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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations
amendment to section 4c of the Secure Networks Act makes clear Congresss intent that it did not mean to cover all equipment and services later placed on the Covered List, instead choosing to limit reimbursement funding to Huawei and ZTE communications equipment and services. Both RWA and Mediacom argue that the Commissions proposals are supported by provisions in the CAA
that further align the scope of reimbursement with the equipment and services identified by the 2019
Information Collection Order, 85 FR 230
January 3, 2020, which sought data on Huawei and ZTE equipment and services contained in ETCs, and their subsidiaries and affiliates, networks.
The Commission concurs that this alignment supports its interpretation that Congress intended to narrow the scope of eligible equipment and services to Huawei and ZTE communications equipment and services, as covered companies established in the Designation Orders. Furthermore, the CAAs revision to set the cutoff date for equipment and services eligible for reimbursement as the effective date of the Designation Orders, June 30, 2020, likewise indicates Congresss intent to synchronize the Reimbursement Program eligibility with the scope of equipment and services designated pursuant to section 54.9 of the Commissions rules.
15. The Competitive Carriers Association CCA, NTCAThe Rural Broadband Association NTCA, and the Secure Networks Coalition offer slightly varied interpretations of the CAAs amendment to section 4c of the Secure Networks Act. CCA argues that the CAAs amendment demonstrates Congresss intent to allow the use of Reimbursement Program funds to remove, replace, and dispose of equipment and services subject either to the Covered List or the Designation Orders, rather than including only equipment and services subject both to the Covered List and the Designation Orders. NTCA mischaracterizes the Commissions proposal, instead supporting revising the equipment and services subject to removal and reimbursement to encompass all equipment and services produced or provided by entities identified on the Commissions Covered List. The Secure Networks Coalitions similarly misconstrues the section 4c amendments. The Secure Networks Coalition argues that the CAA requires the Reimbursement Program to fund the replacement of all equipment, software, and services included on the Covered List. The Secure Networks Coalition
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claims that because Congress allocated funding to remove network equipment posing a national security risk to the nations communications networks, the Commission must allow for the removal and replacement of any hardware or software from companies on the Covered List in order to meet Congresss mandate to mitigate risks to national security.
16. While the Commission agrees with commenters conclusions that Congress intended to include Huawei and ZTE
communications equipment and services in the scope of products eligible for reimbursement, the Commission rejects CCA, NTCA, and the Secure Network Coalitions interpretations of the CAA. Section 901 of the CAA
amends section 4c of the Secure Networks Act by replacing the entire text of sections 4c1Ai & ii to revise the scope of equipment and services eligible for reimbursement from those that are either published on the initial Covered List or subsequently placed on the Covered List, to those that are defined by the 2019 Supply Chain Order or as determined by the designation process in section 54.9 of the Commissions rules and the Designation Orders designating Huawei and ZTE as covered companies. Section 901 does not, however, amend section 4c1A, which limits reimbursement funding to the permanent removal of covered communications equipment or services, nor does it amend the definition of covered communications equipment or service in section 95 of the Secure Networks Act, which means any communications equipment or service on the Covered List.
17. The Commission concludes that had Congress intended to continue using the Covered List as the sole means to identify equipment and services eligible for reimbursement, it would have left the original provisions in the Secure Networks Act intact, rather than replacing them with different parameters. At the same time, Congress preserved the definition of covered communications equipment or service to include such items on the Covered List. This indicates Congresss intent to maintain the Covered List as a baseline source for eligible equipment and services. The amendments in section 901 of the CAA suggest that Congress meant to further limit reimbursement eligibility from the Covered List to the subset of those equipment and services defined in the 2019 Supply Chain Order or subject to the designation process in section 54.9 of the Commissions rules.
Specifically, Congress replaced language that formerly listed the Covered List as the sole source of equipment and
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service eligible for reimbursement with language identifying Huawei and ZTE
equipment and services subject to the Designation Orders when setting the bounds of equipment and services eligible for reimbursement through the Reimbursement Program.
18. Therefore, CCAs interpretation, that Congress intended to allow reimbursement funds to be used for eligible equipment and services on either the Covered List or produced or provided by designated companies in the Designation Orders, does not comport with the structure of the amended section 4 of the Secure Networks Act. The amended section 4
still preserves the Covered List as the baseline source for eligible equipment and services but then limits eligibility to those such equipment and services as defined by the 2019 Supply Chain Order or as determined by the designation process in section 54.9 of the Commissions rules and the Designation Orders designating Huawei and ZTE as covered companies. Nor do NTCA and the Secure Networks Coalitions interpretations supporting eligibility for all equipment and services on the Covered List reconcile with the CAAs amendments to section 4c1 of the Secure Networks Act. Congress intended to limit eligibility to a subset of equipment and services on the Covered List by amending sections 4c1Ai & ii to replace the original text, which referenced the Covered List, with a reference the 2019 Supply Chain Order, the Designation Orders, and the Commissions process for designations under section 54.9 of its rules.
19. Analysis of Covered List.
Consistent with the Commissions previous interpretation of the scope of Huawei and ZTE equipment and services included in the Covered List, the Commission interprets the CAAs revised scope of equipment and services eligible for reimbursement to include all communications equipment and services produced or provided by Huawei or ZTE. Section 2b of the Secure Networks Act requires the Commission to add to the Covered List communications equipment and services that satisfy certain functional capabilities, as determined by specific sources enumerated in section 2c. In the 2020 Supply Chain Order, the Commission acknowledged that section 889f3 of the 2019 NDAA is one of the enumerated sources in section 2c for including equipment and services on the Covered List. Section 889f3
defines covered telecommunications equipment and services to include A
telecommunications equipment produced or provided by Huawei or
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