Deep in a pine forest in Wilcox County, Ala., three workers dangle from the top of a 350-foot cellular tower. They went there to remove and replace Chinese equipment from the local wireless network.
Three hours into the job, the team ran into an impasse. Replacement gear from a European company was obstructing the safety beacon for the airplanes. “We have a problem,” said a crew member on the ground. “They say it’s blocking the beacon.”
The project had already been delayed for months due to storms, slow transportation of equipment, and labor shortages. The new snafu, discovered earlier this month, will add at least two more days and blow the budget, said John Nettles, president of the family-owned Pine Belt Cellular that stands at the base of the tower.
“People in Washington think it’s easy to swap out equipment, but there are always problems you didn’t expect, always overruns and always delays,” he said.
As the United States and China battle for geopolitical and technological supremacy, the fallout has reached rural Alabama and small wireless carriers in dozens of states. They are on the receiving end of the Biden administration’s sweeping policies to quell China’s rise, including trade sanctions, a $52 billion package to boost domestic semiconductor manufacturing against China and the divestment of video app TikTok from its Chinese owner. .
What wireless carriers must do under a program called “rip and replace” has become the most starkly physical manifestation of the technological Cold War between the two superpowers. The program, which went into effect in 2020, mandates that US companies tear down telecommunications equipment made by Chinese companies Huawei and ZTE. US officials have warned that equipment from those companies could be used by Beijing for espionage and to steal commercial secrets.
Instead, US carriers would have to use equipment from non-Chinese companies. The Federal Communications Commission, which oversees the program, will then reimburse the carriers from a $1.9 billion pot intended to cover their costs.
Similar rip-off attempts are happening elsewhere. In Europe, where Huawei products have been an important part of telecommunications networks, carriers in Belgium, Britain, Denmark, the Netherlands and Sweden are also swapping out Chinese equipment because of security concerns, according to Strand Consult, a research firm that Tracks the Telecom Industry.
“Rip-and-replace was the first front in a larger story about the separation of the US and China, and that story will continue for the next decade with the global race for AI and other technologies,” said Blair Levin, a former FCC chief. Said. staff and a fellow at the Brookings Institution.
But cleaning American networks of Chinese technology has not been easy. According to the FCC, the cost has already exceeded $5 billion, more than double the amount Congress has appropriated for reimbursement. Many carriers also face long supply chain delays for new equipment.
The program’s burden has fallen disproportionately on smaller carriers, which were more reliant on cheap gear from Chinese firms than on larger companies like AT&T and Verizon. Given the difficulties of rip-and-replace, some smaller wireless companies now say they may not be able to upgrade their networks and continue serving their communities, where they are often the only Internet provider.
“For many rural communities, they face the devastating choice of continuing to use unsecured networks that are ripe for surveillance or having their services cut,” said Geoffrey Starks, the Democratic commissioner at the FCC.
Last month, Senator Deb Fischer, a Republican from Nebraska, introduced a bill to close the gap in rip-and-replace funding for carriers. Passing it will be challenging, with similar legislation failing twice in the past year and fierce debate in Washington over government spending and debt limits. But “we’ll have to follow up,” Ms. Fischer said. “Some of these carriers may go out of business.”
The investigation of Chinese telecom companies is more than a decade old. In 2012, a congressional committee issued a report on Huawei and ZTE warning about the companies’ ties with Beijing. In 2019, former President Donald J. Trump banned US companies from selling goods to Chinese firms, while the FCC banned companies that receive federal subsidies from buying Huawei and ZTE equipment. The agency expanded those restrictions last year to limit all imports from Chinese companies.
The rip-and-replace followed Congress passing a law in January 2020 to attempt reimbursement. But the cost of the program quickly escalated.
In January, the FCC said it had received 126 applications seeking funds in excess of reimbursement. Lawmakers had underestimated the cost of shredding Huawei and ZTE equipment, and new equipment and labor costs have risen. The FCC said it could only cover about 40 percent of the cost.
Some wireless carriers immediately halted their replacement efforts. United Wireless of Dodge City, Kan., wrote in a regulatory filing, “Until we have assurance of total project funding, this project will continue to be delayed as we look for the funds needed to build and pay for the new network equipment.” are waiting.” 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, rip-and-replace compliance has been a central initiative at Pine Belt Cellular, which serves some 2,000 homes and businesses in five countries. One of the wireless carriers.
The company was founded in 1958 by James Nettles, a country doctor in Arlington, who installed phone lines in patients’ homes so they could call him for home visits.
After James Nettles’ son, John Nettles, joined the phone business in 1988, the family expanded into wireless service with a federal grant. In 2011, John Nettles secured additional FCC subsidies and upgraded Pine Belt’s network to include broadband for fast Internet service.
He said six equipment manufacturers gave him their gear. Mr. Nettles chose ZTE because the company offered equipment at less than half the cost of the other bids. Pine Belt initially purchased $5 million in ZTE equipment, including hundreds of antennas, radios and other gear for its 67 cell towers.
The FCC “asked me to find the cheapest device, and nobody thought twice about ZTE being Chinese,” he said.
But since the ZTE Gear was banned, Mr Nettles has spent much of his time trying to replace it with devices from Western companies such as Nokia and Microsoft.
At Pine Belt’s Central Networking Hub, a windowless cinder block building in downtown Selma, seven large metal boxes recently overflowed with ZTE servers, processors and switches, the gear that moves Internet traffic around and connects calls. does. There were also racks of new Nokia and Microsoft equipment and Dell computers. Chinese and Western-made technology will work together until the Pine Belt completely rids its cell towers of ZTE equipment.
In 2021, Pine Belt applied for a $68 million reimbursement from the FCC for the replacement effort. But last July, the agency said it could only refund up to $27 million of the cost. Mr. Nettles said Pine Belt is about 15 percent along in its transition away from Chinese equipment and is already $5 million over the FCC’s budget.
Earlier this month, Mr. Nettles drove 15 miles to a 300-foot rusting tower where two workers were preparing to dismantle the Chinese equipment. With ropes and a winch, they planned to climb the tower to assess whether it could hold the weight of Nokia’s additional three antennas and radio equipment.
The workers decided that they would have to pour cement under the tower to create a stronger base for the additional weight. The tower will have to house the old ZTE and new Nokia equipment during the rip-and-replace work, so that there is no interruption in service.
As Mr. Nettles parked near the tower, a customer in Selma called to complain that his cell service was cutting out in and out. The customer was between one tower with ZTE equipment and another tower with Nokia equipment.
“The ZTE and Nokia devices are not communicating well with each other,” Mr. Nettles tried to explain. “Sorry for the inconvenience.”
Adam Satriano contributed reporting from London.