As the Federal Communications Commission considers restricting agency funding from companies deemed potential security risks, some of the nation’s smaller operators reportedly worry the move could jeopardize an already tenuous business model in rural areas.
FCC Chairman Ajit Pai announced last week that commissioners would vote later this month on changes to the Universal Service Fund rules — a measure generally viewed as a shot at Huawei and ZTE, two Chinese smartphone makers with ambitions in the lucrative U.S. wireless market.
The recent controversy surrounding those companies centered on the implications of companies with ties to Beijing gaining access to Americans’ everyday devices, but Huawei is also a top maker of wireless equipment.
The Wall Street Journal reports although top U.S. carriers can use Western companies for their equipment needs, smaller operators — including those that use USF funding to help reach underserved communities — have turned to Huawei equipment to due to a number of factors, from lower prices to better customer service to a full-court press from Huawei executives.
Critics also suggested that cutting Huawei out of the U.S. equipment market could leave those operators without customer or technical support for their current equipment.
“Our margins are pretty thin,” Eastern Oregon Telecom CEO Joe Franell, whose company deployed Huawei hardware on its recently acquired cable lines, told the paper. “If you start dictating what kind of equipment I can use, it tips the scales.”
Pai, however, argued the FCC should play a role in helping to ensure the security of U.S. communications networks.
He said vulnerabilities in routers, switches and other equipment could enable “hostile governments to inject viruses, launch denial-of-service attacks, steal data and more.”
T-Mobile officials, meanwhile, expressed a different view at last week’s CCA Mobile Carriers show. The carrier, which receives USF dollars and offers ZTE phones, said that equipment poses more of a concern than individual smartphones from a national security perspective.
“We don’t think there’s a security threat that they pose,” Steve Sharkey, T-Mobile’s Government Affairs VP for technology and engineering policy, said on the company’s ZTE devices during a panel discussion.
Filed Under: Industry regulations
