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The U.S. Government’s latest move to blacklist Huawei has forced the Chinese telecom giant’s business partners in the U.S. to brace for mounting uncertainty.
Among them is LHTC Broadband， a telecom company focused on the rural area of the U.S. state of Pennsylvania. It offers telephone， TV and Internet services to 7，000 rural locations， 1，600 of which are served by Huawei equipment.
What has perplexed LHTC CEO James Kail is that he has never seen a security threat issue with Huawei equipment， not only in the past few months of heated accusations by the U.S. Government， but also throughout the last five years of partnership with the Chinese company.
On May 15， U.S. President Donald Trump declared a “national emergency” over what he called threats to U.S. technologies. The U.S. Department of Commerce on the same day put Huawei and its affiliates on a blacklist， meaning the sale and transfer of U.S. technologies to Huawei must be approved by the Federal Government.
“We haven’t had any issue with the equipment itself， and on top of that， the pricing was very competitive，” Kail told Xinhua， recalling that it was a prudent business decision for LHTC to choose Huawei as a supplier five years ago.
As of the end of 2018， 90 percent of LHTC’s fiber-deploying project using Huawei solutions had been completed， and the remaining 10 percent is expected to be finished by 2020.
“It’s been five years and we still haven’t seen any proof [of security threats]，” Kail said.
That said， the ban could deal a severe blow to LHTC， which has only 65 employees. To take out all the Huawei equipment will obviously be a significant hardship for a small company like ours， Kail said.
According to Kail’s estimates， it will take LHTC about a year to completely replace the existing Huawei equipment if the company focuses solely on that task at an expected cost of $400，000-$500，000 in total.
Apart from the replacement cost， what also concerns Kail is a sudden potential suspension of Huawei’s technical support once the restriction kicks in.
The Department of Commerce has granted a 90-day window for U.S. mobile phone companies and broadband providers tied to Huawei “to make other arrangements.”
“If we aren’t able to have technical support for upgrades because Huawei is shut off， that will be another problem，” Kail said. He added that LHTC is closely monitoring the situation because of its investment in Huawei and “the potential significant impact on our company.” Noting that it has been a good partnership over the last five years， Kail said Huawei has been “very responsive” when problems arose. In South Canaan， about 1，000 residents are using LHTC services supported solely by Huawei equipment.
Bonnie Bond， a network supervisor with LHTC， said she is “very concerned” that once Huawei is banned， her customers will not be able to watch TV or surf the Internet.
Kail said LHTC is one of the first small telecom companies in the rural U.S. to partner with Huawei， partly because major U.S. telecom carriers don’t bother to serve residents in scarcely populated regions.
“They never want to serve these low density areas，” Kail said. “And if they do serve them， they don’t serve them very well， because they have a different business model.”
The big companies， according to Kail， are not participants in the U.S. Federal Communications Commission’s Universal Service Fund， which subsidizes small rural carriers so that they are financially able to provide telephone and broadband services to rural residents.
“The larger carriers don’t have this model， so they’re going to focus on doing business in the city，” Kail said.
By contrast， Huawei has prioritized entering the U.S. rural market. Andy Purdy， Chief Security Officer of Huawei Technologies USA， told U.S. media in an interview in early May that the company has about 40 client companies in U.S. rural areas.
According to Purdy， Huawei has 1，500 employees and a strong research and development presence in the U.S. It purchased $11 billion worth of components from U.S. firms in 2018.
Among them is LHTC Broadband， a telecom company focused on the rural area of the U.S. state of Pennsylvania. It offers telephone， TV and Internet services to 7，000 rural locations， 1，600 of which are served by Huawei equipment.
What has perplexed LHTC CEO James Kail is that he has never seen a security threat issue with Huawei equipment， not only in the past few months of heated accusations by the U.S. Government， but also throughout the last five years of partnership with the Chinese company.
On May 15， U.S. President Donald Trump declared a “national emergency” over what he called threats to U.S. technologies. The U.S. Department of Commerce on the same day put Huawei and its affiliates on a blacklist， meaning the sale and transfer of U.S. technologies to Huawei must be approved by the Federal Government.
“We haven’t had any issue with the equipment itself， and on top of that， the pricing was very competitive，” Kail told Xinhua， recalling that it was a prudent business decision for LHTC to choose Huawei as a supplier five years ago.
As of the end of 2018， 90 percent of LHTC’s fiber-deploying project using Huawei solutions had been completed， and the remaining 10 percent is expected to be finished by 2020.
“It’s been five years and we still haven’t seen any proof [of security threats]，” Kail said.
That said， the ban could deal a severe blow to LHTC， which has only 65 employees. To take out all the Huawei equipment will obviously be a significant hardship for a small company like ours， Kail said.
According to Kail’s estimates， it will take LHTC about a year to completely replace the existing Huawei equipment if the company focuses solely on that task at an expected cost of $400，000-$500，000 in total.
Apart from the replacement cost， what also concerns Kail is a sudden potential suspension of Huawei’s technical support once the restriction kicks in.
The Department of Commerce has granted a 90-day window for U.S. mobile phone companies and broadband providers tied to Huawei “to make other arrangements.”
“If we aren’t able to have technical support for upgrades because Huawei is shut off， that will be another problem，” Kail said. He added that LHTC is closely monitoring the situation because of its investment in Huawei and “the potential significant impact on our company.” Noting that it has been a good partnership over the last five years， Kail said Huawei has been “very responsive” when problems arose. In South Canaan， about 1，000 residents are using LHTC services supported solely by Huawei equipment.
Bonnie Bond， a network supervisor with LHTC， said she is “very concerned” that once Huawei is banned， her customers will not be able to watch TV or surf the Internet.
Kail said LHTC is one of the first small telecom companies in the rural U.S. to partner with Huawei， partly because major U.S. telecom carriers don’t bother to serve residents in scarcely populated regions.
“They never want to serve these low density areas，” Kail said. “And if they do serve them， they don’t serve them very well， because they have a different business model.”
The big companies， according to Kail， are not participants in the U.S. Federal Communications Commission’s Universal Service Fund， which subsidizes small rural carriers so that they are financially able to provide telephone and broadband services to rural residents.
“The larger carriers don’t have this model， so they’re going to focus on doing business in the city，” Kail said.
By contrast， Huawei has prioritized entering the U.S. rural market. Andy Purdy， Chief Security Officer of Huawei Technologies USA， told U.S. media in an interview in early May that the company has about 40 client companies in U.S. rural areas.
According to Purdy， Huawei has 1，500 employees and a strong research and development presence in the U.S. It purchased $11 billion worth of components from U.S. firms in 2018.