Pai Proposes FCC Clamp Down on Chinese Firms in Order for Nov. 19 Meeting

FCC Chairman Ajit Pai circulated an order Monday for the Nov. 19 commissioners’ meeting that would bar providers from using USF support to buy from suppliers deemed a threat to national security. Pai mentioned Chinese companies Huawei and ZTE (see 1910280021). FCC officials said the order singles out those two. Pai proposes to seek comment on rules requiring eligible telecom carriers remove from their networks existing equipment from the suppliers and on how to provide financial assistance to carriers to help them transition to a trusted supplier.

FCC members would also address location accuracy of wireless calls to 911. They would vote on the IP-captioned telephone service's funding base and on wireline phone deregulation. Also tentatively scheduled are two broadcast items, including all-digital AM.

Pai is at the World Radiocommunication Conference, which started Monday in Egypt. President Donald Trump also weighed in a letter to WRC delegates. The U.S. plans “to deploy 5G services rapidly” and opposes "those who would use 5G as a tool to expand control of their own citizens and to sow discord among nations,” the letter says. It pledged U.S. support for the ITU and the WRC process.

The rule, as it applies to Huawei and ZTE, would take effect within 30 days of Federal Register publication, though the companies can challenge their designation, an FCC official told reporters on condition of not being identified. The order also would apply to wireline components and across all USF programs.

“My plan calls first for an assessment to find out exactly how much equipment from Huawei and another Chinese company, ZTE, is in these networks, followed by financial assistance to these carriers to help them transition to more trusted vendors,” Pai blogged. Huawei and ZTE didn't comment.

“We need to make sure our networks won’t harm our national security, threaten our economic security, or undermine our values,” Pai said. “The Chinese government has shown repeatedly that it is willing to go to extraordinary lengths to do just that. And Chinese law requires all companies subject to its jurisdiction to secretly comply with demands from Chinese intelligence services.”

Commissioners approved a supply chain NPRM 5-0 in April 2018 (see 1804170038) and smaller carriers have repeatedly raised concerns since some use equipment from the Chinese suppliers (see 1803260037). Commissioner Geoffrey Starks, who made 5G security one of his top issues (see 1910100052), declined to comment. He plans trips to Brazil and Denver this week to discuss security. Commissioner Jessica Rosenworcel wants "cybersecurity policies that target all our network providers -- not just our universal service recipients."

“Members care deeply about ... security,” said Steve Berry, president of the Competitive Carriers Association. “We look forward to seeing the full details when the draft order is released.” Other groups plan to comment after the draft item is released Tuesday.

Also on the agenda, Pai is proposing commissioners approve a vertical location accuracy metric of plus-or-minus 3 meters for wireless calls made indoors. “If you call 911 from your cell phone, today’s system does a good job of dispatching first responders to the caller’s street address,” Pai blogged. “The problem is that it doesn’t provide the vertical location of where the call originated. That can be a big problem if you are calling 911 from a high-rise building like an office tower, and a delay of minutes in first responders finding you can be the difference between life and death.” Some public safety stakeholders want accuracy down to individual floors.

Wireline

The FCC will take a fresh look at requirements for ILECs that make portions of their networks available to competitive LECs on an unbundled basis at regulated rates and that make certain services available for resale to competitors at regulated rates. Incumbent and competitive LECs fought over similar rules earlier this year in docket 18-141 (see 1906190044).

Pai said the communications landscape has transformed since the Telecom Act, and "the voice and broadband marketplaces are filled with competition from a multitude of providers using a variety of technologies and offering capabilities and services unforeseen" in 1996. He wants new unbundling and resale rules "to reflect these marketplace realities" and to remove regulatory burdens that could inhibit deployment of new services. "Recognizing that unbundling requirements may play a role where facilities-based competition is less likely to occur, my proposal would maintain rules regarding broadband-capable loops used to serve residential customers in rural areas," he said.

"The FCC is taking another positive step in its ongoing effort to evaluate outdated and costly regulations that are ripe for elimination in today's competitive communications marketplace," a USTelecom spokesperson said Monday. "We are hopeful the unbundling proposal will help level the playing field to incentivize increased investment in competitive facilities-based networks."

Pai wants the FCC to update the way it finances IP CTS through IP-enabled phones for individuals who can speak but have difficulty hearing over a phone, so they can read what the other party says. Under an interim funding mechanism developed over 10 years ago (see 0612260121), support comes only from fees on interstate telecom revenue of telephone relay service (TRS) contributors.

The chairman said the rules "unfairly burden providers and users of interstate services," so proposes expanding the TRS fund contribution base to include providers of intrastate voice communications services. Pai said consumer groups support expanding the contribution base, and docket 03-123 indicates concerns over possible funding cuts for IP CTS (see 1904160048). "This proposal would help to ensure the long-term sustainability of this vital service," Pai wrote.

Pai wants to make sure the larger TRS program doesn't direct USF dollars to TRS equipment suppliers or providers that abuse the system. Pai proposed updating its rules "for government debarment and suspension to make them consistent with guidelines from the Office of Management and Budget," which give the FCC flexibility to act more quickly if it discovers bad actors misusing taxpayer funds. The new rules would encompass TRS and the national deaf-blind equipment distribution program (NDBEDP), Pai said. Last week, advocacy groups including Telecommunications for the Deaf and Hard of Hearing and the National Association for the Deaf in docket 10-210 asked for further steps to improve disability access, including forming an advisory group of consumer advocates and service professionals to review equipment and resources offered through the NDBEDP.

Broadcasting

Commissioners will vote on seeking comment on allowing all-digital AM radio and modifying or eliminating rules limiting the amount of duplicative programming commonly owned radio stations in the same market can air, Pai announced.

The all-digital AM NPRM stems from a March petition from Bryan Broadcasting, which was supported by NAB and most commenters (see 1905130056). Currently, AM radio stations are authorized to use analog only or a hybrid of digital and analog, Pai noted.

All-digital AM is less susceptible to the interference that analog AM broadcasters experience, said Wilkinson Barker broadcast attorney David Oxenford, who represents Bryan. Though many older car radios can’t receive digital AM signals, vehicles with HD radios -- including many newer cars -- can, Oxenford told us. The proposal would allow all-digital AM on a voluntary basis, Pai blogged. “AM operators would be the ones deciding if transitioning is right for them.”

The media modernization item seeking comment on relaxing limits on duplicative programming for same-market, commonly owned stations isn’t expected to be controversial, broadcast lawyers agreed. FM stations are too valuable for a licensee to compromise by duplicating programming, one said. Meanwhile, AM stations are more likely to struggle and could benefit from the reduced limits, the attorney said. There are more radio stations and much more competition for listeners now than in 1992 when the rules were created, Pai said. “With so much more competition and program diversity, which were the objectives of the radio duplication rule, we are seeking comment on whether the rule is still necessary and whether it should be modified or eliminated.”