Most Commenters Say NDAA Has No Implications for USF, Though Debate Continues

Debate continues whether the FY 2019 National Defense Authorization Act means the FCC can bar use of USF money to buy equipment or services from companies that “pose a national security threat” to U.S. communications networks or the communications supply chain (see 1811190033). Replies largely followed the same lines as initial comments. Most said the NDAA clearly doesn’t apply here.

The Telecommunications Industry Association fired back at others who said the NDAA has no implications for USF programs. "While opposing commenters seek to manufacture a USF carve-out in the new statute, none of their arguments withstand scrutiny,” TIA said. “Contrary to the claims of some opposing commenters, nothing about Section 889 [of the NDAA] limits the Commission’s pre-existing authority to adopt its proposed rule or one like it.” Comments were posted Monday in docket 18-89.

The NDAA applies only to “Federal loan and grant programs” not the USF, Huawei countered. “A few parties argue either that the statutory language means something other than what it plainly says, or that it is sufficiently ambiguous that the Commission can interpret it to bring USF funds within its ambit,” the Chinese equipment company said. “Neither argument is persuasive.”

Section 889(b)(1) "applies only to ‘loan’ or ‘grant’ funds, and therefore does not apply to USF subsidies, and Section 889 is intended to apply only to the federal government procurement process, of which the USF is not a part,” the Rural Wireless Association commented.

The Wireless ISP Association said most commenters agree the NDAA’s direct prohibition on use of government funding to buy covered telecom equipment doesn’t apply to private expenditures. The NDAA “makes a clear distinction between programs involving direct government expenditures for ‘loans and grants’ … for which new outlays are prohibited -- and government ‘subsidy programs’ supported” by the USF, WISPA said.

Hytera, a Chinese company, said it's in a “remarkable and unfortunate position” due to the NDAA. “It has always implemented the highest level of cybersecurity protections for its equipment, and has never been informed by any U.S. government entity that its equipment posed a national security risk,” Hytera said. “Yet, without the most basic protections afforded by due process, Hytera was designated by name in a statute that identifies activities for which Federal agencies are prohibited in engaging with Hytera.”