TR Daily Draft Order Would Mandate ‘Rip-and-Replace’ Actions, Reporting
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Thursday, November 19, 2020

Draft Order Would Mandate ‘Rip-and-Replace’ Actions, Reporting

The draft text of the supply change national security second report and order circulated for a planned vote at the FCC’s Dec. 10 meeting would require eligible telecommunications carriers (ETCs)—those eligible for support under various Universal Service Fund programs—to remove and replace any equipment deemed to "pose an unacceptable risk to the national security of the United States or the safety and security of its people."

The draft second report and order in WC docket 18-89 would establish the Secure and Trusted Communications Network Reimbursement Program, which would reimburse smaller carriers for the costs of removing and replacing equipment deemed to pose an unacceptable risk to the national security of the United States or the safety and security of its people, subject to congressional appropriation of at least $1.6 billion to fund reimbursements to providers eligible under current law. The FCC has requested $2 billion from Congress for the program, the draft item notes.

It lays out a prioritization scheme in the event that whatever funding is appropriated is not sufficient to meet demand, putting ETCs ahead of non-ETCs and transitioning core networks ahead of transitioning non-core networks. It would pro-rate funding within a prioritization category if there were not sufficient funds to cover demand within a given category.

The draft second report and order would also "require all providers of advanced communications services to report whether their networks use covered communications equipment or services acquired after August 14, 2018," according to a fact sheet released with the draft item.

It would also establish a process for publishing and modifying a list of communications equipment and services that Congress or national security agencies or interagency bodies determine pose an unacceptable risk to the national security of the United States or the safety and security of its people.

The FCC last year barred the use of USF funds on equipment and services provided by "covered companies" deemed to pose a national security threat and made an initial designation that Huawei and ZTE were covered companies. The FCC’s Public Safety and Homeland Security Bureau confirmed those designations as final last summer (TR Daily, June 30).

In the interim between the Commission’s action last year and the final designation by the bureau in June, Congress passed the Secure and Trusted Communications Networks Act, which directs the FCC to prohibit the use of federal subsidies for companies posing a national security threat to communications networks or the communications supply chain. The Act also establishes the Secure and Trusted Communications Reimbursement Program to assist communications providers with the costs of removing and replacing prohibited equipment and services from their networks, evoking praise from industry players and other stakeholders as well as calls for swift passage of appropriations legislation to fund the new program. However, Congress has yet to appropriate funding for that program.

In September, the FCC’s Wireline Competition Bureau and Office of Economics and Analytics released the public results of the Commission’s supply chain security information inquiry, revealing that ETCs that responded to the information collection reported a total estimated cost of $1.837 billion to remove and replace Huawei Technologies Co. Ltd. or ZTE Corp. equipment in their networks. Of that total, WCB and OEA said that "filers that appear to initially qualify for reimbursement under the Secure and Trusted Communications Networks Act of 2019 report it could require approximately $1.618 billion to remove and replace such equipment" (TR Daily, Sept. 8). —Lynn Stanton, [email protected]

MainStory: FederalNews FCC WirelessDeployment BroadbandDeployment UniversalServiceLifeline PublicSafety Cybersecurity

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