Rural America At Risk of Remaining Without Cell Service Following Huawei Ban. Would Government Help?

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At first glance, Trump's Huawei ban has little to do with rural America. However, a closer look gives us a different perspective. 

Rural cell service providers across the country are hugely dependent on the Chinese tech conglomerate, which delivers affordable wireless communications equipment.

As a result, the small telecom providers throughout the United States could now face billions of dollars in costs or even bankrupt after Donald Trump signed an executive order and banned Huawei citing national security concerns. 

The chances are that a vast majority of rural America may lose carriers. Why? When it comes to providing a wireless connection to sparsely populated, rural areas across the country, the majority of the American carriers mainly rely on the cheapest possible equipment. 

Jim Kail is one of the telecom entrepreneurs facing the limitations of the Huawei ban now. He owns the telecommunications company LHTC that spent almost five years to equip 1,000 users in the rural area of South Canaan, Pennsylvania, with high-speed fiber broadband. 

As the infrastructure investments in such areas are beyond the budget of small tech companies, Jim Kail purchased hardware by Huawei. Now, he is at risk of having to close his business. 

The same goes for SI Wireless, a rural Kentucky and Tennessee wireless provider with over 20,000 customers in the region. The company reported in an FCC filing that it should spend between $40 and $60 million to replace its Huawei equipment.

Another example is Viaero Wireless, a telecommunications company active in Colorado, Kansas, Nebraska, Wyoming, and South Dakota. According to its FCC filing, 80 percent of its significant technical equipment is purchased from Huawei. The replacement would cost $410 million, estimated the firm.

Union Wireless has 40,000 customers across Wyoming, Colorado, Utah, and Idaho. With 75 percent of its network equipment from Huawei, it would have to spend $300 million to comply.

Those are just a few examples to illustrate the issues the small telecom companies are experiencing following the Huawei ban.

In response, a bipartisan group of senators proposed legislation that would create a pool of $700 million to assist local telecommunication firms in replacing their Huawei technology. 

According to Carrie Bennet, the general counsel for the Rural Wireless Association, the proposed amount would not be enough. Bennet cited estimations according to which the local carriers would need between $800 million and $ 1 billion to replace their Huawei equipment.

What do you think? Do you believe that the government would consider that and increase the proposed budget?