtain any equipment or services produced or provided by any company posing a national security threat to the integrity of communications networks or the communications supply chain.

That has put China’s Huawei directly in the crosshairs, as it’s the company most often pegged as one that could pose security concerns for the U.S. if it’s allowed to supply network equipment or even handsets to Tier 1 U.S. carriers. The Tier 2 and 3 carriers, however, have been a viable market in the U.S. for Huawei, and that’s a problem as it now looks as though the smaller carriers are going to get punished if continue to use Huawei gear and seek USF funds.

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Both Huawei and fellow Chinese vendor (but much smaller) ZTE are making a strong showing here at the Competitive Carriers Association (CCA) conference, where a lot of regional and smaller carriers are gathered. Carriers like T-Mobile receive USF funds, but too many questions are swirling around the NPRM to provide much in terms of answers this week.

There have been some rumblings among attendees about how much is due to security concerns and how much of it is about trade. Earlier this year, there was a proposal floated in Washington, D.C., that discussed a nationalized 5G network for the U.S. in part to compete with China. National security also was invoked when the president blocked Broadcom from pursuing an acquisition of Qualcomm.

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For the most part, Huawei has been a welcome vendor among the smaller operators. Tom Dowding, SVP of Sales, Huawei Technologies USA, gave a 6-minute presentation during a pitch competition here on Wednesday and received applause more than once after cracking jokes and laying out all that Huawei has done for rural areas in the U.S. (He declined to talk to FierceWirelessTech afterwards.)

Andi Reinhard, director of Technical Solutions for Wireless Infrastructure at ZTE, also gave a sales pitch about ZTE but there was no mention of national security.

CCA President and CEO Steve Berry told FierceWirelessTech earlier this week that the recent proposal at the FCC represents a major disruption in the supply chain.

“This is a huge impact on how the United States does business in the telecommunications world,” he said. “It’s not as easy as it looks.”

Carriers don’t want to be assisting or helping some hostile threat against the U.S., but the federal government needs to identify what the threat is and who the hostile actor(s) are, and take a scalpel to the problem instead of applying a meat ax, he said.

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Frank DiRico, president of Viaero Wireless, said his company turned to Huawei for a 3G GSM/UMTS system some years ago after its previous vendor couldn’t get 3G working; they ended up ripping out the old gear to install Huawei’s. Viaero covers parts of Colorado, Nebraska, Wyoming and Kansas—areas of rural America that otherwise probably would get little to no cellular coverage if not for the carrier.

DiRico said he was skeptical at first about Huawei but they arranged for a trial system and the vendor put the whole thing together in about eight months. Since then, “we’ve done about a thousand sites with Huawei and we love our network,” he said. “It works and it works well.”

Viaero has always put its switch behind other manufacturers’ firewalls. “We think it’s very secure,” DiRico said, adding that it’s had outside entities come in and do audits to ensure its safety, but it’s looking to see if there’s a higher level of certification it could get to put people at ease.

Viaero’s network now supports a lot of 4.5G features, including carrier aggregation, and it’s pretty much ready for 5G, although there are no 5G devices available today. Meanwhile, he and his team are closely watching what happens in Washington, D.C.

“I agree in a lot of aspects,” around security, as it’s very important and way overdue. “I think it needs to be more encompassing and I think they need to look at everybody, and all the equipment in the wireless space. If they want to focus on one or two Chinese vendors, there might be a false sense of security.”

Broadly speaking, the big wireless infrastructure supplied to U.S. operators is manufactured outside the United States. Nortel used to supply some from Canada, but its business was sold off to various entities. Nokia is based in Finland and Ericsson in Sweden.

Asked if pushing Huawei out of the Tier 2 and 3 markets in the U.S. would spell opportunity for Ericsson, a senior Ericsson network executive here was noncommittal.

“I think we need to see what happens,” said Kevin Zvokel, head of Networks at Ericsson North America. Right now, there's a lot of speculation. “Huawei is a very formidable competitor, and we aggressively go after all those carriers and all those business opportunities. We’re not sure what’s going to happen. We’ll see what happens.”

Ericsson does a lot of baseband and radio testing in Canada, and it has some 10,000 employees in the U.S. It doesn’t currently do any manufacturing in the U.S., but it does employ technical teams all over the world, including a security team in Finland.

“We’re very transparent with all of our operators and the U.S. government in how we develop our software and how we implement security checks within that software,” Zvokel said. “We spend millions and millions of dollars every year to make sure our code and our products are very secure.”