Huawei Ban Threatens Wireless Service in Rural Areas – Smart Media Magazine

Huawei Ban Threatens Wireless Service in Rural Areas

OPHEIM, Mont. — Kevin Nelson was recently in the middle of his 3,800-acre farm in northeast Montana, where the landscape stretches out like an ocean, when his tractor broke. He tried to find a cellular signal strong enough to send a photo of the broken part to a repair shop 65 miles away, but failed.

“It’s really frustrating,” Mr. Nelson, 47, said about the poor reception. “We keep being told it’s going to improve, it’s going to improve.”

Now it’s not likely to improve anytime soon.

Plans to upgrade the wireless service near Mr. Nelson’s farm halted abruptly this month when President Trump issued an executive order that banned the purchase of equipment from companies posing a national security threat. That includes gear from Huawei, the Chinese telecommunications giant, a major supplier of equipment to rural wireless companies.

The chief executive of the wireless provider in Mr. Nelson’s area said that without access to inexpensive Huawei products, his company could not afford to build a planned tower that would serve Mr. Nelson’s farm.

Joseph Franell, the chief executive of Eastern Oregon Telecom, a small carrier that relies on Huawei products, said he was being forced to rethink his business.

“The reason why we are able to serve our customers is because we are mindful of costs,” he said. “We don’t go out and buy a Lamborghini when you can buy a Ford pickup.”

While Huawei sells many types of technology, including smartphones, the vast majority of its revenue comes from sales of equipment that moves data through networks and to devices. Only a few other companies, like Nokia and Ericsson, both based in Europe, sell comparable gear.

American intelligence officials have accused Huawei of being an extension of the Chinese government, and say its equipment could be vulnerable to espionage and hacking. Mr. Trump also appears to be using Huawei as a bargaining chip in his escalating trade battle with China.

“Huawei is something that is very dangerous,” the president said on Thursday. “It’s possible that Huawei would be included in some kind of trade deal.”

Huawei denies that it is a security risk, saying it is an independent business that does not act on behalf of the Chinese government. It says 500 carriers in more than 170 nations use its technology.

“Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger,” Huawei said in a statement. “Instead, this will only serve to limit the U.S. to inferior yet more expensive alternatives.”

Much of Mr. Trump’s focus has been on the next generation of wireless technology, known as 5G. But Huawei already provides equipment to about a quarter of the country’s smallest wireless carriers. The Rural Wireless Association, a trade group that represents 55 small carriers, estimates that it would cost its members $800 million to $1 billion to replace equipment from Huawei and ZTE, China’s other maker of networking gear.

Nemont, based near Opheim, is one of those companies. Its footprint is 14,000 square miles, bigger than Maryland, and requires huge amounts of wires, towers and other costly infrastructure. But the company has only 11,000 paying customers.

The officials were vague about their concerns over Huawei, then a little-known firm. But Mike Kilgore, the chief executive of Nemont, said he had outlined Nemont’s plans to buy Huawei equipment in a letter to Senator Jon Tester, a Montana Democrat, and asked whether Mr. Tester had security concerns.

Mr. Kilgore said he was ready to go another route if Huawei’s equipment would put customers at risk. “I was begging for them to say, ‘No, don’t buy it,’” he said.

Mr. Tester’s office called him and said it didn’t see any major concerns with picking Huawei, Mr. Kilgore said. A spokesman for Mr. Tester said an aide had told Mr. Kilgore to contact the F.B.I. and other intelligence officials for advice.

After the call, Mr. Kilgore chose Huawei, which offered to customize its equipment and charge 20 to 30 percent less than competitors.

Nemont has since expanded its high-speed wireless network using almost all Huawei equipment. Mr. Kilgore even visited Huawei’s headquarters in Shenzhen. He is the president of the Rural Wireless Association, the trade group. Huawei has a representative on the group’s board without voting rights, one of two board members who don’t represent a wireless carrier.

“The other vendors hardly gave us the time of day, and now they have been acquired or are out of business,” Mr. Kilgore said. “We took a gamble, but we clearly made the right bet.”

The technological upgrade changed lives. Kevin Rasmussen was recently in the cab of his tractor using an iPad connected to high-speed internet beaming from a nearby cell tower. The connection worked with software on the iPad to help direct where the tractor poked holes in the soil and dropped seeds and fertilizer.

“I can sit up here in my tractor and do my banking, monitor six weather apps and read up on things like trade and Huawei, all on my phone,” Mr. Rasmussen said. “Rural America needs this so badly.”

Nemont had plans to extend that high-speed service. It had leased land in Opheim for a new cell tower that would have delivered a strong signal. That is the tower that would have improved the service on Mr. Nelson’s farm.

But the company tabled those plans after Mr. Trump’s executive order.

“We have no idea what we are going to be able to do,” Mr. Kilgore said. “I’m not getting sleep at night.”

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