‘Rip and Replace’: The Tech Cold War Is Upending Wireless Carriers
Three workers deep in a pine forest in Wilcox County, Alabama It hung from the top of a 350-foot-tall cellular tower. They were there to pluck and replace Chinese equipment from the local wireless network.
Three hours after starting work, the team ran into a problem. Replacement gear from a European company was jamming the plane’s safety beacons. “We have a problem,” said the ground crew. “They say it’s blocking the beacons.”
The project was already months behind due to storms, equipment shipment delays and labor shortages. John Nettles, president of family-owned Pinebelt Cellular, who was standing at the base of the tower, said the new snuff discovered earlier this month would add at least two more days and run out of budget.
“People in Washington think it’s easy to replace equipment, but there are always unforeseen problems that always lead to more costs and delays,” he said.
As the United States and China battle for geopolitical and technological supremacy, the impact is reaching rural Alabama and small wireless operators in dozens of states.They launched trade restrictions, a $52 billion package to boost domestic semiconductor manufacturing against China, and Selling video app TikTok From its Chinese owner.
What wireless operators have to do under a program known as “Rip and Replace” has become the most obvious physical manifestation of the tech cold war between the two superpowers. The program, which took effect in 2020, requires U.S. companies to dismantle telecommunications equipment made by Chinese companies Huawei and ZTE. It warned that it could be used to steal trade secrets.
Instead, US carriers must use equipment from non-Chinese companies. The Federal Communications Commission, which oversees the program, will pay carriers out of his $1.9 billion pot to cover carrier costs.
Similar rip-and-replace efforts are taking place elsewhere. In Europe, where Huawei products have been a key part of telecom networks, operators in Belgium, the United Kingdom, Denmark, the Netherlands and Sweden are also switching to Chinese equipment due to security concerns, according to a tracking firm. Strand Consult says. telecommunications industry.
“Rip and replace is the first frontier in the larger story of the separation of the United States and China, and that story will continue into the next decade with the global race for AI and other technologies.” Brookings Study office staff and fellows.
But wiping out the US network of Chinese tech wasn’t easy. The cost is already over $5 billion for him. According to the FCC, more than double the amount Congress has allocated for refunds. Also, many carriers are facing delays in his chain of new equipment supplies.
The burden of this program has been disproportionately placed on smaller operators, who rely more on cheap equipment from Chinese firms than on big players such as AT&T and Verizon. Given the difficulty of rip-and-replace, some smaller wireless companies now say they may not be able to upgrade their networks to continue serving their communities.
FCC Democratic Commissioner Geoffrey Starks said:
Last month, Nebraska Republican Senator Deb Fisher said: submitted a bill Close the career rip and replace funding gap. With similar bills failing him twice in the past year and intense debate in Washington over government spending and the debt ceiling, it will be hard to pass. But “we have to follow up,” Fisher said. “Some of these carriers may go out of business.”
The scrutiny of Chinese telecom companies dates back more than a decade. 2012, parliamentary committee Publish a report on Huawei and ZTE It warned about the two companies’ ties to Beijing. In 2019, former President Donald J. Trump restricted U.S. companies from selling goods to Chinese companies, but the FCC prevented companies receiving federal subsidies from buying Huawei and ZTE equipment. prohibited. The agency last year expanded those restrictions to limit all imports from Chinese companies.
Rip-and-replace rolled out after Congress passed a law creating a refund initiative in January 2020. However, the program’s cost quickly skyrocketed.
in January, FCC said it received 126 applications I want more money than I can redeem. Lawmakers underestimate the cost of dismantling Huawei and ZTE equipment, driving up new equipment and labor costs. The FCC said it could only cover about 40% of the costs.
Some wireless carriers immediately paused their replacement efforts. United Wireless of Dodge City, Kansas, wrote in its regulatory filing: FCC in January.
Huawei declined to comment. ZTE did not respond to a request for comment.
In the Black Belt region of southern Alabama, known for its historic cotton plantations and paper mills, Pine Belt Cellular, one of the few wireless carriers serving 2,000 homes and businesses in five counties, has joined Rip and Replace. compliance has become a central initiative.
The company was founded in 1958 by James Nettles, a rural Arlington physician, who installed a phone line in a patient’s home so he could call him for a home visit.
After James Nettles’ son, John Nettles, entered the telephone business in 1988, the family branched out into wireless services with a federal grant. In 2011, John Nettles received an additional FCC grant to Pine to upgrade his Belt’s network to include broadband for high-speed Internet service.
Six equipment makers pitched him their gear, he said. Nettles chose his ZTE because the company offered the equipment at less than half the cost of other bids. Pine Belt initially bought his ZTE equipment, including hundreds of antennas, radios and other equipment for 67 cell towers, for $5 million.
The FCC “told me to find the cheapest equipment, but no one hesitated that ZTE was Chinese,” he said.
But since the restrictions on ZTE equipment were put in place, Nettles has spent most of his time replacing it with equipment from Western companies such as Nokia and Microsoft.
In a windowless cinder block building in downtown Selma, the central network hub of the Pine Belt, seven large metal bins were recently flooded with ZTE servers, processors and switches. There were also racks of new Nokia and Microsoft gear and Dell computers. The Chinese and Western tech will work together until Pinebelt can completely remove the ZTE equipment from the cell towers.
In 2021, Pine Belt filed with the FCC for a refund of $68 million. But last July, the agency said it could only reimburse up to $27 million in costs. Mr. Nettles said.
Earlier this month, Mr. Nettles drove 15 miles (about 15 miles) to a rusty 300-foot steel tower. They planned to equip the tower with ropes and pulleys and climb it to assess whether it could withstand the weight of his three additional antennas and Nokia radio equipment.
Workers decided that cement needed to be poured under the tower to create a stronger base for the additional load. To prevent service disruption, the tower must retain old ZTE and new Nokia equipment during the rip-and-replace operation.
As Mr. Nettles parked his car near the tower, a Selma customer called and complained that his cell phone service was out or intermittent. The customer was between one tower of his with ZTE equipment and another with his Nokia equipment.
“ZTE and Nokia equipment are not communicating well,” Nettles tried to explain. “I’m sorry for causing you trouble.”
Adam Sataliano Contributed a report from London.