A proposed U.S. national security ban on equipment from two Chinese telecommunications companies would leave dozens of small, rural cellular companies that rely on their cheap equipment without working cell towers and greatly reduced coverage.
That could leave thousands of rural residents with less access – if any at all – to 911 emergency services, allowing fires to rage and accident victims to agonize. In short, a proposed ban may address national security concerns, rural operators say, but at a cost of American lives and a retreat in service.
Small wireless providers, some of which are cooperatives or family-run businesses, say they would have to stop operating some cell towers and reduce coverage under the ban.
“Those people who can only get service from me. If that service goes away, then they get isolated again,” said John Nettles, president of family-owned Pine Belt Communications, a tiny cellular company that operates in five impoverished counties of west central Alabama.
The Federal Communications Commission has proposed a new rule that would block small, rural cellular companies from receiving federal subsidies if they purchase equipment from companies deemed a national security threat, including Huawei and ZTE, two Chinese telecom giants that U.S. legislators say are possible conduits for Chinese spying or cyberattacks.
FCC spokeswoman Tina Pelkey said keeping rural areas connected to the rest of the world and national security were not incompatible.
“We believe that it is possible to both close the digital divide and protect our networks against national security threats. For example, we believe that federal funds provided to companies for the purpose of closing the digital divide should not be used to construct networks that threaten our national security."
Rural providers who rely on Chinese-made equipment operate in sparsely populated areas largely ignored by the four dominant wireless carriers.
“We are officially in the middle of nowhere, meaning we are five hours away from a town of 50,000 or more people,” said Mike Kilgore, president of Sagebrush Cellular, a wireless provider that is part of Nemont Telephone based in Scobey, Montana. The surrounding Montana plains have only a little more than one person per square mile. When residents get injured, help is far off.
Right now, Kilgore said, his company operates 161 cell phone towers across some 17,000 square miles of sprawling territory.
If the proposed FCC ban goes into effect, Sagebrush would have to spend an estimated $57 million to replace its Huawei equipment, a crippling sum that Kilgore said would compel him to cut back to 55 cell phone towers, dropping coverage in 11,700 square miles, an area larger than the state of Maryland.
The chief executive of United TelCom, a wireless operator based in Dodge City, Kansas, predicts “devastating” consequences if the ban goes into effect.
“United TelCom would be forced to shut down significant portions of its network simply to remain operational,” Chief Executive Todd Houseman wrote to the FCC earlier this month.
Some of his customers have no landlines, only cellular service, Houseman wrote, and if coverage is lost, their inability to call first responders would “threaten the safety of life, health, and property in those locations.”
Many rural first responders are volunteers and rely on the networks of rural carriers, said Caressa D. Bennet, general counsel for the Rural Wireless Association, a trade group.
But it’s not only life-or-death situations that would be impacted.
“It could be, you know, I’m out on my tractor and I need to use my cell phone to call to say, 'Look, there’s a cow in distress and it needs help,’” Bennet said.
U.S. officials have for years been pressuring Huawei and ZTE.
Huawei, one of the top three smartphone makers in the world, was founded by a former engineer in the People’s Liberation Army and now employs more than 80,000 people. For its part, ZTE has grown into a giant in network services and telecommunications.
A bipartisan group of senators has pressed to curb sales by the two companies in the United States, citing intelligence concerns that have not been made public.
The administration of President Donald Trump in April banned U.S. companies from supplying components to ZTE, which authorities said had violated U.S. sanctions on doing business with Iran and North Korea. The Commerce Department later issued a $1 billion fine on ZTE, which forced the company to virtually cease operations. It granted a temporary reprieve July 2 until Aug. 1.
The lack of details over the alleged national security dangers does not sit well with the rural providers, who view themselves as conservative, patriotic and deeply tied to the regions where they serve.
“What it really touches on is the base that elected Trump,” Bennet said.
The founder of Pine Belt Communications was a physician distressed by the lack of telephone service around his home in Arlington, Alabama. Such areas were ignored by AT&T and its offshoots, which focused on population centers. So Dr. James “Buddy” Nettles hooked up a switchboard in 1958.
The company branched into cellular but remains small, with only 2,500 customers. It employs 45 people with a payroll of between $2.5 million and $3 million.
Nettles had served in the Philippines in World War II. His son, John Nettles, who later took over the company, also served six years in the Army. “My son is on active duty in the Army right now,” Nettles said. “I’ve got a good 10, 15 percent of my workforce are veterans. We’re certainly patriotic and believe we need to protect the American way of life.”
The company is installing a base station in Oak Hill, with a 2010 Census population of 26 people. Nettles said he doesn’t see how barring ZTE from selling him that base station and providing service to it “is going to do one darn thing to help national security.”
To replace the ZTE equipment the company installed in recent years would require between $6 million and $10 million, Nettles said, money the company does not have. A ban on doing further business with ZTE would push Pine Belt into possible insolvency.
“We’d just have to follow whatever shutdown path that would be logical,” he said.
It’s not just locals who would be affected. Any clients of companies like AT&T, Verizon or T-Mobile who travel through the region roam using its cell phone towers, including hunters.
“When deer season comes in around Thanksgiving, and turkey season ends sometime after Easter, there’s a large influx of people on Saturdays and Sundays coming for that purpose. They want to be able to call back home or reach 911 … Hunters do have accidents,” he said.
National security concerns involving cellular networks cut in a variety of ways in areas like Montana, home to many intercontinental ballistic missiles.
Sagebrush Cellular’s reach extends to 173 miles of the U.S.-Canadian border, and the U.S. Border Patrol maintains stations in Scobey and Plentywood. Some 75 officers patrol county dirt roads near the border and communicate on Sagebrush’s cellular network regardless of which carrier they contracted with for their own cell phones.
“Here’s where things get real interesting,” said Kilgore, the company’s chief. “If we’re forced to shut down a network that was lawfully built, when that Border Patrol agent using his Verizon phone is protecting our northern border, there’s a very good possibility he’ll be roaming on a Canadian carrier’s network.”
Likely as not, Kilgore said, “that Canadian network is also made of Huawei equipment.”