The Rural Wireless Association (“RWA”) applauds the report released today by CoBank acknowledging the high cost of replacing Huawei and ZTE wireless network equipment in rural carriers’ networks. CoBank’s figures are more in line with the estimated network replacement costs that RWA has previously expressed to the FCC in the National Security Rulemaking proceeding. CoBank estimates that the actual costs to rural carriers of removing Huawei and ZTE equipment are likely to exceed $1 billion. Congress recently introduced a bill that would provide only up to $700 million in funding to assist rural carriers. However, this proposed funding is not enough, and it is imperative that the correct amount of funding is made available should the ban take effect.

Additionally, many rural carriers will have to switch to different equipment providers that are quoting prices 30 to 40 percent higher than what Huawei has previously offered. According to Jeff Johnston, lead economist for the communications sector at CoBank, “If U.S. carriers are required to replace Huawei gear, the government needs to increase its proposed support mechanism to avoid putting rural operators in dire straits.” “A too quickly implemented system-wide replacement of network technology could result in network outages and other operational issues, which is why, in the interim, having a robust monitoring process in place, may be a more cost-effective solution. Such monitoring processes would also serve to handle the immediate concerns surrounding security,” stated Carri Bennet, RWA’s General Counsel.