NARUC Telecom Panel Clears Relaxed Rip-and-Replace Resolution

AUSTIN – State commissioners softened a draft resolution meant to discipline telecom providers still using network equipment that might pose a national security risk. At NARUC’s conference here Tuesday, the Telecom Committee unanimously supported a measure that would recommend lower scoring for grant applications by providers with equipment on the FCC’s covered list.

“NARUC recommends that federal, state, or local governmental bodies providing universal service support, broadband deployment support, or any other form of grant funding consider including evaluation criteria that disincentivizes participating carriers that may utilize in its network equipment on the FCC’s Covered List,” said the revised draft by Telecom Committee Chair Tim Schram (R). The committee-passed resolution still needs NARUC board approval.

An earlier version would have recommended no public subsidies to affected companies (see 2307050046). But after talking to industry and fellow commissioners, Schram decided that was "probably going a little far.” Under the revised measure, companies are “not kicked out of out of the grant process, but they're not going to score as high,” said the Nebraska Public Service Commission member. “There has to be some kind of disciplinary financial action in place that helps motivate them to get that equipment removed as soon as possible.”

The changes "strike a finer balance" that doesn't punish companies having a hard time doing rip-and-replace work, said Ohio Public Utilities Commissioner Daniel Conway, noting he was one commissioner who had raised concerns with the initial draft.

Wireless companies face financial and logistical difficulties replacing Huawei and ZTE equipment in their network, said Conway on a later panel. The challenges include getting enough funding for the federal rip-and-replace reimbursement program and overcoming workforce and supply chain issues, the commissioner said.

About $1.9 billion was appropriated for the rip-and-replace reimbursement program, but it was based on an underestimate of costs, said Pine Belt Communications President John Nettles: It turned out $5.6 billion was needed. "We need to remove the uncertainties of the funding shortfall now."

Pine Belt selected ZTE equipment a decade ago to win a bid for FCC Mobility Fund support, said Nettles. The FCC wanted to fund cost-effective projects and Pine Belt found that ZTE was the least expensive option, said Nettles: At the time, there were no restrictions on using the Chinese company’s equipment.

SI Wireless isn’t getting enough funding to cover its entire network and payments aren't coming quickly enough from the FCC, said CEO Leslie Williams. Finding certified workers is another problem, especially with many companies trying to do the same work at the same time, he said. If small companies can only get 40% of funding, customers will lose coverage in places where equipment isn’t replaced, he said.

Williams is “not 100% sure” what risk is posed by ZTE and Huawei equipment, said the CEO: Many networks use their equipment and not enough information has been released to show the Chinese companies are bad actors. If not for the ban, he said, SI could still use a fully functional and 5G-upgradeable network.

NARUC Notebook

The FCC makes progress with each broadband fabric edition, said Consumer and Governmental Affairs Deputy Bureau Chief Eduard Bartholme at NASUCA’s collocated conference here Monday. Twice a year the commission updates the fabric, which shows locations where broadband should be. After version one found 113 million locations, the FCC added 1 million locations in version two and another 600,000 in version three, he said. It’s good to see nearly half the number of additions in the latest round, “and it potentially gets us closer to being on track with the fact that every year a million housing locations come on board nationally,” Bartholme said. “We have a lot of confidence with this dataset.” Sept. 8 is the “target date” to files challenges for version three, he noted. On ISP-reported broadband availability data, Bartholme said one of the biggest criticisms the FCC gets is that the agency takes ISPs at their word and puts the onus on others to correct data. But that’s the system Congress required, he said. About 4 million challenges have been filed to date, with 95% resolved one way or the other, said Bartholme. The FCC official couldn’t give a breakdown of how many of those were upheld but said his “understanding is there’s been a pretty high success rate in the challenge process.”