China to accelerate 5G roll-outs while FCC faces “rip and replace” funding shortfall

China Daily reports that local governments in China are doubling down on plans to accelerate 5G rollouts in 2022. More than 20 provincial and municipal governments in China have emphasized efforts to accelerate construction of “new infrastructure” like 5G and data centers in their work plans for this year.

Shanghai plans to build more than 25,000 5G base stations this year (do you really believe that?) to push forward the in-depth coverage of the superfast wireless network. The city also has ambitions to build super large computing power platforms to meet growing demand.

Zhao Zhiguo, spokesman for the Ministry of Industry and Information Technology, China’s top industry regulator, said earlier:

“2022 is a critical year for the large-scale development of 5G applications. We will continue to improve 5G network coverage and accelerate the in-depth integration of 5G and vertical industries.”

One of the priorities is to moderately speed up the coverage of 5G in counties and rural towns in China, Zhao said.

Ten ministries, including the Cyberspace Administration of China, recently unveiled a digital rural development action plan for the period from 2022 to 2025, which called for an intensified push to promote digital infrastructure upgrades in rural areas.

Telecom operators are also moving fast. China Mobile, the nation’s largest telecom carrier, said it aims to achieve continuous 5G coverage in rural towns across the country by the end of this year.

Telecom carriers’ 5G plans seek to harness the power of more than 1.4 million 5G base stations that were deployed in China by the end of last year (but can you really trust that China government reported number?). 5G signals are already available in urban areas of all of China’s prefecture-level cities, more than 98% of county-level towns and 80 percent of rural towns, MIIT data showed.

5G Cell Tower in China.  Image courtesy of China Daily


In the U.S., it’s a different story. The Federal Communications Commission (FCC) found a shortfall in funding for its plan to replace Chinese telecom equipment. Inadequate finance is likely to pose connectivity challenges to people in remote areas in the US, experts said.

According to a report on MobileWorld Live, a telecom industry website, the FCC said local telecom operators’ requests for funding to replace network equipment made by Chinese companies Huawei and ZTE totaled $5.6 billion, almost three times the $1.9 billion allocated by the US federal government. Network operators serving less than 10 million customers which used government subsidies to buy Huawei or ZTE equipment before 30 June 2020 were eligible to apply for funding to cover costs associated with removing, replacing and disposing of the Chinese network equipment.

In a statement released last week, FCC Chairwoman Jessica Rosenworcel said that 181 carriers submitted initial reimbursement application requests totaling approximately $5.6 billion.  Carriers are required to remove and replace existing network gear from Huawei and ZTE after the vendors were deemed national security risks. Congress in late 2020 set aside around $1.9 billion to fund and carry out the effort under the Secured and Trusted Communications Act 2019.

“Last year Congress created a first-of-its kind program for the FCC to reimburse service providers for their efforts to increase the security of our nations communications networks,” Rosenworcel said. “We’ve received over 181 applications from carriers who have developed plans to remove and replace equipment in their networks that pose a national security threat,” she added.

The FCC banned U.S. telecom carriers from buying Huawei and ZTE’s equipment via federal subsidies, citing what it alleged were national security concerns. The two Chinese tech companies have repeatedly denied the accusations, which they said are groundless.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association in China, said Huawei and ZTE’s products are currently used by US telecom carriers to offer network and broadband services in some of the most remote regions in the US. Xiang said that the U.S. order to replace Huawei/ZTE wireless network equipment in rural areas will result in the lack of quality telecom services.

Steve Berry, president and CEO of the Competitive Carriers Association, a trade group for about 100 wireless providers in the US, issued a statement calling on the U.S. government to ensure the FCC program is fully funded so that connectivity is maintained during the operators’ transition to new wireless telecom equipment for their cellular networks.


Table 1: All the companies asking for FCC “rip and replace” funding

Company Applicant Wireless Wireline Total Vendor
Viaero Wireless NE Colorado Cellular Inc X $1,194,000,000 Ericsson
Union Wireless Union Telephone Company X $688,000,000 Nokia
ATN International Commnet Wireless, X $418,768,726
Gogo Gogo Business Aviation LLC X $332,770,202
NTCH PTA-FLA, Inc. $273,971,426
Lumen Level 3 Communications, LLC X $269,999,994
Stealth Communications X $199,066,226
SI Wireless, LLC X $181,023,489
United Wireless Communications, Inc. X $173,471,477
Hotwire Communications, Ltd. X $141,299,003
Latam Telecommunications, L.L.C. $138,060,092
NTUA Wireless, LLC X $124,447,019
Windstream Communications LLC X $118,271,652
Rise Broadband Skybeam, LLC X $106,159,884
Pine Telephone Company X $87,095,419
Mediacom Communications Corporation X $86,171,976
Flat Wireless, LLC X $76,284,671
Pine Belt Cellular, Inc. X $74,856,191
James Valley Cooperative Telephone Company X $53,000,000
AST Telecom, LLC d/b/a Bluesky X $49,959,592
Country Wireless LLC X $47,508,982
Point Broadband Fiber Holding, LLC X $47,172,086
Board of Trustees, Northern Michigan University X $45,796,636
Hargray Communications Group, Inc. X $42,785,933
NfinityLink Communications, Inc. $37,535,905
Plateau Telecommunications, Incorporated X $30,000,000
Texas 10, LLC $29,088,795
Mark Twain Communications Company X $29,000,000
Panhandle Telecommunication Systems Inc $28,925,552
TelAlaska Cellular, Inc. X $26,567,517
Central Louisiana Cellular, LLC X $26,264,528
TRANSTELCO INC. X $25,573,213
Beamspeed, L.L.C. X $19,596,157
Triangle Telephone Cooperative Association, Inc. X $18,336,507 Mavenir
Eastern Oregon Telecom, LLC X $18,122,185
Puerto Rico Telephone Company, Inc. X $16,857,851
Vitelcom Cellular, Inc. d/b/a Viya Wireless X $15,716,011
Santel Communications Cooperative, Inc. X $14,604,337
MHG Telco LLC X $14,456,482
WorldCell Soutions, LLC X $12,673,559
Point Broadband Fiber Holding, LLC X $11,344,724
Copper Valley Wireless, LLC X $11,151,417
Premier Holdings LLC $9,759,680
Eltopia Communications, LLC X X $7,741,951
Metro Fibernet, LLC X $7,567,518
Bestel (USA), Inc. $6,887,500
PocketiNet Communications Inc. $6,741,452
Carrollton Farmers Branch ISD X $5,943,974
Windy City Cellular X $5,562,067
Bristol Bay Cellular Partnership X $5,269,183
Kings County Office of Education $5,221,191
Interoute US LLC $4,867,140
Pasadena ISD $4,387,311
Velocity Communications, Inc. X $4,158,729
Advantage Cellular Systems, Inc. X $3,479,000
New Wave Net Corp $3,365,772
FirstLight Fiber, Inc. $3,306,644
Gigsky, Inc. X $3,128,678
Triangle Communication Systems Inc $2,779,371
FIF Utah LLC X $2,662,538
Gallatin Wireless Internet, LLC X $2,399,162
Moore Public Schools $2,023,243
HUFFMAN ISD $1,920,588
Crowley ISD $1,720,496
Castleberry Independent School District X $1,672,527
One Ring Networks, Inc. $1,649,281
University of San Francisco $1,570,437
Leaco Rural Telephone Cooperative, Inc. $1,511,617
Zito West Holding, LLC X $1,453,469
Southern Ohio Communication Services Inc $1,312,844
Xtreme Enterprises LLC X $1,097,283
Virginia Everywhere, LLC X $562,001
South Canaan Telephone Company $542,139
Palmer ISD $520,146
Waxahachie ISD X $457,396
Hunter Communications & Technologies LLC $432,348
Utah Telecommunication Open Infrastructure Agency $413,760
COMMSELL $302,400
VTel Wireless, Inc. X $283,618
Trinity Basin Preparatory, Inc. $242,510
NTInet, inc $198,340
LakeNet LLC X $193,277
IdeaTek Telcom, LLC X $181,899
Millennium Telcom, L.L.C., dba OneSource Communications $165,195
Inland Cellular LLC X $117,183
Roome Telecommunications Inc $92,144
Milford Independent School District $40,399
Angeles Enterprises X $33,368
Crystal Broadband Networks X $28,704
Natural G.C. Inc. $27,313
Webformix Internet Company X $22,400
Northern Cambria School District $14,400
Deer Creek Independent School District $-
This FCC data was initially compiled by vendor Mavenir and then expanded, checked and edited by Light Reading staff.

“We’ve received over 181 applications from carriers who have developed plans to remove and replace equipment in their networks that pose a national security threat. While we have more work to do to review these applications, I look forward to working with Congress to ensure that there is enough funding available for this program to advance Congress’s security goals and ensure that the US will continue to lead the way on 5G security,” FCC Chairwoman Jessica Rosenworcel said in a statement.


5 thoughts on “China to accelerate 5G roll-outs while FCC faces “rip and replace” funding shortfall

  1. Any statistics or data coming from the CCP (China Communist Party) are not trust worthy. The CCP has talked up 5G use cases/applications and 5G vertical industries for years. Yet despite that propaganda, there are no real 5G vertical industry users to date.

    They know they were lying to deceive the public, but they still keep it up despite foreign criticism. That is the basic nature of the CCP.

    It doesn’t matter if it is politic, economic, technical, or even sports (China hired many foreigners to be on Chinese teams in the Winter Olympics Game). It’s all a sham!
    Do not trust any numbers, statistics or data reported by the Chinese government or state controlled media, like China Daily!

  2. On Dec 7, 2022, China Telecom announced it has deployed 870,000 5G base stations co-shared with China Unicom. China Telecom has built a 5G SA network via co-building and co-sharing with China Unicom. As of the first half of 2022, the number of activated co-shared 5G base stations reached 870,000, basically achieving contiguous coverage of key towns.

  3. U.S.-China Trade War Background:
    As recently as September, Apple planned to use cheaper chips from China’s Yangtze Memory Technology for iPhones sold locally. But Apple had to quickly reverse course after the U.S. unloaded its ultimate weapon against China’s technology ambitions.

    Until then, the U.S. had moved to block access to key technologies for hundreds of entities on a case-by-case basis. Export bans targeted firms or research centers linked to China’s military. Also those engaged in surveillance of the Muslim Uyghur population or charged with violating export rules or intellectual property theft.

    Yet those restrictions were too porous to seriously blunt China’s technological progress. That may explain why Beijing resisted the urge to retaliate.

    “Technological innovation has become the main battleground of the global playing field, and competition for tech dominance will grow unprecedentedly fierce,” President Xi Jinping said in a May 2021 address.

    China looked likely to prevail, according to a December 2021 review from Harvard’s Belfer Center for Science and International Affairs. In key 21st century technologies, such as AI, semiconductors, quantum computing and green energy, the authors concluded that China “had already become No. 1” in some areas. And it was on a path to overtake the U.S. within a decade in others — unless something major changed. And something major did change starting last September.

    In a Sept. 16 speech, National Security Advisor Jake Sullivan said U.S. export controls previously aimed to maintain technology leadership — staying “only a couple of generations ahead” of geopolitical rivals — but didn’t strive for dominance.

    “That is not the strategic environment we are in today,” Sullivan said. Instead, he said, the U.S. faces a competitor willing to devote nearly limitless resources to achieving leadership in technologies that can act as “force multipliers.” The new goal must be to “maintain as large of a lead as possible.”

    The Biden administration in September blocked sales of high-end AI chips from Nvidia and AMD to Chinese companies. Then on Oct. 7, the U.S. announced sweeping export rules aimed at blocking China’s chip progress at every chokepoint.

    The rules don’t just establish a presumption of denial for Chinese purchases of the most advanced AI chips. They also deny China the software to design those chips and the equipment to produce them. They also cut off the key components that go into high-level chip equipment and access to the world’s most advanced chip fabrication facilities. Lastly, the rules aim to deprive the Chinese chip industry of brain power. They require a license for any U.S. citizen, resident or firm to contribute to advanced semiconductor production in China.

    The export rules set the floor for chip equipment exports above the 14-nanometer production achieved by China’s largest chipmaker, SMIC, as early as 2019. As the industry strives to make ever-smaller circuits, which translate to faster and more power-efficient semiconductors, the U.S. aims to degrade China’s semiconductor capability. When the U.S. first restricted exports to the state-owned SMIC in 2020, it allowed equipment sales above 10 nanometers.

    Taiwan Semiconductor (TSM) recently celebrated the start of mass production using its 3-nanometer technology. TSMC is building a 3nm fab in Arizona as part of a $40 billion investment.

    Allies Join U.S.-China Trade War Over Tech:
    Success of the U.S. export controls depends on the cooperation of key allies. News on that front has been largely positive. Taiwan, Japan and Netherlands are largely acceding to U.S. wishes. Netherlands is home to ASML (ASML), the only supplier of extreme ultraviolet lithography equipment needed for the most-advanced chips. In fact, ASML has agreed to go further. It’s also restricting exports of deep ultraviolet lithography equipment. That gear reportedly let SMIC achieve 7-nanometer production.

    South Korea, though seeking assurances about its chipmakers’ ongoing investments in China, also appears to be on board.

    In a March speech to Chinese businesses, Xi blasted the U.S. policy of “all-round containment, containment and suppression on our country, bringing unprecedented severe challenges to our development.”

    French President Emmanuel Macron, fresh from a China trip with a delegation including CEOs from Airbus (EADSY) and Alstom, voiced his own frustration with U.S. strategy and the presumption that Europe will fall in line. “Is it in our interest to accelerate (a crisis) on Taiwan? No,” Macron was quoted as saying.

    Carnegie Endowment for International Peace fellow Matt Sheehan had cautioned that America’s “strongly zero sum approach” to confront China on technology might not be popular.

    That approach “isn’t equally compelling to countries that don’t see themselves as locked in a battle to be the one dominant global superpower.”

    Yet Macron’s criticisms have been an outlier in the escalating U.S.-China trade war. In a March 30 speech, European Commission President Ursula von der Leyen painted a picture of “a China that is becoming more repressive at home and more assertive abroad.”

    Xi has maintained his “no limits” friendship with Russian President Vladimir Putin, imposed control over Hong Kong and signaled that Taiwan’s turn may come sooner than later. All that has built support for America’s escalation of the technological cold war with China.

    China-Taiwan Flashpoint:
    Some analysts believe Biden is taking a calculated gamble. The bet is that slowing China’s technology progress in the intermediate term is worth the risk that China’s semiconductor sector will emerge stronger and self-sufficient in the long run.

    Yet near-term concerns are preeminent. Taiwan boasts 90% of the manufacturing capacity for the world’s most advanced chips, a 2021 Boston Consulting Group study estimated. The U.S. has embarked on a major expansion of semiconductor production to de-risk its supply chain. That includes $52 billion in subsidies from the 2022 Chips Act. Europe and South Korea are making similar efforts.

    That may not be Biden’s only gamble. As the U.S. essentially weaponizes Taiwan’s advanced chipmaking, might Beijing try to assert its will over Taiwan by force?

    That’s an almost unimaginable scenario, one that seems certain to plunge the global economy into chaos.

    Yet China is “seriously” considering an economic blockade of Taiwan, with the idea of “winning the war without an actual fight,” deputy foreign minister Roy Chun Lee told Bloomberg this week. However, a blockade could easily escalate into military confrontation, he said.

    Early this year, a scenario only moderately less explosive briefly seemed like a real risk. The U.S. aired intelligence suggesting China might begin arming Russia to try and help Putin finish off Ukraine.

    Both U.S. and European officials warned Beijing that crossing that “red line” would bring serious reprisals.

    China Flexes Its Economic Power:
    Yet, for now, Xi is showing no inclination to cross red lines as he prioritizes China’s economic strength, undercutting America where he can.

    China scored a PR coup of sorts in March, seemingly filling the vacuum left by U.S.-Saudi frictions, when it brought together Iran and Saudi Arabia as they restored diplomatic relations. Then, claiming neutrality in the Russia-Ukraine conflict, Xi paid a visit to Putin to discuss China’s peace plan.

    Although Kyiv sees the plan as a nonstarter, Macron, on his Beijing visit, credited Xi for a serious peace effort. And that wasn’t Macron’s only gift. Airbus announced plans for a second assembly line near Beijing as the European aerospace giant supplants Boeing (BA) amid heightened U.S.-China trade and geopolitical tensions.

    Beijing is seizing every opportunity to use its economic might to drive a wedge between the U.S. and its allies.

    U.S.-China Trade War Complicates Battery Charge:
    A few days after the Airbus news, Tesla (TSLA) CEO Elon Musk tweeted that the company will break ground this year on a new Shanghai factory that will produce 10,000 Megapack battery units to meet growing energy storage demand.

    Meanwhile, Ford (F) has reached a deal with China-owned Contemporary Amperex Technology, also known as CATL, to produce lithium ferrous phosphate EV batteries at a new factory in Michigan. Tesla reportedly has had similar discussions with CATL. Yet the Ford-CATL partnership has drawn fire from U.S. lawmakers angry that a Chinese firm might benefit, if only indirectly, from Inflation Reduction Act subsidies. Beijing, for its part, reportedly plans to scrutinize the deal out of concern Ford will gain access to sensitive technologies.

    The Ford-CATL partnership is “a symbol of how difficult it is for the United States to balance the interests of private industry with the desire to reduce dependence on Chinese technologies,” wrote Council on Foreign Relations researcher Seaton Huang.

    China Considering Restricting Exports:
    China world tradeAs the federal government puts up hundreds of billions of dollars in subsidies to accelerate the build-out of a U.S.-centric supply chain, Beijing may be mulling ways to disrupt things. China is considering restricting exports of technology and equipment for making photovoltaic cells for large solar panels.

    Micron, which is building a $20 billion chip factory in New York, recently warned about the impact of a ban on Chinese exports of rare earths.

    The U.S. is working to diversify its rare earth supply. MP Materials (MP), a major rare earths miner via its Mountain Pass, Calif., complex, has long shipped its unseparated bulk concentrate to China for processing. But it’s beginning to separate the rare earths it mines. The next step is completing a Texas manufacturing facility that will produce enough magnets to power 500,000 EVs per year. General Motors (GM) is a strategic partner.

    U.S.-China Relations Tense, Economies Intertwined:
    In rare earths and solar, the U.S. has the capacity to diversify away from China, analysts say. But the process may be a multiyear one with high costs.

    Five years after former President Donald Trump launched his China trade war, the world’s two biggest economies are still very much intertwined. Two-way U.S.-China trade, including Hong Kong, hit a record $725 billion in 2022, up 2.5% from 2018.

    That’s not to say there’s no decoupling. Trade in semiconductors and Boeing jets has tumbled. Agricultural exports to China have surged, but that’s thanks to food inflation.

    Over the same period, U.S.-Vietnam trade exploded by $80 billion to $139 billion. China’s exports to Vietnam, however, more than doubled over the past five years, note Carnegie Endowment fellows Yukon Huang and Genevieve Slosberg. Much of the growth in exports to Vietnam came in areas like computer accessories and telecom equipment, where Chinese exports to the U.S. fell.

    The implication: “China may be exporting less to the United States directly, but it is now indirectly exporting more.”

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