The Competitive Carriers Association (CCA) has been sounding an alarm for months about the funding shortfall for wireless carriers to rip and replace their Huawei and ZTE equipment. But is Congress listening?
Congress has allocated $1.9 billion to the Secure and Trusted Networks Act Reimbursement Program for service providers to replace untrusted telecom equipment from their networks. In July, the FCC said it had received valid applications for $4.98 billion in reimbursements, resulting in a $3.08 billion shortfall. The FCC said that absent any additional appropriation, it would apply a pro-ratio scheme specified by Congress and begin paying the initial reimbursements at only 39.5% of the total amounts.
Tim Donovan, SVP of legislative affairs at the CCA, said the worst-case scenario is that some smaller carriers that can’t afford to fund the full cost of replacing their Chinese gear may either go out of business or their wireless technology could become so outdated that it ceases to work properly. In either case, there could be rural areas in the U.S. where there is no wireless coverage. He said the big carriers often roam on local carriers in remote locations. So even customers who have service with one of the big 3 carriers could potentially come across black-out areas. This would be especially concerning for emergency calls.
In September, a bipartisan group of more than 30 senators sent a letter to senate leadership, emphasizing the urgency of allocating more funds for the program.
But Congress hasn’t acted yet. And it’s had a very busy calendar this year, so it’s not clear whether it will address the issue before year-end.
Donovan said smaller operators are being squeezed on another related front, too. Currently, they are prohibited from servicing or upgrading their networks with Universal Service Funds if they still have Huawei and ZTE equipment.
But they need to upgrade their networks, especially in light of T-Mobile’s shutdown of its CDMA network this year and Verizon’s plan to shutter its CDMA network by year-end.
Smaller operators use roaming agreements with the big 3 wireless carriers so that their subscribers have service when out of their footprint. Many smaller carriers are still using CDMA for voice service. But in January, none of the big three will have a CDMA network for voice calls. So, the smaller operators need to update their own networks to Voice over LTE. However, the uncertainty and lack of full funding for Huawei rip and replace is putting them in a tough spot.
If all these factors weren’t pressure enough, applicants for rip-and-replace funds have only until July 2023 to submit their first reimbursement requests. And then they have one more year to complete their projects.
There’s at least one small wireless carrier that’s moving forward with its network upgrade plans.
Montana-based Triangle Communications is undergoing a full network transformation, working with the vendor Mavenir.
Triangle Communications CEO Craig Gates told Fierce that of course, they’d like to have full funding for the project and they’re watching what happens in Washington, D.C. But he felt the company couldn’t wait any longer to make the upgrades.