Commissioner Starks Hosts Workshop on Challenges of 'Rip-and-Replace' Security Strategy

The telecom industry is eager to help mitigate national security threats stemming from equipment installed on its networks that could be compromised by vendors' ties to the Chinese government, executives said Thursday. Stakeholders wanted to reassure Commissioner Geoffrey Starks at an FCC workshop on his "find it, fix it, fund it" proposal to address vulnerabilities in communications networks (see 1906190050). But carriers, especially those with small, rural subscriber bases, said "rip-and-replace" missions for companies that have Huawei or ZTE equipment installed on their wireless, wireline or broadband networks would be neither quick nor inexpensive. Some estimates place the cost to remove and replace the compromised equipment at well over $1 billion.

Small carriers need more clarity from Congress, the FCC and other federal agencies so they can plan ahead, they said. It's still unclear how much funding the rural telecom providers could expect from the federal government to swap out equipment, the specific pieces of equipment they would need to replace, and how much time they would have to do it, they said. Experts suggested that determining the full scope of the problem will be critical in determining how much a swap would cost and how much Congress should be asked to dedicate to helping out rural providers. The FCC, in turn, may need help identifying which carriers have equipment that may be compromised, they said. "The commission should move quickly," said Dileep Srihari, the Telecommunications Industry Association's senior policy counsel. He also urged the FCC and Congress not to divert USF dollars to fund the national security equipment swap.

Panelists noted carriers that chose ZTE or Huawei equipment several years ago did nothing wrong and in some cases were trying to cut costs in order to win government funding to serve in high-cost rural areas. "Nothing they did was illegal," said Carri Bennet, Rural Wireless Association general counsel. Yet some carriers felt "a low and dark cloud of uncertainty" when the national security concerns surfaced, said John Nettles, president of Pine Belt Telephone in Alabama. He said without significant public assistance to replace any compromised network equipment, current rural customers would suffer, and smaller carriers like Pine Belt wouldn't be able to expand their businesses to serve new customers.

Concerns arose that carriers that self-identify as owning Huawei equipment may be accepting responsibility for a fix before they know what fix is required or how much they would be reimbursed. "What does this mean for a company if they raise their hands?" asked Mike Saperstein, USTelecom vice president-policy and advocacy. He said the clearer the government makes its policy decisions, the better, and carriers will need help narrowing down the type of equipment that poses the most risk to communications networks. "If everything is critical, then nothing is critical," he said. And it's not just the FCC that needs to be involved; Saperstein asked how the telecom industry should learn to interact with the U.S. intelligence community to help better secure its networks. "We don't know what they know to ask the right questions," he said. When determining policy to address network security threats from equipment vendors, he added, any action should be careful to avoid disruption of service to customers.

Since Huawei equipment typically is significantly less expensive than its counterparts from competing vendors, the cost to replace it may be higher than the original costs to install, and other manufacturers may need to help out rural carriers during this national security crisis, execs said. "It's time to re-engage," said Brian Hendricks, Nokia vice president-policy and government relations. "We'll take a look at what we can do on pricing." Hendricks said approaching Congress for funding for small carriers will be critical, and it will be important to have a clear estimate of costs the first time around, because getting a second pass "through the funhouse" would be unlikely if the numbers were wrong. Hendricks also urged flexibility in the way the rip-and-replace funding could be used. Rather than require carriers to replace like-for-like equipment, they should be allowed to use the funding on planned upgrades, he said. Bennet agreed: "If we're going to do this, let's think ahead to the future." Some suggested considering whether certain older equipment could be grandfathered and swapped out in its natural life cycle. Bennet said her members want to do the right thing: "They're not trying to hide."

Complexities of swapping out network equipment include protecting service for existing customers, panelists said. In cases of wireless networks, said Chris Reno, Union Telephone director of accounting, "we need to build a parallel network" for each network that has to swap equipment. In some cases, panelists said, that may require accessing additional wireless spectrum during a transition. And the time, cost and scope could vary from one transition to another due to the varying components in each network, said Alexi Maltas, Competitive Carriers Association senior vice president-general counsel.

Network vulnerability is expected to worsen as the country moves to 5G wireless service with a preponderance of connected IoT devices, said Nokia's Hendricks. He said it will be more important than ever to be able to trust equipment suppliers moving forward.

Huawei has told the FCC that banning network equipment vendors for national security reasons won't make the transition to 5G safer (see 1906130058). Bennet said Huawei is an RWA member company, and about 25 percent of member companies have installed Huawei equipment. She told us she believes the vendor likely would have addressed the workshop if invited by the FCC. She raised concerns on a workshop panel that Huawei or other manufacturers banned from selling their equipment in the U.S. might decide to no longer support its maintenance during the time it takes to achieve a network-wide equipment swap. Some suggested Huawei and ZTE should be enlisted to tell the government who has purchased their telecom equipment within the U.S. Nokia's Hendricks warned of blunt instruments in the telecom security space, noting ripple effects could cross the industry if China drops out of technical standards boards.