(NBC NEWS) – The Trump administration’s ban on goods produced by a Chinese tech giant would seem to have little to do with rural America. But rural cell service providers across the U.S. are almost entirely dependent on the company, Huawei, which produces inexpensive wireless communications equipment.
These small telecom companies now face billions of dollars in costs or the end of their businesses entirely after the Trump administration effectively banned the Chinese company last week over spying accusations.
It is a prospect that could leave vast swaths of rural America with no cell service.
In response, a bipartisan group of senators proposed legislation that would create a pool of $700 million to help local carriers replace their technology.
This legislation “offers relief to those providers that need to replace foreign equipment within their networks while augmenting the availability of secure 5G networks for all Americans,” said Sen. Roger Wicker, R-Miss.
The problem is that $700 million is not nearly enough cash.
“We estimated that we needed $800 million to $1 billion for our carriers, but that only covers about a dozen companies,” Carrie Bennet, general counsel for the Rural Wireless Association, told NBC News.
“I don’t want to insult the bill they’ve introduced,” she added. “It’s great that someone has focused on what this is going to cost, but this is not enough money.”
High price of rural wireless
The Huawei ban will force many wireless providers to turn to expensive European technology, as there are few American alternatives. Companies will have to rip out and replace everything they have already installed and hire highly-trained professionals to work on and install their network hardware.
That doesn’t come cheap.
SI Wireless, a rural Kentucky and Tennessee provider with about 20,000 customers, would have to spend $40 to $60 million replacing its Huawei equipment, the company said in a FCC filing.