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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations ZTE; and C telecommunications or video surveillance services provided by such entities or using such equipment.
Notably, the Commission rejected arguments that it should have added a narrower list of equipment and services to the Covered List based upon a separate section of the 2019 NDAA, section 889a2B, that limited the covered telecommunications equipment or services in the statute to equipment and services that can route or redirect user data traffic or permit visibility into any user data or packets that such equipment transmits or otherwise handles. The Commission found that Congress explicitly limited the scope of its procurement restrictions to Huawei and ZTE equipment in subsections a and b of the 2019
NDAA to equipment capable of routing or permitting network visibility, but did not include such a limitation in paragraph 889f3, which governs the determination the Commission must add on the Covered List. Therefore, consistent with the Secure Networks Act statutory obligation, the Commission placed on the Covered List the determination found in section 889f3A, that is, telecommunications equipment produced or provided by Huawei or ZTE capable of the functions outlined in sections 2b2A, B, or C of the Secure Networks Act.
20. The Commission finds that the Commissions prior interpretation of the 2019 NDAA provisions means that Huawei and ZTE communications equipment and services need not be capable of the functions listed in sections 2b2A or B of the Secure Networks Act to be on the Covered List.
The Commission determined in the 2020 Supply Chain Order that Congress chose to specifically include the broader definition of eligible equipment and services in section 889f3, and the Commission concluded that section 889f3 incorporated all such Huawei and ZTE communications equipment and services into the Covered List.
Furthermore, in dismissing arguments to limit inclusion to only Huawei or ZTE equipment and services capable of the functionality enumerated in section 889a2B of the 2019 NDAA, the Commission interpreted the inclusion of section 2b2C of the Secure Networks Act, that is, including equipment and services capable of otherwise posing an unacceptable risk to the national security of the United States or the security and safety of United States persons, as indicative of Congresss intent to encompass on the Covered List equipment and services
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beyond the narrower list of enumerated functions. As the Commission stated in the 2020 Supply Chain Order, to limit the NDAA determination to equipment capable of routing or permitting network visibility would both ignore the plain text of the NDAA and read section 2b2C out of the Secure Networks Act, which lists the capabilities of communications equipment and services that warrant inclusion on the Covered List. Section 901 of the CAA
is consistent with this interpretation. It carves out the equipment and services eligible for reimbursement into a limited subset of the Covered List, that is, only communications equipment and services as defined in the 2019 Supply Chain Order or as determined by the process in section 54.9 of the Commissions rules and the Designation Orders. The Designation Orders prohibited the use of USF support for all Huawei and ZTE equipment and services. The Commission thus finds Congress in the CAA intended reimbursement eligibility for all Huawei and ZTE equipment and services found on the Covered List, that is, all Huawei and ZTE communications equipment and services.
21. Its decision today also advances the Commissions goals of developing a simple and straightforward reimbursement process that facilitates the expeditious removal, replacement, and disposal of equipment and services that threaten the security of its nations communications systems. The Commission agrees with RWA that clarifying the scope of equipment and services eligible for reimbursement as Huawei and ZTE communications equipment and services, rather than all equipment and services on the Covered List, which currently includes three other companies and potentially others should the Commission add more, creates a bright line for Reimbursement Program participants to clearly identify what equipment and services are eligible, thus easing administrative costs for eligible providers and the Commission. By revising the scope of equipment and services eligible for reimbursement, the Commission provides clarity to providers of advanced communications service as to the expectations for participation in the Reimbursement Program and assurance as to what costs associated with the removal, replacement, and disposal of covered equipment and services they can expect to be reimbursed, if accepted.
22. The Commission further interprets the CAA amendments to determine that other equipment and services on the Covered List are not automatically
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eligible for reimbursement. Only equipment and services on the Covered List that are also defined in the 2019
Supply Chain Order or that are produced or provided by covered companies designated under section 54.9 of the Commissions rules as posing a national security threat to the integrity of communications networks or the communications supply chain are eligible for reimbursement under the Reimbursement Program based on the CAA. The Commission agrees with CCA
and Mediacom that the CAA amends section 4c of the Secure Networks Act to permit eligibility of such equipment and services from other designated companies, should the Public Safety and Homeland Security Bureau make such a determination pursuant to the process set forth in section 54.9 of the Commissions rules. Section 901 of the CAA amends section 4c of the Secure Networks Act to allow reimbursement funding to be used for the removal, replacement, and disposal of equipment and services as defined by the 2019
Supply Chain Order, which adopted the process for designating covered companies that pose a national security threat to the integrity of communications networks or the communications supply chain found in section 54.9 of the Commissions rules.
By listing the 2019 Supply Chain Order in the CAA amendment, the Commission finds that Congress intended that the Commissions designation process serve as a source for identifying future equipment and services eligible for reimbursement from the broader Covered List; otherwise, Congress could have merely stated that the Designation Orders alone set the eligibility parameters. Therefore, should future companies be designated as posing a national security threat pursuant to section 54.9 of the Commissions rules, the Commission may consider costs associated with the removal, reimbursement, or disposal of equipment and services produced or provided by those covered companies eligible for reimbursement under the Reimbursement Program, provided that such equipment and services are also on the Covered List and the Reimbursement Program has an open filing window and adequate funding.
23. The Commission next finds that, to the extent there are future designations, equipment and services from such companies would be eligible for reimbursement from the Reimbursement Program without needing an additional appropriation from Congress. Congress has currently appropriated $1.9 billion for the
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