UPDATE The FCC says it has the rest of the money in hand for the Rip & Replace program. In December, Congress authorized the Commission to borrow up to an additional $3.08 billion from the U.S. Treasury to reimburse small carriers for removing, replacing and disposing of what the federal government deemed insecure network equipment from Huawei and ZTE.
On Tuesday, the FCC’s Wireline Competition Bureau said it “has now borrowed the full amount authorized” under the law. The bureau said the Commission has made “a further allocation of funding” available to Rip-and-Replace recipients.
The program “supports the critical work of removing insecure equipment and services from our nation’s networks. With this further allocation, recipients should be able to move swiftly to fulfill their removal, replacement, and disposal work,” the bureau said.
Up until now, the FCC has only been able to pay carriers about 40 cents on the dollar of what they were due for reimbursement due to the more than $3 billion shortfall. Congress initially only allocated $1.9 billion for the program. The situation had dire consequences for the Priority 1 telecoms, those with two million or fewer customers, the agency said in 2023. Thirty telecoms submitted a total of 1,988 reimbursement claims. The FCC approved just over $40 million to be paid out.
Telecoms cited four main problems to completing the work: lack of money, supply chain delays, labor shortages and weather-related challenges. Nearly half cited long delays between when they placed an order and received new equipment. Price increases and more competition for replacement gear make it harder to source alternatives.
Telecom trade lobbies brought the shortfall to the attention of Congress, Inside Towers reported. NATE: The Communications Infrastructure Contractors Association, joined other trade associations such as CCA, WIA and RWA, in a 2023 letter to the House Armed Services Committee, urging lawmakers to fully fund the program. “Carriers cannot complete the job without full funding,” the associations wrote. “They have been largely prohibited from servicing or upgrading their networks for years, increasing chances for network degradation or even failure, and leaving their communities behind as technology evolves to 5G and beyond. The FCC cannot provide additional resources for this program – only Congress can provide funding to resolve the shortfall.”
By Leslie Stimson, Inside Towers Washington Bureau Chief
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