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Federal Register / Vol. 86, No. 166 / Tuesday, August 31, 2021 / Rules and Regulations
the Secure Networks Act. Consistent with the CAA, as implemented by the 2021 Supply Chain Order, participation in the Reimbursement Program is limited to providers of advanced communications service with 10 million or fewer customers. As the Commission determined in the 2020 Supply Chain Order, 86 FR 2904, January 13, 2021, December 11, 2020, customers is interpreted to include customers of the applicant and customers of any affiliate taking advanced communications service from the provider and its affiliates as of the date the application is filed. Eligibility to participate in the Reimbursement Program is limited to providers of advanced communications service, which is defined as providers of high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology with connection speeds of at least 200 kbps in either direction. A
school, library or health care provider, or consortium thereof, providing facilities-based non-commercial educational broadband service connections of at least 200 kbps in one direction would qualify as a provider of advanced communication service for the purposes of the Reimbursement Program and is eligible for reimbursement funding. The Commission in the 2021
Supply Chain Order, also modified the scope of covered communications equipment and services eligible for Reimbursement Program support consistent with the amendments to the Secure Networks Act by the CAA. The modification limits eligibility for reimbursement to communications equipment or services produced or provided by Huawei or ZTE obtained on or before June 30, 2020.
18. The Bureau will review, with the assistance of the Reimbursement Program Fund Administrator, Application Requests for Funding Allocation to verify Reimbursement Program eligibility as required by the Commissions rules. The Application Request for Funding Allocation contains questions to assist with Reimbursement Program eligibility verification. For example, each applicant must answer yes or no as to whether it is a provider of advanced communications service with 10 million or fewer customers. Applicants must also indicate yes or no to whether they have obtained covered communications equipment or service eligible for Reimbursement Program support on or before June 30, 2020. In addition,
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applicants are required to identify the eligible covered communications equipment or service that they intend to remove, replace, and dispose of with Reimbursement Program support by site location.
19. The standard the Commission adopted to determine whether a provider is classified as a provider of advanced communications service is the same standard used to determine whether a provider must file FCC Form 477 to report broadband deployment data, i.e., the provision of a facilitiesbased broadband connection to an end user with a speed of at least 200 kbps in either direction. Accordingly, as part of the Bureaus internal verification process, it will cross-check applicants against the list of FCC Form 477 filers as of the most recent filing deadline.
Applicants not identified on the most recent FCC Form 477 filer list may need to provide additional information to support Reimbursement Program eligibility in response to a Reimbursement Program Fund Administrator request for information.
20. The Bureau finds the validation of eligibility using FCC Form 477 filing information, coupled with requesting additional information evidencing eligibility where an entity has not recently filed an FCC Form 477, appropriate in our efforts to ensure the Reimbursement Program supports providers of advanced communications services with 10 million or fewer customers and protect against waste, fraud, and abuse.
21. As required by the Secure Networks Act and the Commissions rules, the Application Request for Funding Allocation requires applicants to submit initial estimates of costs reasonably incurred for the permanent removal, replacement, and disposal of covered communications equipment or services. Both the Secure Networks Act and the Commissions rules require applicants to provide cost estimates in their applications. The Secure Networks Act specifically states that the Commission shall require an applicant to provide an initial reimbursement cost estimate at the time of application, with supporting materials substantiating the costs, which the Commission may require an applicant to . . . update, and submit additional supporting materials.
22. To help applicants submit cost estimates with their applications, the Commission permitted applicants to rely on estimated costs identified in the Catalog, which contains categories of quantifiable costs typically incurred in the removal, replacement, and disposal process. For costs not covered by the
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Catalog, or if applicants want to use a cost estimate that differs from the Catalog, the applicant can instead provide an individualized cost estimate supported by documentation e.g., vendor quotes. The finalization of the Catalog is discussed in Part III.B of the PN, but here the Bureau addresses the proposals and comments related to the submission of cost estimates generally.
23. Technology Upgrades. In the 2021
Supply Chain Order, the Commission clarified that the costs reasonably incurred standard . . . makes providers responsible for the additional incremental cost of funding upgrades that exceed what is reasonably necessary to transition to a comparable replacement. The Commission acknowledged that whether an upgrade is a reasonable, comparable replacement necessary for the transition to a replacement will likely depend on the facts in each case. The Commission directed the Bureau, with the assistance of the Reimbursement Program Fund Administrator, to first consider whether the cost is typically incurred when transitioning from covered communications equipment and services to a replacement. Other factors the Bureau may consider include the costs in relation to the alternative equipment and services and the capabilities and functions performed by the replacement equipment and service as compared to the equipment and services removed.
24. As provided in the 2021 Supply Chain Order, participants may obtain Reimbursement Program support for an amount equivalent to the cost estimate of a comparable replacement.
Participants electing to upgrade their equipment or service in excess of the costs of a comparable replacement, however, bear the difference in cost between the comparable replacement and the technology upgrade.
Participants seeking funding for a technology upgrade in excess of the costs of a comparable replacement will be required to provide price quotes for the comparable replacement with their Application Request for Funding Allocationthey may not rely on the cost estimates contained in the Catalogand they must also separately certify that the cost estimate is made in good faith.
25. While the Commission encourages providers to upgrade their networks, Congress directed the Commission to preclude network upgrades that go beyond the replacement of covered communications equipment or services from eligibility. Providers are responsible for the additional incremental costs of funding upgrades
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