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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations carrier may have in keeping such information confidential. The Commission rejects NCTAs argument to the contrary. NCTA argues that because the Secure Networks Act directed that status updates under the reimbursement program would be made public under section 4d8 while remaining silent on whether the section 5 results should be made public, Congress intended that section 5 results remain confidential.
The Commission disagrees. Instead, Congress provided the Commission with significant discretion as to the form and manner of these reports, and it believes the public interest in knowing whether covered communications equipment and services acquired after August 14, 2018 are in providers of advanced communications service networks outweigh any countervailing interest of the provider in keeping such information confidential. Moreover, at the time it passed the Secure Networks Act, Congress was aware of the Commissions intention to publish a list of ETCs with Huawei and ZTE
equipment in their networks based on the 2019 Supply Chain Information Collection Order, and the Commission believes Congresss silence as to whether the section 5 results should be made public is better interpreted as endorsing a similar approach to the 2019 Supply Chain Information Collection Order rather than NCTAs reading. Other information, such as location of the equipment and services;
removal or replacement plans that include sensitive information; the specific type of equipment or service;
and any other provider specific information will be presumptively confidential. The Commission believes that this information would likely qualify as trade secrets under the Freedom of Information Act.
200. The Commission directs OEA to administer the collection, which includes creating a form for submission through an online portal. The form will require that all providers certify that the information provided is true and accurate subject to federal regulations.
The form will have the option for providers to certify that they do not have any covered equipment and services. Those providers that certify that they do not have any covered equipment and services will not need to refile annually unless circumstances change, and they acquire any of these covered equipment and services or if equipment they currently use is subsequently added to the Covered List.
However, a provider of advanced communications service that certifies that its network does have covered
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equipment or services will need to continue to file an annual report, including the justification, until the provider can certify that its network no longer contains covered equipment or services. The Secure Networks Act only allows entities that respond to the information collection with a negative response to cease filing unless their subsequently purchase, rent, lease, or obtain covered communications equipment and services.
201. The Commission reiterates that this information collection requirement does not have any effect on the 2019
Supply Chain Information Collection Order and its subsequent results. The 2019 Supply Chain Information Collection Order has closed, and the Commission has publicly reported its results. The results of the 2019 Supply Chain Information Collection Order helped inform the Commission of the extent of Huawei and ZTE equipment in its communications networks and provided information about the cost of replacing such equipment. USTelecom argues that the Secure Networks Acts information collection should supersede the 2019 Supply Chain Information Collection Order, but that argument has been mooted by the release of results from the 2019 Supply Chain Information Collection Order. Moreover, the 2019 Supply Chain Information Collection Order and the new information collection are distinct. The new information collection, as required by Congress in the Secure Networks Act, will inform the Commission and public about advanced communications service provider action regarding covered communications equipment or services on or after August 14, 2018. As the Commission explained in the 2020
Supply Chain Second Further Notice, the 2019 Supply Chain Information Collection Order only covered ETCs.
ETCs were required to report any Huawei and ZTE equipment and services in their networks, or their subsidiaries or affiliates, regardless of when they were obtained.
202. Effective Date. For the first annual filing, certified responses to this information collection from providers of advanced communication service will be due through the portal no later than 90 days after OEA issues a public notice announcing the availability of the new reporting portal. Although the Commission proposed a six-month window in the proposed rules appendix of the 2020 Supply Chain Second Further Notice, a 90-day period would provide the Commission and the public with quicker notification of potential security risks to U.S. communications networks. The Commission finds that a
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90-day period is sufficient time for providers to complete the first annual report for two reasons. First, it will likely take OEA time to prepare the portal for the annual submissions. The Commission expects providers of advanced communications service to begin work for the certification and reporting requirement before OEA
issues the Public Notice, providing sufficient time for providers to gather the information when added to the 90
days after the Public Notice is published. Second, 90 days is roughly consistent with the amount of time the Commission gave ETCs, their subsidiaries, and affiliates, to comply with the first information collection, including an extension of time to respond. Thereafter, all providers of advanced communications service required to comply with this information collection must submit their certified response through the portal no later than March 31 for the previous year.
203. Based on presently available information obtained through the Commissions Information Collection, the Commission estimates the cost of requiring the removal and replacement of covered equipment and services within the next two years to be $1.8
billion for all ETCs. In the 2019 Supply Chain Order, the Commission preliminarily estimated the total cost to be between $600 million and $2 billion dollars. Not all of that amount, however, is subject to reimbursement. The ETCs that appear to initially qualify for reimbursement under the Secure Networks Act report it would require approximately $1.6 billion to replace their equipment. Yet, as the Commission concluded in the 2019
Supply Chain Order, it finds that the affected equipment has a 10-year life and that this Order will impact investment decisions starting in 2021.
The Commission therefore expects to see some replacements, like those normally occurring under attrition at the end of both 2020 and 2021, covering two years and including up to 20% of the original equipment. Hence, the Commission expects the required replacement costs for the Huawei or ZTE asset base occurring at the end of the period for all ETCs may be as low as $1.5 billion i.e., about 80% of $1.8
billion and the reimbursement amount for qualifying ETCs may be as low as $1.3 billion i.e., 80% of $1.6 billion.
204. The Commission nonetheless concludes that, even if total replacement cost is as high as $1.8 billion reported by all ETCs, that cost will be far exceeded by the benefits obtained by addressing the important national
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