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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations
another procedural layer will unnecessarily delay the allocation of funding for the removal, replacement, and disposal of covered communications equipment and service from the networks of eligible providers.
Because of the national security implications of continuing to have insecure equipment in the Commissions communications networks, it is striving to receive applications within twelve months of the adoption of this document. Adding a processing layer to pre-approve transition plans would require building in further time for implementation and the redirection of resources to reviewing and approving transition plans, instead of immediately implementing a system to receive applications. Moreover, the Commission will separately be providing participants with guidance on replacement equipment and cost estimates. The Commission finds the additional guidance will sufficiently help applicants in formulating their network transition plans and should alleviate the concerns the commenters express. Accordingly, the Commission declines at this time to establish a preapproval process for transition plans as suggested by CCA and NetNumber.
For the same reasons, the Commission declines a similar suggestion by SNC, to the extent SNCs proposals differs from the process the Commission adopts, to have two separate application rounds upfront to obtain a funding allocation, i.e., one to requests funds for planning and another for replacement and implementation.
163. The Secure Networks Act directs the Commission to adopt regulations requiring the disposal of covered communications equipment and services by Reimbursement Program recipients to prevent the use of such equipment or services in the networks of advanced communications service providers. Disposal is defined as the act of disposing. To dispose of something means to get rid of, to deal with conclusively, to transfer to the control of another. While the act of disposing typically means to get rid of or to transfer control of something to another, the Commission reads disposal in connection with the statutory language to prevent such equipment or services from being used in the networks of providers as requiring the destruction of the equipment or service by the recipient so as to make the equipment or service inoperable and incapable of use. The Commission adopts a regulation consistent with its interpretation and will require recipients to dispose of covered
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communications equipment and service in a manner to prevent the use of the equipment or service in the networks of other providers.
164. The Commission disagrees with PRTC that the statute would allow the Commission to permit the transfer of covered communications equipment or service to non-U.S. providers in an operable state that would allow for use of the equipment or service in another providers network, whether foreign or domestic. At the same time, the Commission agrees with CCA and will allow providers to satisfy its disposal requirements by documenting their transfer of removed equipment to third parties tasked with destruction or other disposal of the equipment. Regardless of the method of disposal or destruction, the Commission requires participants to retain detailed documentation to verify compliance with this requirement. The Commission expects WCB to provide participants with additional guidance to help participants with the disposal and verification process.
165. The Commission directs WCB to create one or more forms to be used by entities to claim reimbursement from the Reimbursement Program, to report on their use of money disbursed and the status of their construction efforts, and for any other Reimbursement Programrelated purposes. The Commission also directs WCB to establish the timing and calculate the amount of the allocations to eligible entities from the Reimbursement Program, develop a final Catalog of Eligible Expenses with the assistance of a contractor, and make other determinations regarding eligible costs and the reimbursement process.
The Commission further directs WCB to adopt the necessary policies and procedures relating to allocations, draw downs, payments, obligations, and expenditures of money from the Reimbursement Program to protect against waste, fraud, and abuse and to protect Reimbursement Program funds in the event of bankruptcy of a support recipient. The Commission expects WCB through the implementation process will address many of the procedural details highlighted by the Secure Networks Coalition with input as needed from the public.
166. WCB will consult with the Office of General Counsel and the Office of the Managing Director OMD in carrying out these tasks. The Commission also encourages the WCB to work, as necessary, with other appropriate Bureaus and Offices in implementing and maintaining the Reimbursement Program. The Commission authorizes WCB to engage contractors to assist in the reimbursement process and the
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administration of the Reimbursement Program. Lastly, as required by the Secure Networks Act, the Commission directs WCB with the assistance of the Consumer and Governmental Affairs Bureau to engage in education efforts with providers of advanced communications service to encourage participation in the Reimbursement Program and to assist such providers in submitting applications.
167. The Secure Networks Act requires the Commission to take all necessary steps to combat waste, fraud, and abuse in the Reimbursement Program. The Secure Networks Act and the associated House Report specified that these steps shall include, but are not limited to, requiring recipients to submit status updates, detailed spending reports and documentation of invoices, and conducting routine audits and random field investigations of recipients to ensure compliance with Program requirements and this Act. The Commission sought comment in the Section 4 Public Notice, 85 FR 26653, May 5, 2020, and the 2019 Supply Chain Second Further Notice on these statutory obligations. The Commission now adopts rules to protect against the waste, fraud, and abuse of taxpayer money consistent with the Secure Networks Act.
168. Status Updates. While the Commission did not receive any comments on how to implement this statutory provision, it will proceed as directed by the Secure Networks Act and require program recipients to file a status update once every 90 days beginning on the date on which the Commission approves an application for a reimbursement. Recipients must file the first report within 90 days of receiving their funding allocation.
Although the statute allows the Commission to require more frequently filed updates, it finds an update every 90 days sufficient to keep the Commission informed of ongoing developments while not unduly burdening program recipients and diverting limited administrative resources away from the network transition process. These updates will help the Commission monitor the overall pace of the removal, replacement, and disposal process and whether recipients are acting consistently with the timelines provided to the Commission or whether unexpected challenges are causing delay.
169. In the update, the recipients shall report on the efforts undertaken, and challenges encountered, in permanently removing, replacing, and disposing its covered communications equipment or
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