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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations Accordingly, the Commission rejects these requests.
91. Removal, Replacement and Disposal TermReimbursement Claims.
The Commission clarifies that only reasonable expenses incurred before the expiration of the removal, replacement, and disposal term are eligible for reimbursement. Reimbursement Program participants have one year from the initial disbursement to complete the permanent removal, replacement, and disposal of covered communications equipment or services. As a result, program participants may only submit reimbursement claims for costs incurred within one year of the initial disbursement date. If a program participant requests, and the Wireline Competition Bureau grants, a term extension according to its rules, all reimbursement claims must cover eligible expenses incurred prior to the term end date as adjusted by the granted extension. Any expenses incurred after the term ends will be ineligible for reimbursement. Additionally, any expenses incurred while an individual extension request is pending will not be reimbursable if the request is ultimately denied and the expenses were incurred outside of the one-year term.
92. Final Certification Update Timing.
Within 10 days following the expiration of the removal, replacement, and disposal term, Reimbursement Program recipients are required to file a final certification with the Commission indicating, among other things, whether or not the recipient has fully complied with all terms of program participation.
Program participants stating in their final certification that they have not fully complied are then required by both the Secure Networks Act and the 2020 Supply Chain Order to file an updated final certification when the recipient has fully complied. Both the Secure Networks Act and the 2020
Supply Chain Order are silent as to a deadline for filing the final certification update.
93. Program participants are required to complete the permanent removal, replacement, and disposal of the equipment or services, and thus the terms of program participation, before the expiration of the removal, replacement, and disposal term. The Commission recognizes that unforeseen delays may extend the removal, replacement, and disposal process beyond the one-year term, and the Commission expects program participants who anticipate they will not complete removal, replacement, and disposal by the end of their term will request an individual extension from
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the Wireline Competition Bureau before the end of that term.
94. If a program participant fails to timely submit a final certification, the program participant may be subject to forfeitures as provided for under the Communications Act of 1934, as amended. Further, if a program participant files a final certification indicating that it has not fully complied with the terms of the program, but subsequently fails to file an updated final certification indicating full compliance within 60 days after the final certification deadline, the program participant may be subject to forfeitures as provided for under the Communications Act of 1934, as amended. Additionally, program participants found in violation of the Secure Networks Act, the Commissions rules implementing the statute, or the commitments made by the recipient in the application for reimbursement may be: 1 Required to repay reimbursement funds; 2 barred from further participation in the Reimbursement Program; 3 referred to all appropriate law enforcement agencies or officials for further action under applicable criminal and civil law; and 4 barred from participation in other programs of the Commission, including the Federal universal service support programs established under section 254 of the Communications Act of 1934, as amended. The aforementioned penalties are within the Commissions jurisdiction. The Commission notes that applicants that commit fraud may separately be subject to the False Claims Act or other legal action as provided by existing statutes.
95. Final Spending Report Timing.
Under the Reimbursement Program rules, program recipients must file their final spending report after the final certification. The Commission was silent, however, as to the deadline for filing the final spending report. The Commission clarifies the timeframe and expect program participants to submit the final spending report no later than 60 days following the expiration of the program participants reimbursement claim deadline. If a program participant has not submitted a final spending report within 60 days of the expiration of the reimbursement claim deadline, the matter may be referred to the Enforcement Bureau for further investigation.
96. Accounting for Removal, Replacement, and Disposal of Covered Equipment. Some program participants participating in other funding programs or subject to rate regulation could receive duplicate recovery for support received from the Reimbursement
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Program for network changes. As a result, the Commission clarifies provider requirements with respect to maintaining books of account using the Uniform System of Accounts contained in Part 32 of the Commissions rules USOA carriers. To the extent a USOA
carrier has purchased and installed covered equipment, that equipment should currently be recognized as an investment in the USOA carriers telecommunications plant and subject to retirement and depreciation rules which require the carrier to establish estimated lives and ratable depreciation of the assets. Because the Commission is requiring recipients of reimbursement funds under the Reimbursement Program and ETCs receiving USF
support to remove and replace from their network and operations environments equipment and services included on the Covered List, and as defined in the 2019 Supply Chain Order or as designated pursuant to section 54.9 of the Commissions rules and in the Designation Orders, the Commission also must address the accounting treatment of USOA carriers retirement of covered equipment.
97. To ensure consistent accounting treatment, and to prevent the removal, replacement, and disposal of covered equipment by USOA carriers from unduly depleting such carriers depreciation reserve, such carriers may treat the removal, replacement and disposal of covered equipment as an extraordinary retirement, subject to the amortization schedule that the Commission provides below. For an event to be considered an extraordinary retirement, it must satisfy three requirements: 1 The impending retirement was not adequately considered in setting past depreciation rates; 2 the charging of the retirement against the reserve will unduly deplete that reserve; and 3 the retirement is unusual such that similar retirements are not likely to recur in the future.
98. The Commission finds that the first and third of these requirements are met for retirements made in accordance with the 2019 Supply Chain Order.
Carriers that purchased covered equipment could not have anticipated that the Commission and Congress would require retirement of covered equipment and that Congress would make reimbursement funds available to replace covered equipment. As a result, early retirements resulting from Commission and congressional action were not and could not have been considered in setting past depreciation rates. Furthermore, given the unusual circumstances that led to these retirements, it is highly unlikely that
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