Large US wireless providers, such as AT&T, have been careful to avoid going through China’s Huawei to buy telecommunication equipment, and more recently have been forced to cut any ties whatsoever. A highly anticipated deal for AT&T to sell Huawei devices through its service plans, for instance, was nixed at the last moment early this year under political pressure.
Washington’s stated fears about Huawei-linked cyber-espionage has even torpedoed deals that have no direct connection with Huawei, such as Singapore-based Broadcom’s deal to acquire Qualcomm.
New legislation proposed on Monday by the Federal Communications Commission will make it even harder for Huawei to do business in the US. Small American telecoms providers will likely be collateral damage.
As The Wall Street Journal reports, “many regional American providers of wireless, TV and internet services have flocked to Huawei, attracted by what they say are Huawei’s cheaper prices, quality products and attentive customer service.”
“Meanwhile,” the article goes on, “a congressional bill with some bipartisan support aims to prohibit carriers with any substantial amount of installed Chinese telecom equipment from federal-government contracts.”
Some in the industry doubt the veracity of accusations of espionage.
“Our margins are pretty thin,” said Joe Franell, chief executive of Eastern Oregon Telecom. “If you start dictating what kind of equipment I can use, it tips the scales.” He added that the new legislation seemed to be driven by nationalism and protectionism, not by concerns of spying. ”I’m not going to rework my whole business plan based off a rumor or an unsubstantiated allegation.”