More than $3B Needed to Fully Fund FCC Rip and Replace Program: Rosenworcel

The FCC’s final estimate of additional funding it will need to fully satisfy demand for money from the Secure and Trusted Communications Networks Reimbursement Program is $3.08 billion, Chairwoman Jessica Rosenworcel said Friday in letters to leaders of the House and Senate Commerce committees and other top lawmakers. That’s $320 million less than the shortfall the FCC estimated last month before full completion of its review of amended applications to the program, which are to repay U.S. carriers for removing from their networks equipment made by companies deemed a national security risk (see 2206160073). Congress originally appropriated $1.9 billion for the rip and replace program in the FY 2021 appropriations and COVID-19 aid omnibus law (see 2203140061).

The rip and replace program “will require $4.98 billion” to “fund all reasonable and supported cost estimates” for reimbursement and “cover administrative expenses,” reflecting “a current shortfall of $3.08 billion,” Rosenworcel wrote Senate Commerce Chair Maria Cantwell, D-Wash., ranking member Roger Wicker, R-Miss., and other lawmakers. The program would need $4.7 billion to only satisfy all costs for reimbursement to top-priority applicants that have 2 million or fewer subscribers, meaning a shortfall of $2.8 billion. House Commerce advanced the Spectrum Innovation Act legislative package (HR-7624) last week with language to allocate up to $3.4 billion in potential proceeds from a proposed 3.1-3.45 GHz auction for the rip and replace program (see 2207130066).

“Absent an additional appropriation,” the FCC will "apply the prioritization scheme Congress specified in” the FY21 omnibus, Rosenworcel said: “Because demand within the first prioritization group exceeds available funds for the Reimbursement Program, the Commission will prorate reimbursement funds equally to each eligible applicant in the first prioritization group. The pro-rata factor for those allocations will be approximately 39.5% of demand.” Congress designated “accredited public or private non-commercial educational institutions providing their own facilities-based educational broadband services and from health care providers and libraries providing advanced communications services” as second priority, but there were no applicants from this group, Rosenworcel said.

“It is clear that the funding currently in the program still falls far short of the support needed by affected carriers,” said Competitive Carriers Association President Steven Barry: “Today’s update is a call to action -- impacted carriers must have appropriate resources to remove and replace untrusted network equipment without disrupting service or negatively impacting customers. Adequate funding must be provided for the program.” CCA strongly backed HR-7624’s funding proposal.