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Huawei's campaign could be a disaster for small carriers

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Huawei's campaign could be a disaster for small carriers
But good news for other telecom companies

After years of growing uncertainty, the US government is making the biggest push so far to topple Chinese technology companies from US networks, and Huawei is under pressure. 

It is reported that the Trump administration is considering a ban on wireless operators buying equipment from Huawei or ZTE. Another report said the United States was pushing allies to drop Huawei devices as well. 

In the Senate's appearance this week, US intelligence chiefs are likely to cite a 5G action of Chinese companies as a major threat to US interests.

A repressive crackdown on any major company inevitably has unintended consequences, and companies in the United States and abroad are already surveying impacts. 

The colleges have reportedly begun to move away from using the company's equipment, and lawmakers have begun to worry about whether weaknesses are inherent in the company's products.

Trump's management prevented contractors from using Huawei technology, and major telecommunications companies are not using Huawei equipment that could harm the contract's work. 

But the same is not true for smaller companies without those contracts. 

In the face of renewed controversy, the FCC proposed rules that could prevent companies from using agency funds to buy equipment from companies that are considered a security risk - or possibly using equipment from companies like Huawei at all. Small carriers are likely to feel the brunt of this policy.

Trump management prevented contractors from using HUAWEI technology
To build this infrastructure, these small businesses say they often rely on Huawei, which has become the world's largest communications equipment provider, offering all the tools the company may need. 

Some companies argue that Huawei's equipment could mean several million dollars.

In its submission to the Federal Communications Commission (FCC), the Rural Telecommunications Association (RWA), which represents small service providers as well as Huawei itself, claimed that the costs associated with dumping Huawei products would be significant. 

"BBC estimates that at least 25 percent of its members will be affected," the group wrote in a report to the agency. 

"Estimated shipping and replacement costs vary from carrier to carrier, but are widely important." RWA argues that the FCC should provide funding for any required equipment change.

Already stretched rural carriers thin. 
Bridging the gap between rural and urban Internet access has been a goal of the FCC and many lawmakers for years, and they have pushed for rapid infrastructure construction. 

In the submission process, a member of the Association estimated that the replacement of network equipment might take several years.

While the US government may have left Huawei largely behind, this is not true for the world as a whole, and some international companies may find it difficult to end its business with the company. 

Lawmakers have referred to the use of Huawei devices by so-called "five-eyed" allies such as the United Kingdom as potential US security agents, and pressure to end those ties could lead to a devastating disintegration. 

Canada, for example, is debating whether to block Huawei from working on its 5G network.

Huawei has argued that it is vital to the future of 5G. The company has repeatedly stated that, as a major telecommunications company, it will be a major player in the launch of next-generation technology. 

Huawei also warned, the United States without its cooperation will be delayed in its ambition to be a leader in technology.

Not everyone is convinced. "I'm not sure I'm buying this argument," says Arthur Dong, a professor at Georgetown's McDonough Business School. 

He points to companies such as Ericsson, another major telecommunications company, and says other companies capable of providing similar services would be more likely to be winners if Huawei was pulled out of competition. "I think they are all very qualified and trading," he says.

Meanwhile, tensions between Huawei and the US government continue to rise. 

Last month, a senior executive of the company was arrested in Canada on suspicion of violating US sanctions, an issue that further eroded international relations with China.

Huawei repeatedly denied that they pose a security threat. The company says it is not a Chinese spy ship, that no evidence has been provided and that its relationship with the Chinese government is similar to that of US companies with the US government. 

The United States says Huawei has close ties to the Chinese government, but does not need to provide conclusive evidence.

In response to criticism, Eric Zou, one of Huawei's alternate presidents, said in an interview with CNBC: "These remarks are politically motivated and not based on facts ... all of these ... doubts have no documented facts" .

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