FCC outs telecoms with banned Chinese 5G hardware

The Federal Communications Commission has identified 51 U.S. mobile carriers that still have Huawei and ZTE 5G gear in their networks despite a government policy that bans that equipment from US service-provider networks.

Verizon, CenturyLink (which plans to rebrand as Lumen), and Cincinnati Bell are among the most prominent names on the list, and most of the others are small regional providers

The FCC said that the cost of replacing the China-built equipment at all of the companies on the list could top $1.8 billion.

More than $1.6 billion of that would be eligible for reimbursement from the commission’s Universal Service Fund under provisions of a 2019 law that bans the purchase of potentially suspect networking equipment. The fund is designed to defray the cost of providing communications services to low-income households and those in high-cost areas.

Under the Secure and Trusted Communications Networks Act, carriers must provide detailed plans for removing all banned equipment within a year of applying for reimbursement.

“By identifying the presence of insecure equipment and services in our networks, we can now work to ensure that these networks—especially those of small and rural carriers—rely on infrastructure from trusted vendors,” said FCC commissioner Ajit Pai in a statement.

The FCC’s report on the matter doesn’t really give the full story, however. The extent to which each company on the list is using prohibited equipment isn’t clear, despite the 2019’s apparent requirement of detailed progress updates from the companies involved.

While the chances of prohibited networking equipment being used be telcos has a chance of affecting its enterprise customers, the risk is probably minimal, according to Joe Bonner, a senior analyst at Argus Research.

“I frankly don’t think it’s much of a worry, but again, you can’t really tell,” he said. “Even if, say, Verizon had a lot of it, the idea that that would cause a security concern for an enterprise customer is a long shot.”

Similarly, the nature of the replacement process for prohibited equipment – a “rip and replace,” according to Bonner – poses a small but non-zero risk of service disruptions for enterprise customers.

“That’s not what they want to happen, but when you upgrade networks, unfortunately, sometimes Murphy’s Law prevails,” he said.

The effects of the Huawei and ZTE ban are still being felt throughout the US telecom ecosystem, causing a potential slowdown of 5G deployments, as other equipment makers move to fill the void.

It’s too soon to tell which of the Nokias or Ericssons of the world has an edge, and despite loud proclamations by the carriers of nationwide 5G coverage, that particular wave of new deployments is still in its infancy.