TR Daily Huawei, Rural Providers Call for Network Monitoring
Monday, July 22, 2019

Huawei, Rural Providers Call for Network Monitoring

INDIANAPOLIS — Legal counsel for Huawei Technologies Co. Ltd. today said the government should focus on monitoring all telecommunications equipment and networks instead of outright banning equipment manufactured by Huawei and other Chinese companies.

The issue of Huawei telecommunications equipment and the impact banning such equipment would have on rural networks in the U.S. was the topic of discussion today at the National Association of Regulatory Utility Commissioners’ summer policy summit being held here this week. Equipment provided by Huawei is lower cost than other manufacturers and is specifically geared toward rural providers, panelists said. And being forced to “rip and replace” could cost more than $1.2 billion, according to the panel.

Huawei’s legal counsel, Andrew Lipman of Morgan, Lewis & Bockius LLP, said singling out Huawei for this treatment “will only impair rural customers.” The situation, he said, is unfortunate for rural local exchange carriers which have relied on Huawei equipment that is priced at least 15% less than other manufacturers and made specifically for rural providers. Huawei argues that all equipment should be subject to rigorous testing and that testing should be paid for by the equipment manufacturers themselves, Mr. Lipman said.

“Even though Huawei is a private company, [the administration] seems to think they are under the influence of the Chinese government. Many experts have testified that the Chinese government can’t force Huawei to turn over any information,” Mr. Lipman said.

Mr. Lipman said Huawei had been operating in the U.S. for about 20 years, during which time the government and the FCC had “recognized the global nature of supply chains and have advocated for a holistic approach to cybersecurity.” Beginning in 2011, concerns about Huawei’s relationship with the Chinese government began to materialize, and the current administration has “taken a harsh view of China,” he said.

“Clearly we are seeing the administration’s views on Chinese telecom become part of the trade discussions,” Mr. Lipman said. “Huawei would say that they are collateral damage in these trade talks.”

Recent actions include an executive order from President Trump and possible action by the FCC that would ban recipients of universal service funding to purchase telecom equipment from Huawei and other companies that are thought to be controlled by an adversarial government.

“We feel that the FCC is not the right agency to make these decisions,” Mr. Lipman said. “We feel that the proposal is arbitrary and capricious and is overbroad since it covers all telecom equipment, especially considering that almost all equipment is made in China.” He added that there were “better ways and more rational ways” to protect the security of networks.

President Trump on May 15 signed an executive order authorizing the Commerce Department to block transactions that may involve a national security risk. Although the executive order didn’t name Huawei, the Commerce Department added Huawei China to the “Entity List,” which makes the company subject to specific license requirements before it can buy components from U.S. companies.

Providing the perspective of rural providers that are affected by those decisions, Carri Bennet, general counsel for the Rural Wireless Association, said small rural wireless carriers purchased equipment from Huawei, as well as ZTE, “with the full knowledge of the FCC,” and after consulting with certain members of Congress, as they built out their 3G networks and later LTE networks.

Rural carriers “have gotten caught up in the trade war with China,” according to Ms. Bennet.

Replacing the equipment, she said, is a long process. “It’s not something where you can go and replace this equipment overnight. Our members estimate that it could take four to 10 years,” Ms. Bennet said.

As an alternative to replacing the equipment, which is estimated to cost between $800 million and $1.2 billion just for companies that are members of the Rural Wireless Association, Ms. Bennet suggested deploying some sort of monitoring.

“If this is truly a national security issue, we need ongoing monitoring,” Ms. Bennet said. “Monitoring should be deployed by every network regardless of where your equipment comes from. Our members are patriots. If we’re shown problems, we will rip it out and replace it. We just haven’t been shown these problems.”

Wireless Internet Service Providers Association President and Chief Executive Officer Claude Aiken agreed that national security was the top priority.

“Absolutely, national security is the top priority,” he said. “Because our members have been building significantly and more recently, they have less Huawei or ZTE equipment installed, but the executive order sets up a regime for uncertainty. There are a number of equipment manufactures that are Chinese or make their equipment in China. And that’s a universe that is far larger than the Huawei or ZTE discussion.”

He continued, “We want to make sure that we’re capturing the entirety of the scenario. … The current regime does inject a lot of uncertainty into the business planning.”

Mr. Lipman agreed that monitoring networks was a more reasonable approach.

Huawei continues to sell equipment in the U.K., which is a long standing ally of the U.S., Mr. Lipman said. He said the U.K. used laboratories staffed by government employees to test equipment for any vulnerabilities. That service is paid for by the equipment manufacturers. He suggested that a similar model be adopted in the U.S. and be applied to all equipment manufacturers. The cost for such monitoring is “nowhere near the cost to rip and replace,” he added.

David Bergmann, assistant consumers’ counsel for the Office of the Ohio Consumers’ Counsel, said that although this was a “political issue,” for consumers it was not a red or blue issue. It’s an issue of national security, which is important to many if not all consumers, he said.

“There’s a lot here that we don’t know yet,” he said. “And there’s action going on without really much factual basis. And both of those things need to be resolved.” —Carrie DeLeon, [email protected]

MainStory: Cybersecurity FCC FederalNews

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