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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations
Networks Act on the proposed reimbursement program in April 2020.
Only three parties commented on this issue with WTA generally supporting the prioritization of ETCs receiving USF
support over other providers, NetNumber suggesting the Commission use funding caps based on the type of service provider and the nature of the project, and RWA asking the Commission to prorate reimbursement where each recipient gets a set percentage of the appropriated funding.
140. The Commission decides to establish a prioritization paradigm in the event the estimated costs for replacement submitted by the providers during the initial or any subsequent filing window in the aggregate exceed the total amount of funding available as appropriated by Congress for reimbursement requests. The Commission finds prioritization preferable to the alternatives suggested by NetNumber and RWA. Capping fund amounts depending on the nature of the removal, replacement, and disposal project and service provider type presents added complexity to the allocation process and fails to ensure
demand will not exceed the total amount of available funding as the number of requests are unlimited.
NetNumber suggests the Commission use funding caps but ensure fair compensation for the full deployment cost for replacement equipment. If there is no limit on the number of requests filed, then NetNumbers approach could lead to a funding deficit as the total demand, even when using a capped funding approach, could exceed the total amount of available funding.
The Commission also finds that prorating support equally among all participants based on a set percentage of available funding, as the only means of allocating support, fails to account for the individual needs of the applicants and runs counter to the directive in the Secure Networks Act.
141. Under the prioritization scheme the Commission adopts, it will first allocate funding to eligible providers that are ETCs subject to a remove-andreplace requirement under the Commissions rules. If funding is insufficient to meet the total demand from this subcategory of eligible providers, then the Commission will
prioritize funding for transitioning the core networks of these eligible providers before allocating funds to non-core network related expenses, including reasonable costs incurred for removing, replacing, and disposing of a providers radio access network. The Catalog of Eligible Expenses cost catalog will include additional detail as to what are considered core and non-core network related expenses. If after allocating support to ETCs for both core and noncore network expenses funding is still available, the Commission will then allocate funding to non-ETC eligible provider applicants, prioritizing those non-ETCs that provided cost estimate data in response to the Commission Supply Chain Security Information Collection over other non-ETCs. The Commission will further prioritize funding for core network transition costs over non-core network transition costs within each non-ETC category. If available funding is insufficient to satisfy all requests in a certain prioritization category, then the Commission will prorate the available funding equally across all requests falling in that category.

FUNDING PRIORITIZATION CATEGORIES
Priority 1: Advanced communications service providers with 2 million or fewer customers that are Eligible Telecommunications Carriers subject to section 54.11 new removal and replacement requirement.
Priority 2: Non-ETC providers of advanced communications service with 2 million or fewer customers that participated in the Supply Chain Security Information Collection, OMB Control No. 30601270.
Priority 3: Other non-ETC providers of advanced communications service with 2 million or fewer customers.

Priority 1a: Costs reasonably incurred for transitioning core networks.
Priority 1b: Costs reasonably incurred for noncore network transition.
Priority 2a: Costs reasonably incurred for transitioning core networks.
Priority 2b: Costs reasonably incurred for noncore network transition.
Priority 3a: Costs reasonably incurred for transitioning core networks.
Priority 3b: Costs reasonably incurred for noncore network transition.

If available funding is insufficient to satisfy all requests in this prioritization subcategory, then prorate the funding available equally among all requests in subcategory.

142. In considering prioritization of funding, the Commission interprets the Secure Networks Act as requiring it to make reasonable efforts to treat all applicants on a just and fair basis while accounting for the applicants individual circumstances. Accordingly, the Commission may find some applicants have a greater and more urgent need for funding than other applicants. The Commission thus does not interpret the statute as requiring equal funding or treatment but instead requiring it to make reasonable efforts to treat similarly situated applicants fairly.
143. While the presence of covered communications equipment or services threatens network security for all eligible providers equally, the Commission finds ETCs who are
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receiving USF support stand in a different position vis-a-vis other providers. Congress and the Commission have undertaken significant efforts over the twenty-plus years to subsidize the costs of ETCs to provide service in high-cost, hard-toserve areas to facilitate universal access to essential telecommunications and broadband services to all Americans.
And these efforts have borne fruit, resulting in the affordable availability of essential communications services for hard-to-reach Americans. ETCs in many instances represent the only provider of such services in the most rural areas of our country. Accordingly, the Commission finds the protection of ETC
networksnetworks which are funded through USF and serve on the front
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lines of providing universal service from national security threats to be of the utmost importance. PTAFL does not expressly advocate an alternative prioritization approach but notes, without citing any statistics, that some non-ETCs are also sole source providers.
PTAFL also states non-ETCs have a greater need for reimbursement support than ETCs because their covered equipment was acquired without using USF support. Notwithstanding these assertions, the Commission has made a substantial investment to help ETCs provide service in areas where the economics often do not support viable service offerings. Facing the possibility of service disruptions absent continued support due to the remove-and-replace prohibition the Commission adopts, it
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