The Federal Communications Commission's proposed ban on Huawei and ZTE gear in government-funded projects will hurt small Internet providers' efforts to deploy broadband, according to a lobby group for rural ISPs.

As previously reported, FCC Chairman Ajit Pai's proposal would prevent Universal Service Fund (USF) money from being used to buy equipment or services from companies that "pos[e] a national security risk." If the FCC approves the proposal, the ban is most likely to prevent the purchase of equipment from Chinese technology vendors Huawei and ZTE. But it could also affect other companies and technology from other countries, depending on how the FCC determines which companies pose national security threats.

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Trump declares TikTok, WeChat “national emergency,” preps bans View more stories ISPs who use federal money to build or expand broadband service would end up with fewer options for buying network gear. This would "irreparably damage broadband networks (and limit future deployment) in many rural and remote areas throughout the country," the Rural Wireless Association (RWA) told the FCC in a filing yesterday.

The RWA represents rural wireless Internet providers that offer home or mobile Internet service and have fewer than 100,000 subscribers. A recent Wall Street Journal report said that small ISPs rely on Huawei gear more than large telcos do.

Besides harming broadband deployment, the proposed ban wouldn't achieve Pai's goal of improving security in US communications networks, the RWA said. An effective national security strategy "should be applicable to all communications networks in the United States rather than targeting those relatively few communications networks" that rely on USF grants, the group said.

Instead of banning products from certain companies, the FCC should create a "standards and testing based system" to determine whether any specific products pose a risk. A "'country of origin' prohibitory regime... would provide nothing more than a false sense of security," the RWA said.

In sum, the proposed ban "will have the unintended consequence of harming the maintenance and advancement of broadband services in rural America, with no corresponding network security benefit," the RWA said.

The Universal Service Fund helps carriers improve telephone and broadband networks in primarily rural areas, and it provides financial support to poor people, schools, libraries, and rural health care providers. The fund is paid for by Americans via surcharges on their phone bills, and it distributes $8.5 billion a year.

Pai warned of back doors and hostile governments

Pai's plan is laid out in a Notice of Proposed Rulemaking (NPRM), which asks the public for input and will be voted on at the FCC's April 17 meeting. If the NPRM is approved, the FCC would accept public comment for at least three months before deciding whether to finalize the proposed ban.

When proposing the ban, Pai warned that "Hidden ‘back doors’ to our networks in routers, switches—and virtually any other type of telecommunications equipment—can provide an avenue for hostile governments to inject viruses, launch denial-of-service attacks, steal data, and more."

But the US government hasn't publicly presented evidence that Huawei and ZTE equipment has been compromised by the Chinese government, and the companies have denied allegations that their products are used for spying.

The RWA isn't the only trade group for small businesses that's telling the FCC that a ban would harm small ISPs. The National Federation of Independent Business (NFIB) wrote that the ban could have "a substantial adverse economic impact on small businesses in the telecommunications industry." The impact will be large for ISPs that rely heavily on USF funding and "have built their networks to date in substantial part with equipment from what would become a Prohibited Source Company," the group said.

The FCC ban would apply only to future purchases, so ISPs wouldn't have to stop using already-purchased equipment. But ISPs may have already signed maintenance contracts with the vendors and could suffer financially if they are forced to break contractual obligations, the NFIB said.

The FCC should ask the public for input on these concerns and others, such as whether a ban could introduce cross-vendor operability problems for ISPs that are forced to buy from different vendors, the NFIB said.