FCC Final Estimate of Demand for 'Rip and Replace' Money Delayed Past June 15

The FCC won’t have a finalized estimate of demands for money from the Secure and Trusted Communications Networks Reimbursement Program to repay U.S. carriers for removing from their networks equipment made by companies deemed a national security risk ready by June 15 as initially anticipated, Chairwoman Jessica Rosenworcel said in letters to Senate Commerce Committee Chair Maria Cantwell, D-Wash., ranking member Roger Wicker, R-Miss., and other leaders of the House and Senate Commerce and Appropriations committees released Wednesday. Cantwell, Wicker and other lawmakers have been eyeing whether and how much additional funding they will seek to appropriate to the “rip and replace” program beyond the $1.9 billion Congress allocated to the program via the FY 2021 appropriations and COVID-19 aid omnibus law (see 2203140061).

The FCC “will not be able to issue funding allocations or determine true demand” for the program by June 15 as originally intended because of “the number of deficient applications” that the commission must allow applicants time to correct, Rosenworcel told lawmakers in the June 1 letters. The FCC’s application review process “has concluded that many of the applications the agency has received are materially deficient,” which is “typically because they lack an adequate cost estimate or sufficient supporting material.” The 2020 Secure and Trusted Communications Networks Act that authorized the program (see 2003120061) “requires the Commission to provide applicants an opportunity to cure these deficiencies and expressly provides for the extension of” the application review deadline to allow for a cure period,” she said. “We expect to complete our review within a matter of weeks once cured applications are filed with us, and we will update you on our progress and expected completion date no later than June 15.”

The FCC has been able to revise down the “gross” funding demand for the “rip and replace” program to $5.3 billion from the $5.6 billion it reported to Congress in February (see 2202040066) and “we anticipate there will be further reduction,” but “the funds appropriated will remain less than the demand from applicants,” Rosenworcel told lawmakers in the June 1 letters. “This anticipated shortfall largely reflects three developments,” including the final Secure and Trusted Communications Networks Act’s expansion of the “range of entities eligible to participate.” The “preliminary cost estimates” for the program “did not consider the full range of costs that were ultimately reimbursable under the law,” she said.

Providers have also “reported increased costs since the program was funded due to supply chain constraints, inflation, and the need to complete their projects within” the statute’s “one-year deadline,” Rosenworcel said. If “total allocation demand” exceeds the $1.9 billion appropriation, the FCC will adjust its funding allocations “in accordance with the prioritization scheme set forth in” the statute. “Pursuant to our rules, providers may file requests beyond their allocated funds even though there may not be funding to pay such invoices,” but “such requests will remain in pending status if there is insufficient funding to grant the requests in full,” she said.