‘Rip and Replace’: The Tech Cold War Is Upending Wireless Carriers

Deep in a pine forest in Wilcox County, Ala., three workers dangled from the top of a 350-foot cellular tower. They were there to rip out and replace Chinese equipment from the local wireless network.

Three hours into the job, the team ran into a hitch. Replacement gear from a European company was obstructing a safety beacon for airplanes. “We’ve got a problem,” a crew member on the ground said. “They say it’s blocking the beacon.”

The project had already been delayed for months because of storms, slow equipment shipments and labor shortages. The new snafu, discovered early this month, would add at least two more days and blow the budget, said John Nettles, the president of the family-owned Pine Belt Cellular, who was standing at the base of the tower.

“People in Washington think it’s easy to just swap out the equipment, but there are always problems you didn’t expect, always more expenses and always delays,” he said.

Rip-and-replace rolled out after Congress passed a law in January 2020 creating the reimbursement effort. But costs from the program quickly soared.

Six equipment manufacturers pitched their gear to him, he said. Mr. Nettles chose ZTE because the company offered equipment at less than half the cost of other bids. Pine Belt initially bought $5 million in ZTE equipment, including hundreds of antennas, radios and other gear for its 67 cell towers.

The F.C.C. “told me to find the cheapest equipment, and no one thought twice about ZTE being Chinese,” he said.

But since restrictions on ZTE gear were introduced, Mr. Nettles has spent most of his time trying to replace it with equipment from Western companies like Nokia and Microsoft.

At Pine Belt’s central networking hub, a windowless cinder block building in downtown Selma, seven large metal bins recently overflowed with ZTE servers, processors and switches, the gear that moves internet traffic around and connects calls. There were also racks of new Nokia and Microsoft equipment and Dell computers. The Chinese and Western-made technology will operate simultaneously until Pine Belt can completely rid its cell towers of ZTE equipment.

In 2021, Pine Belt applied for $68 million in reimbursements from the F.C.C. for the replacement effort. But last July, the agency said that it could only refund costs of up to $27 million. Pine Belt is about 15 percent into its transition away from Chinese equipment and is already $5 million over the F.C.C.’s budget, Mr. Nettles said.

Early this month, Mr. Nettles drove 15 miles to a rusting 300-foot tower where two workers were preparing to tear out Chinese gear. Rigged with ropes and pulleys, they planned to climb the tower to assess if it could hold the weight of an additional three antennas and radio equipment from Nokia.

The workers decided they had to pour cement under the tower to create a stronger base for the additional load. The tower will have to hold the old ZTE and new Nokia equipment during the rip-and-replace work to prevent any service interruptions.

As Mr. Nettles parked near the tower, a customer in Selma called to complain that his cell service was cutting in and out. The customer was between one tower with ZTE equipment and another with Nokia equipment.

“The ZTE and Nokia equipment aren’t communicating well with each other,” Mr. Nettles tried to explain. “Sorry about the inconvenience.”

Adam Satariano contributed reporting from London.

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