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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations
to comply nor the procedures for certifying compliance. In the 2020
Supply Chain Order, the Commission stated that both ETCs receiving USF
support and recipients of Reimbursement Program funding are required to remove and replace from their networks covered communications equipment and services. While the expansion of eligible participants in the Reimbursement Program now includes providers of advanced communications service with 10 million or fewer customers, which, as stated herein, will encompass the vast majority of providers, participation in the Reimbursement Program remains voluntary. If a provider of advanced communications service decides to apply to the Reimbursement Program, it expressly agrees to permanently remove and dispose of covered communications equipment or services. Similarly, the Tenth Circuit has held that the Commission may specify what a USF
recipient may or must do with the funds, consistent with the policy principles outlined in section 254b of the Communications Act, and designation as an ETC and participation in universal service programs is voluntary. Providers currently designated as ETCs and that participate in USF programs may relinquish their ETC status or decline to participate in USF programs should they wish to avoid compliance with its rules.
34. Compliance with its mandate to remove and replace covered communications equipment and services as described herein continues to apply to ETCs receiving USF support, in addition to participants in the Reimbursement Program, as a condition of receiving universal service or reimbursement funding, respectively.
The CAA amendments did not modify those obligations. As such, the Commission will continue to require ETC recipients of universal service funding to certify that they have complied with the remove and replace requirement for the new scope of covered equipment and services from the Covered List and as defined in the 2019 Supply Chain Order or subject to the designation process in section 54.9
of the Commissions rules and the Designation Orders, as established in the 2020 Supply Chain Order.
35. The Commission clarifies that the remove-and-replace rule extends only to equipment or services on the Covered List that have also been produced or provided by companies that have been designated by the Public Safety and Homeland Security Bureau as posing a national security threat to the integrity of communications networks or the
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communications supply chain.
Consistent with its original remove-andreplace rule, any future remove-andreplace obligation for additional designations that are included on the Covered List will be contingent on the existence of funding to remove and replace the equipment or services produced or provided by such designated covered company. If the Public Safety and Homeland Security Bureau makes any such future final designations, following any appropriations to fund the removal and replacement of equipment or services produced or provided by those covered companies, the Commission will require ETCs receiving USF support to remove equipment and services produced or provided by designated companies that are on the Covered List before they are next obligated to certify that they have removed all covered equipment and services from their networks on their applications for any USF support. The process for announcing an initial designation provides adequate notice that ETCs receiving USF support may be required to remove equipment and services from that company, should a final designation be issued.
C. Timing Requirement for the Reimbursement Program 36. The Commission next amends the Reimbursement Program rules to allow recipients to use reimbursement funds to remove, replace, or dispose of any equipment or services that were purchased, rented, leased, or otherwise obtained on or before June 30, 2020, consistent with the CAAs amendments to the Secure Networks Act. Currently, pursuant to section 4c2A of the original Secure Networks Act, its rules prohibit Reimbursement Program recipients from using such funds to remove, replace, or dispose of equipment and services obtained, in the case of any covered communications equipment or service that is on the initial Covered List published pursuant to section 2a of the Secure Networks Act, on or after August 14, 2018, or, in the case of any covered communications equipment or service that is not on the initial Covered List published pursuant to section 2a, the date that is 60 days after the date on which the Commission places such equipment or service on the Covered List. The CAA however, amends the Secure Networks Act to allow recipients of Reimbursement Program funding to use such funding on equipment and services purchased before June 30, 2020, the date that the Public Safety and Homeland Security Bureau issued the Designation Orders.
The Commission amends its rules to
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satisfy the new timing for eligible equipment and services set forth in the CAA amendments.
37. The clear language of the CAAs amendment to section 4c2A of the Secure Networks Act establishing June 30, 2020 as the eligibility cutoff date compels the Commission to modify its rules. The amended cutoff date for eligible equipment and services is also consistent with the Public Safety and Homeland Security Bureaus orders designating Huawei and ZTE as companies that pose a national security threat to the integrity of communications networks or the communications supply chain.
Following initial designations adopted in the 2019 Supply Chain Order, the Public Safety and Homeland Security Bureau issued final designations of Huawei and ZTE on June 30, 2020, pursuant to section 54.9 of the Commissions rules. When setting the effective date of Huaweis final designation as immediately upon release of the Huawei Designation Order, the Public Safety and Homeland Security Bureau concluded that the risks to its national communications networks and communications supply chain posed by Huaweis equipment necessitate immediate implementation of its designation. The Public Safety and Homeland Security Bureau relied on a similar justification for the immediate effective date of ZTEs final designation. Therefore, as of June 30, 2020, USF support could no longer be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by Huawei or ZTE.
38. In addition to being statutorily mandated, the June 30, 2020 cutoff date for equipment and services initially eligible for removal, replacement, and disposal under the Reimbursement Program advances the Commissions goals of removing vulnerable equipment from its nations communications networks. Additional equipment and services from designated companies that may have been legally purchased or deployed into networks between 2018
and June 30, 2020 are now eligible for reimbursement, thus ensuring their effective removal from the networks of participants in the Reimbursement Program. Furthermore, by amending the eligibility cutoff to June 30, 2020, Congress intended to establish the Designation Orders as a clear delineation for what equipment and services would be eligible for reimbursement. Consistent with the Commissions rules, Congress did not intend to allow providers to seek reimbursement for equipment
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