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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations replace requirement contingent upon an appropriation from Congress to the Reimbursement Program.
Reimbursement Program recipients must certify compliance as a condition to their participation, as required by various provisions of the Secure Networks Act. ETC recipients of USF
support must certify that they have complied with section 54.11 after the Reimbursement Program opens, and subsequently certify compliance before receiving USF support each funding year.
29. Its decision is consistent with the Commissions prior approach to requiring removal of vulnerable equipment and services from the nations communications networks.
Upon adoption of the remove-andreplace rule, the Commission stated its intent to align the scope of equipment and services subject to section 54.11 of the Commissions rules with the scope of equipment and services eligible for reimbursement under the Reimbursement Program. Doing so, the Commission found, better aligns compliance with removal and replacement obligations to the administration of the Reimbursement Program and creates a bright-line determination for ETCs receiving USF
support and reimbursement recipients to easily identify equipment and services to remove and replace from their networks. Because the Commission finds the CAA amends the Secure Networks Act to modify the equipment and services eligible for reimbursement from solely those on the Covered List to those on the Covered List and also defined in the 2019 Supply Chain Order or subject to the designation process in section 54.9 of the Commissions rules and the Designation Orders, the Commission modifies the remove-and-replace rule to preserve the alignment of the equipment and services subject to removal under section 54.11 and through the Reimbursement Program. The Commission finds that using the equipment and services on the Covered List that are defined in the 2019 Supply Chain Order or subject to the designation process in section 54.9 of the Commissions rules and the Designation Orders to determine both the equipment and services subject to the remove-and-replace requirement and the equipment and services eligible for reimbursement through the Reimbursement Program creates a bright-line determination for entities complying with section 54.11 and those participating in the Reimbursement Program. Therefore, the Commission
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finds that it should not be overly burdensome for entities to identify the equipment and services in their networks required for removal and replacement.
30. The record supports its decision to align the scope of equipment and services required for removal under section 54.11 with the scope of equipment and services eligible for reimbursement through the Reimbursement Program. As NTCA
claims, this revision eliminates the incongruity created by the Commissions prior rules and the Secure Networks Act wherein the scope of equipment and services that ETCs were required to remove and replace exceeded the equipment and services eligible for reimbursement. The Commission further concurs with NTCA
and Mediacom that modifying the scope of the remove-and-replace requirement to match the scope of eligible equipment and services in the Reimbursement Program provides clarity to providers, thus ultimately easing administrative burdens as providers work to remove Huawei and ZTE equipment and services from their networks.
31. The Commission rejects Huaweis argument that because the Commission lacks authority to mandate removal and replacement, it likewise has no authority to modify the scope of the equipment and services subject to the requirement. As discussed at length in response to similar arguments Huawei raised in the 2020 Supply Chain Order, the Commission found that several statutory provisions provided appropriate authority for adoption of the remove-and-replace rule. Section 4 of the Secure Networks Act requires recipients of Reimbursement Program funding to permanently remove and replace all covered communications equipment and services from their networks as a condition of receiving the funding, and to certify to that effect throughout the reimbursement process.
The Commission also found that provisions of the Communications Act, including those related to its authority governing universal service, provided legal authority for the application of the remove-and-replace rule to ETCs that receive USF support. Nothing in the CAA or the record changes the Commissions previous finding that the Commission has authority to require recipients of Reimbursement Program funding and ETCs receiving USF
support to remove and replace covered equipment and services. While the Commission acknowledges that section 901 of the CAA amends some provisions of the Secure Networks Act, including the scope of the equipment and services
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eligible for reimbursement, the CAA
does not disturb the provisions that authorize the Commissions mandate, as discussed in the 2020 Supply Chain Order. On the contrary, the CAAs amendments to the Secure Networks Act bolster its position that the Commission has authority to require the removal of equipment and services from covered companies designated pursuant to section 54.9 of the Commissions rules. First, Congress incorporated the Commissions designation process and current designations of Huawei and ZTE
as covered companies into its limitation on the use of Reimbursement Program funds. Second, Congress revised the cutoff date for equipment and services eligible for reimbursement to June 30, 2020, the date the Designation Orders were released. Both actions indicate Congresss support for the Commissions authority to designate Huawei and ZTE
as covered companies and are evidence of congressional intent to ensure removal of Huawei and ZTE equipment and services from its nations communications networks and supply chain. By incorporating the Commissions previous actions as the basis for reimbursement eligibility, the CAA provides even more support for the Commissions position that it was authorized to take that action.
32. The Commission similarly rejects Huaweis argument that the CAA does not provide the authority to expand the scope of equipment and services subject to the remove-and-replace requirement.
As discussed above, when adopting the remove-and-replace rule, the Commission intended to align the scope of equipment and services subject to the requirement with the scope of equipment and services Congress intended for reimbursementprior to the CAAs amendments, the Covered List. By amending the scope of equipment and services eligible for reimbursement to a subset of products on the Covered List that are defined in the 2019 Supply Chain Order or subject to the designation process and Designation Orders, the CAA
necessitates a corresponding modification to the scope of equipment and services subject to removal and replacement under section 54.11 of the Commissions rules. The Commission finds the CAA supports its action to align the scope of equipment and services required for removal with those eligible for reimbursement as set forth by Congress.
33. The modifications to the removeand-replace requirement adopted herein are limited to the scope of equipment and services subject to removal and do not revise the scope of entities required
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