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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations depend on the facts in each case. The Commission expects the Wireline Competition Bureau, with the assistance of the Fund Administrator, will first consider whether the cost is typically incurred when transitioning from covered communications equipment and services to a replacement. Other factors the Wireline Competition Bureau and Fund Administrator may consider when determining whether a change is necessary, reasonable, and comparable are the costs in relation to alternative equipment and services and the capabilities and functions performed by the replacement equipment and services as compared to the equipment and services removed.
80. As a general matter, the Commission does not consider replacing microwave backhaul with fiber backhaul or replacing last-mile fixed wireless links with fiber-to-the-premises FTTP necessary for the removal, replacement, and disposal of such communications equipment or service produced or provided by Huawei and ZTE that is listed on the Covered List.
The Rural Wireless Broadband Coalition states that higher-capacity fiber backhaul is needed to support the replacement of older technology networks with 5G ready equipment that is subsequently made 5G operable by a provider. Santel would like to replace its four transmitters with an FTTP
wireline network serving 850 customers to provide a far better quality service that even exceeds 5G wireless solutions. In either case, the Commission fails to see how such expenses are reasonably necessary to the removal, replacement, and disposal of covered communications equipment or services eligible for reimbursement.
Moreover, the cost of replacing microwave with fiber backhaul and fixed wireless links to end users with FTTP would likely greatly exceed the cost of other wireless alternatives. As the Commission stated in the C-Band proceeding, relocation support is not intended to provide a means of funding an incumbents . . .
transition to fiber and while a transition to fiber in some cases may be a more efficient or desirable approach for certain . . . operators, incumbents would only be reimbursed for the reasonable costs of relocating existing services. . . . This same rationale applies to the Reimbursement Program.
Accordingly, the Commission will generally view fiber link replacements as a technology upgrade and not a reasonable, comparable replacement.
81. Participants may obtain Reimbursement Program support for an amount equivalent to the cost estimate
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of a comparable replacement. If, however, a participant ultimately decides to upgrade to a higher quality, more advanced, non-comparable replacement, then the program participant will bear the difference in cost between the comparable replacement and the technology upgrade solution chosen. When Reimbursement Program participants seek to replace eligible covered communications equipment or service with a technology upgrade in excess of the costs of a comparable replacement, they will need to provide price quotes for the comparable replacement with their Application Request for Funding Allocation and may not rely on the cost estimates contained in the Catalog of Eligible Expenses Catalog. This approach is consistent with the Commissions treatment of situations where the estimated cost is not provided in the Catalog, and the applicant must provide additional documentation to support the identified cost estimate.
They will also need to separately certify, as already required by the Commissions rules, that the estimated cost is made in good faith.
82. Price quotes will provide a more accurate estimation of costs for funding allocations than using the Catalog when participants request a technology upgrade and will help address concerns about inflated cost estimates and the over allocation of support. The Commission anticipates the Catalog largely reflects list prices, and not the amount providers will actually pay after any purchasing discounts are applied.
While the Catalog reduces burdens for the applicant during the submission process, reliance on it in some circumstances could result in the overestimation of cost, and the overallocation of support. Accordingly, to ensure more accurate cost estimates and to minimize the over-allocation of funding, the Commission clarifies that it will treat requests for reimbursement towards a technology upgrade as outside the scope of the Catalog. Applicants seeking support when completing a technology upgrade will need to provide their own cost estimates for a comparable replacement with price quotes.
83. Costs Reasonably Incurred Handset Upgrades. The Commission rejects RWAs request that the Commission add VoLTE compatible replacement subscriber handsets to its Catalog and permit recipients of the Reimbursement Program to replace consumer handsets. RWA argues that the subscribers of some potential applicants of the Reimbursement Program have only CDMA-capable
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handset devices and those devices would need to be replaced because the handsets will not be compatible with a newer technology replacement network.
RWA thus seeks reimbursement for the replacement cost of non-Huawei and ZTE handsets that will no longer be compatible with replacement networks.
The Commission finds CDMA-capable handsets not produced or provided by Huawei or ZTE ineligible for reimbursement under the Reimbursement Program rules because replacing such handsets with VoLTE
compatible subscriber handsets is not reasonably necessary to the removal, replacement, and disposal of covered communications equipment or service.
84. The Reimbursement Program has limited funding aimed at securing its nations communication networks from national security threats. Expanding the scope of reimbursement eligibility to include subscriber mobile handheld devices not produced or provided by Huawei or ZTE threatens to detract substantial funding away from the core mission of securing the nations networks. Handsets and other customer premises equipment, including Internet of Things devices, used by end users to access and utilize advanced communications services are distinctly different from the cell sites, backhaul, core network, etc. used to operate a network and provide advanced communications services. Consumers typically choose on their own to upgrade their mobile handsets every two years on average absent any network transition, and newer comparable replacement networks are often backward compatible with older technology handsets with some limited exceptions. Accordingly, the Commission finds the replacement of non-Huawei or ZTE mobile devices not reasonably necessary to the removal, replacement, and disposal of covered communications equipment or service.
Additionally, without detailed information as to the handset models end users own, it is unclear whether a transition to a newer technology network will prevent those users from accessing the network. Similar to any network upgrade, the Commission anticipates providers will assist their customers with incompatible handsets to upgrade as necessary to mitigate any disruptions in service if for some reason their handsets are not compatible with the new network.
85. Filing Window. Consistent with the Secure Networks Act, the Commission established an application process for Reimbursement Program participation in the 2020 Supply Chain Order. To participate in the
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