The FCC’s Rip & Replace reimbursement program is limping along as the last Congress failed to pass a bill to address the program’s funding shortfall. In a report the agency sent to Congress this week on the reimbursement situation, many of the small, rural carriers trying to remove Huawei and ZTE gear, now deemed untrusted, are stuck.
Congress mandated the removal of untrusted telecom network gear in 2019, and passed a bill authorizing $1.9 billion in reimbursement funds. But then it expanded the program, and in July, the FCC said there’s a more than $3 billion shortfall. That meant that so far, telecoms have only been reimbursed for about 40 percent of their costs.
The situation has had dire consequences for the Priority 1 telecoms, those with two million or fewer customers. Thirty telecoms submitted a total of 1,988 reimbursement claims. The FCC approved just over $40 million to be paid out.
The agency says based on status reports filed in October, it appears many participants have begun some of the work to remove, replace and dispose of the untrusted gear. But they face challenges that hinder their ability to start or finish that work within the one-year timeframe Congress allowed.
The FCC estimates around 83 percent of recipients have made some progress but have not finished the work. Some 15 percent told the Commission they can’t begin without more money. Roughly two percent of recipients have completed the work. Another two percent will not begin the work until they receive funds.
Telecoms cite four main problems: 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.
“Roughly three in ten respondents reported challenges with labor shortages and one quarter of respondents reported challenges with weather that impacted their efforts to work toward the removal, replacement, and disposal of covered communications equipment and services,” the FCC told Congress.
Inside Towers reported that several telecom associations — including CCA, NATE and WIA — banded together to urge lawmakers to pass a measure to authorize the money as part of the fiscal 2023 omnibus spending bill. They explained that impacted carriers had begun the “Rip & Replace” process at the direction of Congress and the FCC, “committing and expending significant resources in good faith reliance” that the reimbursement program would be fully funded. They stressed that beyond planning, some carriers cannot begin implementation until more funding is available or they risk being stuck mid-stream with no path forward and no path back.”
Since legislation authorizing the additional money didn’t pass in the 117th session of Congress, it must be re-introduced in the new session. That hasn’t happened as of this week.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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