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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations
security concerns raised by the enumerated sources who make national security determinations. As the Commission explained in the 2019
Supply Chain Order, the benefits of removing covered equipment and services extend to hard to quantify matters, such as preventing untrustworthy elements in the communications network from impacting our nations defense, public safety, and homeland security operations, our military readiness, and our critical infrastructure, let alone the collateral damage such as loss of life that may occur with any mass disruption to our nations communications networks.
205. The other rules enacted in the Order are mandated by the Secure Networks Act and the Commission has no discretion to diverge from statutory direction. The Commission estimates the reporting costs of complying with the new reporting requirement, mandated by section 5 of the Secure Networks Act, to be approximately $600,000, being the product the per provider cost of $167 and the Commissions estimate of reporting providers of advanced communications services of approximately 3,500 $167
3,500 = $584,500, which the Commission rounds to $600,000
recognizing its calculations are only approximations. The Commission estimates that complying would take 3
hours for each ETC subject to that collection, at a cost of about $167 per carrier, as the reporting requirements for the new collection are similar to those in the 2019 Supply Chain Information Collection. The Commission estimates there are approximately 3,500 providers of advanced communications service, i.e., providers that would have to report under the present collection, as follows.
There are 3,822 current 477 filings.
Some of these are from filers that affiliated with each other. The Commission associated affiliated 477
filers with a unique parent filer, dropping the affiliates from its count. Of the remaining 477 filers, the Commission dropped filers who only engage in fixed line resale and do not supply mobile service. This left 3,579
filers, which, recognizing the Commissions process involves approximation, it rounds to 3,500. This reporting cost estimate is higher than the cost of the data collection of the 2019 Supply Chain Information Collection because the universe of respondents includes all providers of advanced communications service, not just ETCs. The Commission anticipates that the new prohibition on Federal
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subsidy programs administered by the Commission will not have incremental net costs beyond those already imposed by 54.9 of the Commissions rules. The Commission accordingly finds that its requirements will achieve the stated objectives of Congresss mandated rules in the most cost-effective manner.
Huawei argues that the significant upfront costs as well as ongoing expenditures . . . will make it extremely difficult to comply with a removal and replacement mandate.
Huawei believes a cost benefit analysis likely would result in inequitable disbursement or reimbursement funds because some carriers may have spent more on covered company equipment that other carriers and, for non-ETCs, the magnitude of equipment replacements costs is not something they can afford. The Commission disagrees. For non-ETCs, the requirement to remove and replace equipment applies only to those providers which voluntarily choose to participate in the Reimbursement Program. And the Commission received no comments from ETCs who would be ineligible to participate in the Reimbursement Program stating the requirement to remove and replace covered equipment or services is not feasible. Finally, the design of the Reimbursement Program, including section 4 of the Secure Networks Act and the rules the Commission adopts, will ensure an equitable allocation of funds to replace covered equipment and services.
III. Procedural Matters A. Paperwork Reduction Act of 1995
Analysis 206. This document contains modified information collection requirements subject to the Paperwork Reduction Act of 1995 PRA, Public Law 10413. It will be submitted to the Office of Management and Budget OMB for review under Section 3507d of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the modified information collection requirements contained in this proceeding. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107198, see 44 U.S.C. 3506c4, the Commission previously sought specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25
employees.

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B. Congressional Review Act 207. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, concurs that this rule is major under the Congressional Review Act, 5 U.S.C.
8042. The Commission will send a copy of this Second Report and Order to Congress and the Government Accountability Office pursuant to 5
U.S.C. 801a1A.
208. Final Regulatory Flexibility Analysis. The Regulatory Flexibility Act of 1980 RFA requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.
Accordingly, the Commission has prepared a FRFA concerning the possible impact of the rule changes contained in the Report and Order on small entities.
209. The Commission sought written comment on the proposals in the 2019
Supply Chain Further Notice and 2020
Supply Chain Second Further Notice, including comment on the Initial Regulatory Flexibility Analysis IRFA.
The present Final Regulatory Flexibility Analysis FRFA addresses comments received on the IRFAs and conforms to the RFA.
210. Consistent with the Commissions obligation to be responsible stewards of the public funds used in USF programs and increasing concern about ensuring communications supply chain integrity, and as directed by the Secure Networks Act, the Second Report and Order Order adopts rules to implement sections 2, 3, 4, 5, and 7 of the Secure Networks Act and to require recipients of reimbursement funds under the Reimbursement Program and ETCs receiving USF support to remove and replace from their network operations communications equipment and services included on the covered list required by section 2 of the Covered List.
211. Specifically, in addition to the requirement to remove-and-replace, the Commission adopts several rules to implement provisions of the Secure Networks Act. The Commission implements section 2 of the Secure Networks Act by publishing on its website the Covered List of communications equipment or services determined to pose a risk to national security, pursuant to the sources of determinations identified in section 2c of the Secure Networks Act. The
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