Canada Possible Huawei ban has telecoms asking Liberals about taxpayer compensation for new equipment
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Both Bell and Telus have approached the federal government over the possibility of being compensated by taxpayers, should they have to remove Huawei equipment from their networks, sources have told National Post. The two telecom companies could find themselves forced to replace the equipment if the Liberals end up banning the Chinese telecom equipment-maker from Canada’s 5G networks.
The Liberal government has been mulling a ban on Huawei for three years over security concerns. With uncertainty over government plans, Canadian wireless providers have been building their 5G networks using equipment from other vendors. But both Bell and Telus have previously installed Huawei equipment to serve their existing older-generation networks, and it would have to be removed if the ban is retroactive.
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A government source said officials told one of the telecoms that, since cabinet hasn’t yet made a final decision on a ban, it is the government’s position that it is too early to begin any formal conversations about compensation. Prime Minister Justin Trudeau and Innovation Minister François-Philippe Champagne have indicated that an announcement on the ban would come within weeks.
Champagne also told The Canadian Press earlier this month that Canada would only move forward with “trusted partners” when it came to future initiatives that involved artificial-intelligence technologies.
Experts have said Canada has no choice but to go ahead with a ban, given that our allies in the Five Eyes intelligence network — the U.S., Australia, New Zealand and the U.K. — have all banned or restricted Huawei equipment. The concern is that Huawei’s links to Beijing make it a security risk, particularly considering China’s laws that require Chinese companies to co-operate with its intelligence services.
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The U.S. Secretary of Commerce, Gina Raimondo, has said that she views Huawei as a national-security threat to the U.S. and its allies, and that the Biden administration intends to “work with allies to secure their telecommunications networks” to expand the use of “trusted U.S. and allied companies” in telecom.
Carleton University international affairs professor Fen Hampson said that British companies, especially smaller telecoms, are being compensated for costs incurred due to restrictions on Huawei equipment, and the U.K. government has also given enough time for those companies to phase out the hardware or find other suppliers.
He noted that given the dominance in Canada of the Big Three wireless providers — Bell, Telus and Rogers — there will be less “public sympathy for a public bailout of these companies by Canadian consumers” who pay some of the highest fees in the world for wireless services.
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“In the end though, Canadian taxpayers will be stuck with the bill. And the question is how much.” he said.
The cost to Bell and Telus for removing equipment is unclear. Early estimates put the figure at up to $1 billion for Telus. But because equipment is generally replaced over time anyway, that figure may be getting lower. In 2019, Telus told the government that replacing all of its equipment following a full ban on Huawei would be “an expensive and complex proposition over an elongated timeframe.”
Neither company responded to a request for comment, or questions about how much it would cost to replace Huawei equipment in the existing networks.
Bell and Telus aren’t the only companies who stand to be affected by a ban. Samer Bishay, CEO of smaller player Iristel, which has partnered with Huawei on 3G and 4G networks in Northern Canada, told the National Post in an earlier interview a requirement to rip out existing equipment would be “catastrophic.”
Taxpayers should not have to 'subsidize' rich telecoms that chose Huawei, Conservatives say .
The Conservatives are urging the Liberal government not to spend public money to compensate Canada’s large telecom companies for choosing to use Huawei equipment if it goes ahead with a Huawei 5G ban. “We ask that your government categorically reject requests for compensation from Canada’s large telecommunications companies,” Conservative Public Safety critic Raquel Dancho said in a letter sent Friday to Public Safety Minister Marco Mendocino and Innovation Minister François-Philippe Champagne.