As Wireless Carriers 'Rip and Replace' Chinese-Made Telecom Equipment, Who Pays? (sanjuandailystar.com) 82
"Deep in a pine forest in Wilcox County, Alabama, three workers dangled from the top of a 350-foot cellular tower," reports the New York Times. "They were there to rip out and replace Chinese equipment from the local wireless network..."
As the United States and China battle for geopolitical and technological primacy, 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 suppress China's rise, which include trade restrictions, a $52 billion package to bolster domestic semiconductor manufacturing against China and the divestiture of the video app TikTok from its Chinese owner. What the wireless carriers must do, under a program known as "rip and replace," has become the starkest physical manifestation of the tech Cold War between the two superpowers. The program, which took effect in 2020, mandates that American companies tear out telecom equipment made by the Chinese companies Huawei and ZTE. U.S. officials have warned that gear from those companies could be used by Beijing for espionage and to steal commercial secrets.
Instead, U.S. carriers have to use equipment from non-Chinese companies. The Federal Communications Commission, which oversees the program, would then reimburse the carriers from a pot of $1.9 billion intended to cover their costs. Similar rip-and-replace efforts are taking place elsewhere. In Europe, where Huawei products have been a key part of telecom networks, carriers in Belgium, Britain, Denmark, the Netherlands and Sweden have also been swapping out the 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 bigger story about the U.S. and China's decoupling, and that story will continue into the next decade with a global race for A.I. and other technologies," said Blair Levin, a former F.C.C. chief of staff and a fellow at the Brookings Institution.
But cleansing U.S. networks of Chinese tech has not been easy. The costs have already ballooned above $5 billion, according to the F.C.C., more than double what Congress appropriated for reimbursements. Many carriers also face long supply chain delays for new equipment. The program's burden has fallen disproportionately on smaller carriers, which relied more on the cheaper gear from the Chinese firms than large companies like AT&T and Verizon. Given rip-and-replace's difficulties, 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 providers. "For many rural communities, they are faced with the disastrous choice of having to continue to use insecure networks that are ripe for surveillance or having to cut off their services," said Geoffrey Starks, a Democratic commissioner at the F.C.C.
Last month, Senator Deb Fischer, a Republican of Nebraska, introduced a bill to close the gap in rip-and-replace funding for carriers... In January, the F.C.C. said it had received 126 applications seeking funding beyond what it could reimburse. Lawmakers had underestimated the costs of shredding Huawei and ZTE equipment, and new equipment and labor costs have risen. The F.C.C. said it could cover only about 40 percent of the expenses. Some wireless carriers immediately paused their replacement efforts. "Until we have assurance of total project funding, this project will continue to be delayed as we await the necessary funding required to build and pay for the new network equipment," United Wireless of Dodge City, Kansas, wrote in a regulatory filing to the F.C.C. in January.
Instead, U.S. carriers have to use equipment from non-Chinese companies. The Federal Communications Commission, which oversees the program, would then reimburse the carriers from a pot of $1.9 billion intended to cover their costs. Similar rip-and-replace efforts are taking place elsewhere. In Europe, where Huawei products have been a key part of telecom networks, carriers in Belgium, Britain, Denmark, the Netherlands and Sweden have also been swapping out the 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 bigger story about the U.S. and China's decoupling, and that story will continue into the next decade with a global race for A.I. and other technologies," said Blair Levin, a former F.C.C. chief of staff and a fellow at the Brookings Institution.
But cleansing U.S. networks of Chinese tech has not been easy. The costs have already ballooned above $5 billion, according to the F.C.C., more than double what Congress appropriated for reimbursements. Many carriers also face long supply chain delays for new equipment. The program's burden has fallen disproportionately on smaller carriers, which relied more on the cheaper gear from the Chinese firms than large companies like AT&T and Verizon. Given rip-and-replace's difficulties, 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 providers. "For many rural communities, they are faced with the disastrous choice of having to continue to use insecure networks that are ripe for surveillance or having to cut off their services," said Geoffrey Starks, a Democratic commissioner at the F.C.C.
Last month, Senator Deb Fischer, a Republican of Nebraska, introduced a bill to close the gap in rip-and-replace funding for carriers... In January, the F.C.C. said it had received 126 applications seeking funding beyond what it could reimburse. Lawmakers had underestimated the costs of shredding Huawei and ZTE equipment, and new equipment and labor costs have risen. The F.C.C. said it could cover only about 40 percent of the expenses. Some wireless carriers immediately paused their replacement efforts. "Until we have assurance of total project funding, this project will continue to be delayed as we await the necessary funding required to build and pay for the new network equipment," United Wireless of Dodge City, Kansas, wrote in a regulatory filing to the F.C.C. in January.
That's easy. (Score:5, Insightful)
Re:That's easy. (Score:5, Informative)
Who else could it be?
No matter what policy the government has regarding this program, taxes, or anything else and no matter how it is officially paid for, only individual people pay in the end.
If the companies pay, they raise prices and pass it on.
If the government pays, that's just our money already. They either raise taxes, print money which increases inflation (which reduces the value of income, savings, investment and pensions - a hidden tax), or reduce other services we already paid taxes for. We pay. There is no one else who available.
The question in the headline displays a sad and shocking ignorance of the very basics of how the economy works.
Re: That's easy. (Score:3)
In no fan of telecoms companies but in this case they installed equipment that seemingly met all requirements. They were then told they have to get rid of equipment made by Chinese companies. In this case they were screwed by the government and the government has offered some funding as compensation.
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Next time the government passes a law that cuts into my profit margin I get refunded too?
Now that would be a first.
Takings clause (Score:2)
If you can make a good argument that an unfunded mandate would constitute a "taking" pursuant to the Fifth Amendment [wikipedia.org], you very well might convince the Congress to reimburse you for its fair market value.
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It's more than that, they're being asked to replace high-tech Chinese stuff with so-so US-made stuff (China is waaaay ahead of the US in 5G gear) that costs much, much more and is readily backdoored by the NSA. So you get crappier gear that costs more and actually has the backdoors that the yellow-peril scaremongering claims is in the Chinese gear.
OTOH it's doing a great job of raising shareholder value for Qualcomm and others. So a few megacorporations like Qualcomm win and the NSA/USG wins, it's just a
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It doesn't HAVE to be American produced gear. Equipment from other large non-Chinese manufacturers can also be used (Ericsson, for example).
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On the other hand, the telecoms knew of security concerns and already heard talk of possible bans on Chinese hardware. They waved them aside without a thought and ran to the bargain bin anyway.
Re:That's easy. (Score:5, Interesting)
If the companies pay, they raise prices and pass it on.
There is no 'passing on' to customers in 99% of cases for issues affecting only a part of the companies involved.
They could only raise prices if their competitors did too, in reality they probably have to eat a lot of the cost themselves.
If you sell cucumbers and it turns out there is an issue with your greenhouse which means you have to replace it. You can say you will just 'pass along' the cost to your customers. However they will first point you to the existing contract you have for delivery at a certain price, and if that contract is not there they will just go to a different client.
If this is a market without competition (ie. a monopoly) they already put the price at the highest price that customers would accept (or at least the optimal price), and increasing prices further would just reduce the amount of sales you make.
Re:That's easy. (Score:4, Insightful)
Of course they pass it on. Their customers pay or their bottom line drops which makes their stock value go down which directly impacts the investments and retirement funds of normal people.
No matter how you want to figure it and move money around between columns on your spreadsheet, at the end of the day, the people *always* pay in one way or another.
Always. There is no one else who can pay and not somehow pass those costs on.
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I see they have been asking the government to cover the cost for them, i.e. out of taxation. They will try anything to avoid paying themselves.
The even bigger cost is that this is just plastering over the cracks. Instead of throwing everything we can at 6G so that this doesn't happen again, we seem to have decided we will just lag behind other countries with slow deployment, while whining that we have to pay patent royalties to Huawei.
Reminds me of F1 teams whose cars just aren't good enough. Instead of bui
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At the end of the line either consumers pay mo
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"As Wireless Carriers 'Rip and Replace' Chinese-Made Telecom Equipment, Who Pays?"
If you have to ask - it's you.
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Actually, it's the taxpayers since allegedly the government is reimbursing the companies for the replacement expense.
The "rub" is that not enough $$$ was initially earmarked for the program and it is now way over budget. Shocker....I know.
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The initial program was tax payers. Anything added to that program now is tax payers. It's always the tax payers.
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When it comes to telcos, it's always the customer that's paying for it, unless the telco has connived the local public service commission into paying for it, which is also ultimately both the customers and everyone who isn't even a customer paying for it. This is no different.
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The point of the Congressional funding is that every USD user pays.
SSI adjusts to CPI-U which is cooked by BLS, so an oldster who doesn't have a cell phone still pays 5c more for a jar of peanut butter while her monthly check stays fixed.
NSA should send her a personal thank-you note.
You will pay (Score:1)
Who else? This mindless "China bad!" panic will simply make all telecommunication more expensive for customers. Who else did you think would pay?
Re:You will pay (Score:4, Insightful)
It's not really that mindless though. Give the CCP credit for figuring out that if they got first-mover advantage on 5G infrastructure combined with a significant price advantage over foreign competitors, that they could get access to sensitive communications all around the world. And for awhile, it worked.
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How many concrete, proven cases of Chinese espionage via telecom hardware have been detected? Are the Chinese so skilled AND self-confident that they would deploy spyware in thousands of units to be deployed in adversary countries, who have full and unrestricted access to the actual hardware?
Because this looks a lot like a case of protectionism by fear-mongering. Leaving aside the whole PRISM thing.
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Nobody from the three-letter orgs are going to tell you that, and the CCP will of course deny everything. Unless you really believe a combination of crony capitalism and racism is behind this to the point that the EU turned on a dime and are now towing the same line as the United States when it comes to Chinese telecom gear.
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The absence of evidence does not automatically mean it must exist and they're hiding it, you're assuming guilt. Take a page from our own justice system, and respect our own values of innocence until proven guilty. Suspicion means further investigation is needed, it's not a verdict.
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Oh, yes, they would tell. Maybe not directly, but are you really going to claim that the anti-China fraction would not eat this up? If there were backdoors in Chinese telco equipment, we would have heard about them by now, with proof. But there is nothing. That means these backdoors are a pure fantasy creation.
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Why would you "have heard about the back doors by now with proof" unless you're in the intelligence community or have access to such intelligence directly through your government or corporate role?
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Because of the extreme PR gain that would represent? Instead they are currently operating with lies, fabrications and misdirection. Do you really think they would do that if there was any other option?
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They don't need a PR gain. Spilling the beans sufficient to satisfy completely unimportant people has zero value especially compared to the value of letting the other side know which of their backdoors has been found and how.
You seem to think your opinion matters to these people. It doesn't. As far as anyone here knows you are an absolute nobody just like the rest of us. The arrogance required to believe the NSA would feel the need to impress _you_ is astounding.
To;dr: you aren't important
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Why would you "have heard about the back doors by now with proof" unless you're in the intelligence community or have access to such intelligence directly through your government or corporate role?
Because if they had any actual evidence, they wouldn't need to make stuff up. [malwarebytes.com]
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Where are they towing the line to?
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The 3 letter agencies are willing to state which nation state is creating whatever malware is spreading and costing businesses millions or billions. Even providing code fragments, decompiling code and showing how they figured out which nation state's are probably behind it. Like the recent news about the Kremlin linked Turla group.
https://arstechnica.com/inform... [arstechnica.com]
They will not show similar evidence when they know which nation state is selling insecure by design hardware / code? Especially if they pr
Re: You will pay (Score:2)
Imagine handing the critical infrastructure - that can be remotely disabled - for your country to a foreign power. You would be up shit creek without a paddle if there were to ever be a conflict.
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Imagine handing the critical infrastructure - that can be remotely disabled - for your country to a foreign power. You would be up shit creek without a paddle if there were to ever be a conflict.
Indeed. That is why you should never, ever buy Cisco equipment or, come to think of it, depend on Microsoft Windows.
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There are lots of reasons not to use Cisco or Microsoft products. Add this to the list.
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Indeed.
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"Imagine handing the critical infrastructure - that can be remotely disabled - for your country to a foreign power. You would be up shit creek without a paddle if there were to ever be a conflict."
The last 40 years of US economics and foreign policy proves that US business does not give a single shit about that. Their sole object is gain.
I distinctly remember the debate and discussion on the radio regarding NAFTA way back when. It was pointed out that long supply chains were fragile, and a pandemic could di
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It is mindless and unfounded. The Chinese manufacturers of telco equipment are well aware that their stuff will get screened for backdoors and if found, their business will be dead. It is absolutely not surprising zero such backdoors have been found and documented in Chinese telco equipment so far and you can be sure that really competent people have looked.
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How do you know the NSA hasn't found backdoors?
Are you in the NSA?
Are you on the Senate Intelligence Committee?
Do you work security for a major telco?
I'm not any of those things; I don't know if there are backdoors, I don't know if any were found, I think it's quite likely there are but I wouldn't come on here and claim with such certainty that there are or are not.
If you're none of those things, you have no basis to make any determination either way, either.
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If the NSA had found backdoors, they would be use in the propaganda campaign against China. Seriously. Anything else is just in no way even remotely credible. Incidentally, there are enough private companies and even individuals that can do such an analysis and many of them are outside of the US. Finding and publishing something like that would be an extreme reputation booster for anybody that did it. Instead - nothing. At this time the only credible explanation is that there are no such backdoors. Seriousl
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They don't need a PR gain. Spilling the beans sufficient to satisfy completely unimportant people has zero value especially compared to the value of letting the other side know which of their backdoors has been found and how.
You seem to think your opinion matters to these people. It doesn't. As far as anyone here knows you are an absolute nobody just like the rest of us. The arrogance required to believe the NSA would feel the need to impress _you_ is astounding.
They already got China ripped out. They
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I think you are now just somehow trying to justify why I must be wrong. You are not convincing, your claims just get more and more outlandish. Plausibility works in the real world and so does learning from history. But apparently you have trouble with both.
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I'm not trying anything. You're wrong. You have zero counter examples so my word stands. That's how debate works after freshman year in college.
Have a nice day.
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It's only rational not to believe anything professional liars say without proof. Besides this equipment is everywhere, it's not just the NSA who has the skills to check for backdoors. If they exist it's highly likely the proof would have been on all the tech sites already.
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Which liars should I believe? The NSA or the Chinese?
Why are you good believing the Chinese who have a decades long track record of stealing IP and back dooming shit? The same Chinese who have declared they are going to take over the world?
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Indeed. My take is that the likes of CISCO give built-systems, documentation, support, etc. to the US TLAs to make for easy supply-chain attacks, while the Chinese manufacturers refuse to do that and hence this campaign. Which is essentially using the BIG LIE approach, because there are no actual facts. As can be nicely seen even here on /., a lot of people fall for that time-honored propaganda lying technique.
The BIG LIE approach was not actually pioneered by Hitler and Goebbels, but they documented and pe
Re: You will pay (Score:2)
Or maybe a group of capitalists sat together and tried to work out what they could sell to make money. They saw the 5g spec and realized the whole world was going to want this stuff real soon. They got their people to design it and their factories to produce it. It hit the market long before US industry had got into gear and was cheaper than US industry could ever manage.
The only way the US government could protect its industry against the more competitive Chinese was by spreading stories about 5g causing c
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Indeed. May not quite have been that deliberate or planned, but entirely plausible. Would also not be the first time things like this have happened. Ultimately those engaging in protectionism basically always lost throughout history and they will lose this time as well.
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...and now that the ruse has been figured out, China gets to sit back and watch the craziness unfold and the "common man" in all countries around the world (except China) lose a bit of their income to pay for it all.
Either way, China wins here - not maybe the way they originally planned it (or maybe it was), but they sold us stuff we can't get a refund for, now we've got to pay for it again. And you wait, we won't have learned a single thing when 6G comes out.
Sane Alternatives to Rip it Out (Score:3, Insightful)
Re:Sane Alternatives to Rip it Out (Score:4, Informative)
Not that I think the U.S. is necessarily pursuing a good policy, but to argue the U.S. should just do security audits is ridiculous. First off, there is a lot of Chinese equipment, enough to swamp U.S. gov. agencies even if they were staffed to do the audit, which they are not. You cannot hand it off to private business because they are too easily compromised by either the Chinese or doing sweetheart deals with American manufacturers to "find" issues.
And to think you are going to plow through mountains of firmware is silly...that's if you can even get the firmware and could somehow magically determine your received firmware is actually running. Once the vendor tools take over for VHDL or Verilog, what comes out the other end is not backwards traceable to the input. You cannot pull apart an ASICs chip very easily, and just to examine the entrails requires a scanning electron microscope, and then you only get a static view, not what it does when it is actually running.
The only sane way to police Chinese gear is running it in a sandbox, which is probably not going to fly given the type of gear it is. And even if it were, you won't be able to easily chase down covert channels that only emit naughty data periodically and that is probably randomly periodical.
Problems canceling each other out? (Score:1)
Obvious (Score:2)
The answer is a complete no-brainer:
We the people, we will pay for all the politicians to live in their mansions and play their stupid games.
Said the quiet part out loud (Score:1, Troll)
sweeping policies to suppress China's rise
Again, not really about China's human rights abuses or state-sponsored industrial espionage or network security.
It's to stop those dirty yellow Asians from raising their living standards.
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regardless, the other Asian countries are now fearful of a rising China that has the Breshnev Doctrine: what's mine is mine and what's yours is open to discussion.
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Open to discussion only in the sense of "when will yours be mine".
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Trying to befriend China through economic partnership has proven to be a failure. They are an economic and military adversary. To pretend otherwise is just stupid.
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But to say they are an economic and military ADVERSARY is just as stupid.
They are competitors. They are rivals. We are in a race. You do not win a race by holding other people back.
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hard proof that Huawei is warehousing US telco traffic wholesale on behalf of the CCP
That is a strawman argument, no one is making the claim. I dislike MAGA idiots as much as you. In 2023, supply chain attacks are a real issue. If the US was banning equipment from Russia, would you call us xenophobic?
We have evidence of the abuse of TikTok data. We have evidence of Chinese hacking on a massive scale. Is that because of the color of our skin in the melting-pot?
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Sure thing, have any links these Fox stories?
What about the endpoints? (Score:2)
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It's about general backdoor access to say, shut it all down to cause economic chaos, or confusion in the event of an attack. Not that China would be crazy enough to do more than the usual espionage, but the threat still has to be taken seriously.
It's not about the spying, because with a tiny percentage of the investment in existing equipment you could add some trusted monitoring devices and watch for that... and nobody really cares if the CCP knows who you follow on TikTok unless you're in a position of i
So this is why AT&T is finally upgrading? (Score:2)
...and here I thought it had something to do with Google entering the ISP space that induced them to actually update their infrastructure instead of continuing their grand tradition of never upgrading anything until government money has paid for it a few times over.
forced (Score:2)
From what I can tell, this equipment was initially installed under another program that required them to use the cheapest available. Turns out the cheapest was CCP equipment.
High-school level geopolitical drama (Score:2)
It's like a scorned lover ripping up and burning all the former beau's stuff. Mwah, take *that* China!!
Great Wall (Score:2)
We all remember how Trump made Mexico pay for the border wall, so why can't Biden make China pay for the telecommunication replacement?
What does Biden have to do with it anyway? (Score:2)
The summary's reference to Biden is confusing.
So this would be a Biden administration policy which took effect before Biden's administration took power?
Why not harden the grid while they are at it? (Score:1)