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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations
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Commission finds this scheme is most consistent with congressional intent and that it will allow, as Congress intended, all providers of advanced communications services to begin the necessary work of removing insecure communications equipment and services from their networks.
c. Decline To Prioritize Information Collection Participants 57. In choosing to adopt a pro-rata distribution method for the limited funds available in the Reimbursement Program, the Commission acknowledges a departure from earlier rules that prioritized non-ETCs who responded to the 2019 Information Collection Order.
The results of the information collection showed that ETCs with two million or fewer customers required $1.62 billion to remove and replace Huawei and ZTE
equipment from their networks. This figure did not account for other providers of advanced communications service that may be eligible to participate in the Reimbursement Program. Non-ETCs who voluntarily submitted cost estimates to remove and replace Huawei and ZTE equipment in their networks estimated they would require approximately $200 million to do so. The total estimated amount needed to remove and replace Huawei and ZTE equipment from the networks of ETCs and non-ETCs who voluntarily submitted cost estimates is $1.837
billion, a figure closely aligned with the actual amount appropriated by Congress in the CAA.
58. In the 2020 Supply Chain Order, the Commission prioritized non-ETCs who voluntarily submitted cost estimates over other non-ETC providers of advanced communications services.
The Commission found that it would be inequitable to allow these providers to go without funding simply because the costs of non-participating nonETCs were not reported and thus not considered. However, the CAA was enacted after the Commission adopted the 2020 Supply Chain Order, and the Commission sought comment on whether the language in the CAA
permitted it to adopt a preference to fund non-ETCs who responded to the 2019 Information Collection Order.
After reviewing the record, the Commission finds that the CAA does not require such a preference, and the Commission declines to implement one for the same reason that the Commission declines to prioritize ETCs or the replacement of core network equipment and services. Congress created a clear prioritization program that does not express a preference to fund non-ETCs who voluntarily submitted cost
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estimates over those that, for whatever reason, did not.
59. Mediacom strongly supports the Commissions proposed prioritization schedule in part because prioritizing non-ETCs that responded to the data collection over those that did not was arbitrary and unfair. Mediacom argues that many smaller providers, especially while dealing with the COVID19
pandemic, simply did not have the resources necessary to evaluate their entire network and respond to what they understood was a voluntary data collection while still meeting customer demands.
60. PTAFLA and RWA assert that the Commission should maintain this preference for non-ETCs who submitted cost estimates as part of the information collection. PTAFLA argues that Congress based its calculation of how much money to appropriate for the Reimbursement Program on the estimated expenses submitted by both ETCs and non-ETCs during the cost estimate process. PTAFLA thus claims ETCs and non-ETCs should be prioritized for funding to the extent of the estimates they submitted last year.
PTAFLA argues that this prioritization would recognize the fundamental fairness of prioritizing funding to parties who went to the expense and effort of creating a solid record to support Congressional funding. If the appropriated funds were insufficient to meet the demand for these groups, all parties would have to seek additional funding from Congress to make up the difference. RWA claims that, once ETCs receive their funding allocations, non-ETCs who participated in the Commissions information collection process should be next in line to be allocated funds . . . . RWA asserts that the non-ETCs who voluntarily submitted cost estimates did so in reliance on the Commissions indication that non-ETC estimates would assist in soliciting Congressional funding. RWA
argues the Commission should continue to prioritize these carriers who demonstrated candor before the Commission in presenting their costs, and most importantly, prioritized network security despite regulatory uncertainty. RWA proposes a new prioritization paradigm that allocates funds first to ETCs up to the original cost estimates, then to non-ETCs who submitted cost estimates up to those estimates, then to those providers who did not submit cost estimates. RWAs proposal would allow non-ETCs who participated in the information collection to receive funding allocations immediately after the Commission
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allocates funding to ETCs with two million or fewer customers.
61. The Commission rejects these arguments as inconsistent with its mandate to distribute Reimbursement Program funds equitably amongst all applications. Although the Commission appreciates the time and expense that non-ETCs undertook to prepare their voluntarily replies to the 2019
information collection, Congress created a scheme that declined to prioritize these carriers. The Commission must comply with the statute as written and decline to prioritize non-ETCs who voluntarily submitted cost estimates.
d. Decline To Prioritize Equipment Posing Elevated National Security Risks 62. In the 2021 Supply Chain Further Notice, the Commission sought comment on whether to prioritize, within each category, the removal and reimbursement of certain equipment or services at particular locations identified as posing an elevated national security risk by the Commission or other federal agencies or interagency bodies . . . . The Commission asked whether certain national security threats warranted swift action to remove and replace equipment and services at various locations around the country.
The Commission also sought comment on whether national security concerns would justify the Commission prioritizing the removal and replacement of equipment and services at certain locations ahead of its prioritization in the CAA.
63. After reviewing the record, the Commission declines to adopt a prioritization for certain equipment and services at particular locations that may pose an elevated national security risk.
The Commission does not find express support for such a prioritization in the CAA and, as PTAFLA commented, if Congress had intended to prioritize the removal and reimbursement of certain equipment or services at particular locations . . . it would have said so rather than setting explicit priority categories . . . . USTelecom and Niki N. agree. USTelecom argues the Commission would clearly violate the CAA and frustrate the intent of Congress if, for any reason, it prioritizes any equipment or services in a lower priority category ahead of . . . a higher prioritization category. Niki N.
contends that they do not believe the Commission should prioritize equipment and services at locations that pose a heightened national security risk in a lower priority category ahead of any equipment and services in a higher prioritization category.

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