FCC Chairwoman Jessica Rosenworcel on Friday told congressional leadership the agency has finished reviewing applications for the Rip & Replace reimbursement program. Out of the 181 total applications, 122 were considered “deficient” and the agency gave those applicants more time to amend their paperwork. It reviewed the updated information by its self-imposed Friday deadline.
Congress initially allocated $1.9 billion to reimburse carriers for removing untrusted gear from Huawei and ZTE from their networks. The FCC initially projected it would need $5.6 billion, based on its early review of 181 applications from 96 entities, Inside Towers reported. Now, after thoroughly reviewing the applications, the Commission says the total shortfall is actually $5.88 billion.
To fund all “reasonable and supported” cost estimates within the first prioritization group and cover administrative expenses, the reimbursement program will require $4.7 billion, reflecting a current shortfall of $2.8 billion, according to Rosenworcel. To reimburse cost estimates within the first and third prioritization groups and cover administrative expenses, the program will require $4.98 billion, reflecting a current shortfall of $3.08 billion. There are no applications that fall within the second prioritization category.
How Funding Allocations Would Work
Under the law set out by Congress, the FCC would allocate funding first to approved applicants that have 2 million or fewer customers. Then, it would proceed to approved applications from accredited public or private non-commercial educational institutions providing their own facilities-based educational broadband services and from health care providers and libraries providing advanced communications services. The last allocations would be made to any remaining approved applicants.
“Absent an additional appropriation, the Commission will apply the prioritization scheme Congress specified,” wrote Rosenworcel. “Because demand within the first prioritization group exceeds available funds for the reimbursement program, the Commission will prorate reimbursement funds equally to each eligible applicant in the first prioritization group. The pro-rata factor for those allocations will be approximately 39.5 percent of demand.”
As allocations are issued in the coming days, the Commission will proceed to administer the next phases of the reimbursement program, including processing claims submitted by carriers as they work to permanently remove unsecure communications equipment and services from their networks.
Additional money may be coming. The House Commerce Communications and Technology Subcommittee last week passed to the full House a bipartisan measure to devote a portion of future FCC spectrum auction proceeds to remedy the shortfall in the Rip & Replace reimbursement program.
Competitive Carriers Association President/CEO Steve Berry saw the update as a call to action. “[I]mpacted carriers must have appropriate resources to remove and replace untrusted network equipment without disrupting service or negatively impacting customers. Adequate funding must be provided for the program, and CCA looks forward to continued work with policymakers to ensure this goal is achieved.”
By Leslie Stimson, Inside Towers Washington Bureau Chief
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