Surprise: U.S. Cost Of Ripping Out And Replacing Huawei Gear Jumps From $1.8 To $5.6 Billion

from the patriotic-grift dept

So we’ve noted that a lot of the U.S. politician accusations that Huawei uses its network hardware to spy on Americans on behalf of the Chinese government are lacking in the evidence department. The company’s been on the receiving end of a sustained U.S. government ban based on accusations that have never actually been proven publicly, levied by a country (the United States) with a long, long history of doing exactly what it accuses Huawei of doing.

To be clear, Huawei is a terrible company. It has been happy to provide IT and telecom support to the Chinese government as it wages genocide against ethnic minorities. It has also been caught helping some African governments spy on the press and political opponents. And it may very well have helped the Chinese government spy on Americans. So it’s hard to feel too bad about the company.

At the same time, if you’re going to levy accusations (like “Huawei clearly spies on Americans”) you need to provide public evidence. And we haven’t. Eighteen months of investigations found nothing. That didn’t really matter much to the FCC (under Trump and Biden) or Congress, which ordered that U.S. ISPs and network operators rip out all Huawei gear and replace it to an estimated cost of $1.8 billion. Yet just a few years later, the actual cost to replace this gear has already ballooned to $5.8 billion and is likely to get higher:

“The FCC has told Congress that applications to The Secure and Trusted Communications Networks Reimbursement Program have generated requests totaling about $5.6 billion ? far more than the allocated funding. The program was established to reimburse providers with 10 million or fewer customers who must remove Huawei Technologies Company and ZTE equipment.”

That’s quite a windfall for companies not named Huawei, don’t you think?

My problem with these efforts has always been a nuanced one. I have no interest in defending a shitty global telecom gear maker with an atrocious human rights record which very well may be a proven to be a surveillance lackey for the Chinese government. Yet at the same time, domestic companies like Cisco have, for much of the last decade, leaned on unsubstantiated allegations of spying to shift market share in their favors. DC is flooded with lobbyists who can easily exploit both xenophobia and intelligence worries to their tactical advantage, then bury the need for evidence under ambiguous claims of national security:

“What happens is you get competitors who are able to gin up lawmakers who are already wound up about China,? said one Hill staffer who was not authorized to speak publicly about the matter. ?What they do is pull the string and see where the top spins.?

But some experts say these concerns are exaggerated. These experts note that much of Cisco?s own technology is manufactured in China.”

So my problem here isn’t necessarily that Huawei doesn’t deserve what’s happening to it. My problem here is generally a lack of transparency in a process that’s heavily dictated by lobbyists, who can hide any need for evidence behind national security claims. This creates an environment where decisions are made on a “noble and patriotic basis” that wind up being beyond common sense, reproach, and oversight. That’s a nice breeding ground for fraud.

My other problem is the hypocrisy of a country that doesn’t believe in limitations on spying, complaining endlessly about spying, without modifying any of its own, very similar behaviors. AT&T has been proven to be directly tethered to the NSA to the point where it’s literally impossible to determine where one ends and the other begins. Yet were another country to ban AT&T from doing business there, the heads of the very same folks breathlessly concerned about surveillance ethics would explode. What makes us beyond reproach here? Our ethical track record?

And my third problem is that the almost myopic, focus on Huawei has been so massive, we’ve failed to take on numerous other privacy and security issues, whether that’s the lack of a meaningful federal privacy law, the rampant security and privacy issues inherent in the Internet of things space (where Chinese-made hardware is rampant), or election security with anywhere close to the same level of urgency. These all are equally important issues, all exploited by Chinese intelligence, that see a small fraction of the hand-wringing and action reserved for issues like Huawei.

Again, none of this is to defend Huawei or deny it’s a shitty company with dubious ethics. But the lack of transparency or skepticism creates an environment ripe for fraud and myopia by policymakers who act as if the entirety of their efforts is driven by the noblest and most patriotic of intentions. And, were I a betting man, I’d wager this whole rip and replace effort makes headlines for all the wrong reasons several years down the road.

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Companies: huawei

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Comments on “Surprise: U.S. Cost Of Ripping Out And Replacing Huawei Gear Jumps From $1.8 To $5.6 Billion”

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TheDumberHalf says:

I'm with the dum-dums on this one

There’s no evidence Huawei 5G equipment is spying for the Chinese Government, yet Huawei does spy for the Chinese government. This is confusing. To me, the act of spying for the Chinese domestically and abroad is enough evidence the equipment could be compromised. US regulators have to caution on the safe side of things, so I don’t blame them for their paranoia.

James Burkhardt (profile) says:

Re: I'm with the dum-dums on this one

Ah! I see we are repurposing Big lie justifications. That some votes might have been compromised is not evidence that any votes were compromised. That was sufficient basis for investigations. Continuing to beat the suspicion and ignoring the lack of further evidence coming forward however is not justified. The same applies here. Huawei produced suspicion with its cooperation with the Chinese government. The issue is this claim has been battered around for a decade, and multiple investigations concluded there is no basis for concern.

Huwaei is under scrutiny because it has in the past provided info to the Chinese government that was gathered on Chinese networks. Their hardware has been put under the microscope. Huawei Equipment in America, upon security audit after audit after audit, does not appear to be ‘phoning home’. If there was once a reasonable basis to question if Huawei is compromising equipment provided to American firms without further evidence, that time has passed.

The replacement for it is a handful of American firms whose equipment is built in China. Those firms are the ones beating the security drum. This represents a conflict of interest, as firms like Cisco stand to profit handsomely from Huwaei equipment replacement. One thing the article notes is the equipment from American firms enjoys a presumption of security not afforded to Huwaei equipment. And since all this equipment is built in china, if china did have a super secret communications channel we can’t identify in Huwaei equipment, Cisco equipment would present just as much a threat. A potentially bigger one, as Cisco equipment hasn’t had the microscope treatment for the last decade.

Professional Paranoia would immediately question the claims from Cisco that Huwaei equipment is phoning home to china. A 5.8 Billion dollar government handout can justify a lot of baseless FUD, and baseless FUD is what US intellegence concluded it was.

Anonymous Coward says:

This is much more China-phobic than it appears. Much of this country’s telecom equipment comes from non-U.S. suppliers, e.g., Ericcson and Nokia. Many of the over 2,000 small telcos and ISPs in the U.S. use Huawei equipment because they can’t afford Ericcson, Nokia, and Cisco. The hidden agenda is that the telco/ISP "big 3" (AT&T, Verizon, and Comcast) are the winners when the small companies are disrupted and distracted by having to swap out equipment. If there are backdoors in Huawei equipment, the U.S. spy agencies probably put them there. Regardless, there are many far less complex ways to spy on Americans. Data brokers will sell you just about anything you want to know! And the amount of Huawei equipment in U.S. networks pales in comparison to the many millions of Chinese-built routers and switches, at least one of which is installed in nearly every home in the country! Gimme a break!

Anonymous Coward says:

China hasn’t changed that much over the years. So if it is a problem now, it should have always been a problem. We never should have been buying China’s stuff, allowing companies to farm out parts and production to China, or exporting our industries to China (or elsewhere).

For whatever reason the companies that chose to destroy our manufacturing now think it is a good (and very likely temporary) move to declare some stuff from China as forbidden, and it must be replaced with other stuff which very likely has parts and fab in China anyway. (And the government can have our own intelligence agency-compromised shit intalled but shhh.)

It’s all a big hoax.

Anonymous Coward says:

it seems to me that the biggest issues are the same old ones. no company anywhere else can produce the technology as good and as reliable as Huawei, just as no other company can produce things as cheaply or as upgradeable either. when there is no evidence of wrong-doing by a company yet ample evidence of the cost of changing to other companies, disguarding this one, how can it make sense to change anyway? at $5.6billion and climbing, surely it would have been better to carry on using Huawei and spend that money on better security rather than change the hardware for something more home-grown, that you neverown (even though you bought it), that is nowhere as reliable, costs 3x at least to buy, isn’t as reliable and isn’t ungradeable and still has at a minimum, half it’s components made by and manufactured in China anyway? damn ridiculous and all because Trump wanted to give contracts to USA companies that aren’t as reliable anyway!!

arp2 (profile) says:

Re: Re:

"no company anywhere else can produce the technology as good and as reliable as Huawei…"

This is a bit of. giveaway on your part. Huawei is a quintessentially Chinese company- copy other designs to create a "good enough" and much cheaper version. It doesn’t help that China is pretty aggressive with forced IP transfer issues. Where does that IP go? ZTE, Huawei, etc.

Now, you’re correct that the components are made in China, but components are much easier to review for security flaws than an entire system.

But in the end, nobody has presented any solid evidence of spying with their gear. Now, if that’s due to the lack of transparency, that’s one problem. If they’ve been transparent and we’re still banning it on a hunch, that’s another issue.

xyzzy (profile) says:

Just part of the war

I don’t think it any coincidence that the restrictions on Huawai happened just as their equipment was becoming much more popular. We know China doesn’t believe in fair competition, but it seem neither does the US. Maybe it’s a draw.

I see no evidence of planted back doors in Huawai equipment.

These actions will in the short term profit US based companies like Intel and AMD, that is why this was done. The spying stuff is, in my opinion, simply a pretext.

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