Van Hollen, Others Eye Directly Appropriating More Rip and Replace Money

Several telecom-focused congressional leaders told us they’re more seriously considering directly appropriating $3.08 billion to fully close the FCC’s Secure and Trusted Communications Networks Reimbursement Program funding shortfall amid the ongoing stall in talks on a spectrum legislative package that top lawmakers long hoped could pay for the additional funding (see 2311010001). The outlook for a spectrum legislative deal is very dim while lawmakers continue to wait for DOD to release a much-anticipated report on repurposing the 3.1-3.45 GHz band for commercial 5G use (see 2310180062). Communications policy-focused lobbyists and officials are closely following how work on FY 2024 appropriations legislation progresses in the weeks ahead for signs to indicate whether a change in tack on rip and replace takes place.

Senate Appropriations Financial Services Subcommittee Chairman Chris Van Hollen of Maryland and other prominent Democrats are publicly favoring a direct funding approach in the wake of President Joe Biden specifically mentioning rip and replace funding in late October as part of a supplemental budget request (see 2310250075). Rep. Ashley Hinson, R-Iowa, led filing Monday of a House companion to the Defend Our Networks Act (S-1245), which would reallocate 3% of unspent and unobligated funding from the FY 2021 appropriations and COVID-19 aid omnibus law, the 2021 American Rescue Plan Act and other COVID-19 aid packages to make up the rip and replace program’s deficit (see 2304210069).

“We’re looking at either” a continuing resolution to extend existing federal funding past Nov. 17 or the regular FY24 appropriations process as “potential vehicles” for allocating more rip and replace money in response to Biden’s supplemental request, Van Hollen told us Monday night. Neither the FY24 FCC funding bill (HR-4664) the House is considering this week nor the Senate Appropriations Committee's equivalent measure includes rip and replace money.

“There are no guarantees” at this point whether the rip and replace money will make it into any appropriations measure this year, but addressing the funding shortfall is “something we’ve got to get done” one way or another, Van Hollen said. Lawmakers are still deciding how long another CR would last, with many House leaders eyeing an extension into January. The Competitive Carriers Association, NTCA and seven other entities wrote Senate Majority Leader Chuck Schumer, D-N.Y., Minority Leader Mitch McConnell, R-Ky., and Appropriations leaders Tuesday urging them to include the money in “emergency supplemental spending legislation.” CCA and other groups sent a similar letter to Senate Appropriations leaders last week.

Several lobbyists also cited renewed chatter that Senate Commerce Committee ranking member Ted Cruz, R-Texas, may be getting close to filing his own spectrum bill to counter the House Commerce Committee-cleared Spectrum Auction Reauthorization Act (HR-3565). Senate Commerce Chair Maria Cantwell, D-Wash., backs HR-3565 (see 2305240069). Cruz (see 2306130040) and Senate Communications Subcommittee ranking member John Thune, R-S.D., have both voiced reservations about HR-3565’s proposal for using auction revenue to pay for priorities beyond rip and replace.

'Pay-for' Politics

“We need to appropriate the additional funding for rip and replace” instead of waiting for the money to materialize as part of a spectrum deal, Thune told us. He confirmed he’s “working with leadership on” Senate Commerce to produce an alternative to HR-3565 that takes a “more sensible” approach. “What we’ve done so far” on rip and replace funding “isn’t covering the total cost of that and it’s an important priority,” Thune said: “How we do that is still an open question. I don’t think it necessarily has to be part of a supplemental appropriations bill” as Biden suggested and is “something that we ought to be able to do through the regular appropriations cycle if we make it a priority.”

House Communications Subcommittee ranking member Doris Matsui, D-Calif., indicated she also formally favors direct appropriations for rip and replace while HR-3565 remains stalled. “I basically suggested” a U-turn on rip and replace in an October letter to Biden that also sought stopgap funding for the FCC’s affordable connectivity program (see 2310260065), she told us. “A lot of smaller” companies now participating in the rip and replace program “can’t do anything” because the FCC is prorating reimbursement costs. “We’ve got to get that money out there” so carriers can “do the right thing” and remove suspect Huawei and ZTE equipment from their networks, Matsui said.

“I’m open to ideas” on alternatives like the appropriations process to fully fund rip and replace, though “I’m certainly hopeful that something can come together in the spectrum conversation to provide certainty” on the FCC’s spectrum mandate and simultaneously fund important telecom projects, said Senate Communications Chairman Ben Ray Lujan, D-N.M. Rip and replace in particular “has to be funded in order to provide trusted networks to keep people connected across the country” and lawmakers in both parties “widely” support it.

House Communications Chairman Bob Latta, R-Ohio, remains skeptical about moving away from the auction proceeds approach in HR-3565. “Using future spectrum auction revenue would” guarantee the extra rip and replace money “would be paid for,” he told us. “It’s our obligation to get this done and we should have” bridged that funding gap “a long time ago.” Latta is leery of the Biden administration’s supplemental request because it doesn’t articulate how it proposes Congress pay for the rip and replace money absent new spectrum revenue. “A lot of the things the White House has been requesting lately don’t have a pay-for, so they’d just be adding more to the deficit,” Latta said.

House Communications member Rep. Kat Cammack, R-Fla., didn’t mention alternatives for funding rip and replace during a Tuesday Punchbowl News event but highlighted HR-3565 as a way to give the program additional money.

'No Movement'

CCA doesn't “have a preference for one vehicle or another” for allocating the additional rip and replace money, despite the group participating in the pro-appropriations letters to Senate leaders, Angela Simpson, senior vice president-legal and regulatory affairs, said in an interview. “I think what we really want is for it to be included in whatever is moving” fastest through Congress, whether that's the regular FY24 FCC spending bill, supplemental funding legislation, a CR or a spectrum package.

“There's a lot of moving parts right now” given the looming threat of a government shutdown and CCA wants to keep lawmakers aware of its concerns amid that debate, Simpson said. The group recently urged the FCC to tentatively approve payouts to rip and replace participants above the 39.5% level the FY21 appropriations omnibus mandated the commission prorate them to amid the funding shortfall so additional money can flow out quickly once Congress approves the $3.08 billion.

New America’s Open Technology Institute's Michael Calabrese suggested separating out reauthorizing the FCC's mandate from other matters that HR-3565's backers want to address simultaneously, including the lower 3 GHz band, would result in a Congressional Budget Office legislative score that would still be “high enough to more than cover” full rip-and-replace reimbursement. “The problem is that it doesn't cover” the other projects lawmakers “are looking to pay for” in HR-3565, including up to $14.8 billion for next-generation 911 tech upgrades and $5 billion for middle-mile projects, said Calabrese, OTI's Wireless Future Program director.

A deal on spectrum legislation that funds rip and replace would be “a net positive, but it doesn't change the fact that we need to get this done now,” said Digital Progress Institute President Joel Thayer. “Congress is going to have to figure out” a solution and it's “probably not going to be the mechanism” HR-3565's backers envisioned. The Biden administration made clear it's "not going to wait for the spectrum bill to move forward on that funding,” but whether HR-3565's supporters “are willing” to shift gears now is “another question,” said Joe Kane, Information Technology and Innovation Foundation director-broadband and spectrum policy.