Huawei rip & replace rules get FCC approval

The FCC today voted unanimously to adopt rules to implement the Secure and Trusted Communications Networks Act of 2019, as well as affirming its stance that Huawei is indeed a national security threat.

The order that the commission voted on today requires the FCC to publish a list of communications equipment and services that are determined, under certain criteria, to be a risk to national security. Huawei has been in the crosshairs for years now, and commissioners blasted the company for its ties to the Chinese government. Specifically, the commission voted to affirm the ban on the use of Universal Service Fund (USF) support to buy Huawei equipment and services.

Included in the rip and replace order – which CCA President and CEO Steve Berry says should really be “replace, then rip,” – are rules associated with how smaller operators will be reimbursed for removing and replacing equipment that’s deemed a security risk. The costs are estimated to be at least $1.6 billion, and they’re still waiting on Congress to allocate the funds.

Earlier this week, a group of senators sent a letter to Senate Majority Leader Mitch McConnell, (R-Kentucky), and others on the Senate Committee on Appropriations, urging full funding for the Secure and Trusted Communications Networks Act as Congress completes the appropriations process for fiscal year 2021.

FCC Chairman Ajit Pai, who will be leaving the commission in January, said he agrees with Senate Commerce Committee Chairman Roger Wicker, (R- Mississippi), that fully funding the program is essential to protecting the integrity of communications infrastructure and protecting the future viability of the digital economy at large. “The FCC stands ready to fully implement the reimbursement program once Congress provides this funding,” Pai said.

Commissioner Michael O’Rielly, who participated in his last meeting as a commissioner, said the FCC is effectively closing the U.S. market to certain companies and reimbursing providers that bought certain equipment in the interests of preserving the nation’s national security.

“It is a sobering action, and our rhetoric should match the gravity of the moment and its long-term importance,” he said in prepared comments. “While we should be incredibly mindful our actions may have global repercussions, we must do so notwithstanding, because the record and evidence presented demonstrate that it is the right thing to do."

He also said it is his hope that, as these matters proceed, “everyone acknowledges that many providers, especially small businesses and those in rural America, did not do anything wrong by incorporating the problematic equipment into their networks.”

Ultimately, “the equipment allowed them to offer service to many Americans, and, in some areas, they may be the only broadband offering available. As we talk about ‘rip and replace’ or ‘remove and destroy,’ we must be aware that, in large part, this will look more like ‘duplicate and dismantle,’” he said.  

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The FCC’s order stopped short of requiring operators to show that they considered open Radio Access Network (RAN) technology before receiving replacement money, something Commissioner Geoffrey Starks said he would have preferred.

“To be clear, I would not have proposed a requirement that any provider adopt O-RAN, but I believe mandating that they consider it would have better promoted both innovation and efficient spending of reimbursement funds,” Starks said. “But even without that requirement, I am hopeful that today’s decision will help educate smaller carriers about the benefits of O-RAN and give them the confidence to make the leap if O-RAN makes sense for their businesses.”

Commissioner Jessica Rosenworcel also wants to see more support for open RAN. The FCC should establish open RAN testbeds that bring together operators, vendors, vertical interests and government agencies, she said.

Calls for monetary support

Trade groups, including the Competitive Carriers Association (CCA) that represents mostly smaller operators, were quick to release statements in support of the FCC's new rules. 

“The commissioners should be commended for unanimously recognizing the need for rolling reimbursement and providing guidance that carriers now can begin without jeopardizing their eligibility for reimbursement,” the CCA’s Berry said. “This challenging issue is of the utmost importance to affected carriers, and CCA continues to encourage Congress to fund the Reimbursement Program so that no American is left behind in the digital world.”

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The Telecommunications Industry Association (TIA) noted that the equipment replacement program, which the FCC has conditioned to congressional funding, carries out the agency’s mandate from the bi-partisan Secure and Trusted Communications Networks Act, unanimously passed on March 12, 2020.

"TIA members support the FCC’s order for this important program that will facilitate the replacement of network equipment that could pose a significant threat to our national security,” said David Stehlin, CEO of TIA, in a statement. “In the midst of a pandemic, we depend on our networks more than ever to keep us working and learning from home. We urge Congress to now appropriate the necessary funds and make this critical investment to ensure the security of our nation’s digital infrastructure."

The Rural Wireless Association (RWA) said the FCC’s actions move its members closer to being able to start the process of replacing Huawei and ZTE in their rural networks and called on Congress to provide the funding. The House appropriated $1 billion in July, but the Senate has yet to take action and both chambers must reconcile any differences as part of the omnibus budget reconciliation process in the next week, the RWA said. 

“The FCC’s Second Report & Order does not require the replacement of Huawei and ZTE equipment if the funding doesn’t materialize,” noted Carri Bennet, RWA’s general counsel, in a statement. “Having no assurance from Congress that funding will materialize to replace these networks has put our members on pins and needles and threatens their survival. It is disconcerting that Congress would unanimously pass legislation authorizing a reimbursement program to secure our nation's communications supply chain and then not take the necessary action to fund it.”