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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations
This is a synopsis of the Commissions Third Report and Order in WC Docket No. 18
89; FCC 2186, adopted July 13, 2021
and released July 14, 2021. Due to the COVID19 pandemic, the Commissions headquarters will be closed to the general public until further notice. The full text of this document is available at the following internet address: https
www.fcc.gov/document/fcc-acts-protectnational-security-communicationssupply-chain-0.

SUPPLEMENTARY INFORMATION:

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I. Introduction 1. The Federal Communications Commission Commission continues to play a leading role protecting the security of its communications networks and communications supply chain.
Securing its nations networks from those who would harm the United States and its people is more important than ever due to the outsized impact that the internet has on its work, education, health care, and personal connections. Recognizing this reality, and the damage that attacks on these networks can and do cause, today the Commission modifies its rules to incorporate the Consolidated Appropriations Act, 2021 CAA
amendments to the Secure and Trusted Communications Networks Act of 2019
Secure Networks Act.
2. Specifically, in response to several sections of the CAA that provide additional guidance for and direct changes to the Commissions Secure and Trusted Communications Networks Reimbursement Program Reimbursement Program, the Commission adopts several changes to the program rules. The Commission first increases the customer eligibility cap for participation in the Reimbursement Program. The Commission also modifies the type of equipment and services eligible for reimbursement and adjust the date by which equipment or services must have been obtained to be eligible for Reimbursement Program funds. The Commission further adopts the prioritization scheme created in the CAA and clarify the definition of provider of advanced communications service for purposes of the Reimbursement Program. Finally, the Commission clarifies portions of the Reimbursement Program to assist eligible providers as they prepare to seek reimbursement.
II. Report and Order 3. After reviewing the record, the Commission implements several of the Commissions proposals to incorporate the CAAs amendments to the Secure Networks Act into its rules. Specifically,
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the Commission revises the eligibility to participate in the Reimbursement Program to providers of advanced communications service with 10 million or fewer customers; amend the scope of equipment and services that Reimbursement Program participants may use funding to remove, replace, or dispose; adjust the cutoff date for equipment and services eligible for reimbursement; adopt the CAAs prioritization scheme for distributing reimbursement funding; clarify the definition of provider of advanced communications service; and clarify various aspects of the Reimbursement Program.
A. Eligibility for Participation in the Reimbursement Program 4. The Commission first amends its rules to allow providers of advanced communications service with 10 million or fewer customers to participate in the Reimbursement Program, consistent with the Secure Networks Act, as amended by the CAA. Prior to enactment of the CAA, its rules limited Reimbursement Program eligibility to providers of advanced communications service with two million or fewer customers, in line with the participation restriction in section 4b1 of the Secure Networks Act. In the CAA, however, Congress amended the Secure Networks Act to expand eligibility to providers of advanced communications service with 10 million or fewer customers. The rule revisions the Commission adopts today align eligibility for participation in the Reimbursement Program with the congressional directives in the CAA.
This approach is also supported by comments in the record.
5. In the 2020 Supply Chain Order, 86
FR 2904 January 13, 2021, the Commission defined customer of a provider of advanced communications service as the customer of such provider as well as the customer of any affiliate of such provider. The Commission further defined affiliate as a person that directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, another person. The Commission maintains the definition of customer as interpreted in the 2020 Supply Chain Order as those taking advanced communications service from the provider and/or its affiliate. As such, eligibility in the Reimbursement Program shall continue to be determined based on the number of customers to the specific advanced communications service offered by the provider and/or its affiliate, as set forth in the 2020 Supply Chain Order.

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6. Increasing the number of providers of advanced communications service eligible for the Reimbursement Program has important benefits. First, it will advance the Commissions goals of removing vulnerable equipment and services from its nations communications networks by eliminating covered equipment and services from the networks of more providers. LATAM
Telecommunications, LLC LATAM
agrees, arguing that by expanding eligibility, in conjunction with the CAAs reimbursement prioritization scheme, Congress has given the Commission flexibility to secure a greater number of networks throughout the communications ecosystem. While the vast majority of providers of advanced communications service participating in the Reimbursement Program are expected to have fewer than two million customers, increasing the number of providers eligible for reimbursement will ensure the removal of covered equipment and services from a broader swath of its nations communications networks.
Furthermore, eligibility expansion will also reduce the likelihood that insecure equipment and services will remain in domestic communications networks.
7. The Commission rejects the argument that raising the cap would extend reimbursement eligibility to larger companies that do not need government assistance, and the Commission declines to use a different metric, such as revenue or net income, to determine eligibility for participation in the Reimbursement Program. From an administrative standpoint, utilizing customer count as the sole eligibility metric allows prospective participants and the Commission to easily determine participants eligibility in the Reimbursement Program. The Commission also notes that a variety of entities have identified Huawei and ZTE
equipment and services in their networks, indicating that until such equipment and services are removed, those networks are at risk, regardless of size. Furthermore, the Commission finds that its decision to expand eligibility for the Reimbursement Program is consistent not only with the statutory directive but also with the Commissions stated goals of the Reimbursement Program. Although the Commission anticipates that expanding participant eligibility will increase Reimbursement Program applications and demand, doing so does not frustrate its ability to administer a program that effectively and efficiently distributes funds in accordance with congressional
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