Biden admin asks for full funding for rip-and-replace

Another $3.1 billion would fully fund eligible carrier requests

The Biden administration has asked Congress for an additional $3.1 billion to fully fund small-and-medium-sized network operators’ efforts to remove and replace network gear and services from banned Chinese vendors.

The Secure and Trusted Communications Networks Act, enacted in 2020, sought to eliminate the use of American communication network infrastructure manufactured by untrusted suppliers – Chinese telecom equipment manufacturers Huawei and ZTE were both singled out. Congress authorized a $1.9 billion reimbursement program aimed at small and rural carriers who applied for assistance. That figure was far outstripped by $5.6 billion that network operators put forward in eligible requests—meaning that there was a $3.08 billion shortfall. At one point, the Federal Communications Commission said that unless Congress fully funded the effort, it would only be able to pay prioritized carriers about 40 cents on the dollar, compared to what they’ve actually requested.

The FCC first released a list of 162 eligible applicants in February 2022, with the warning that providers had requested three times the original budgeted amount. The FCC said that several factors caused the rise in reimbursement requests: That started with a decision to expand the program to include providers servicing up to 10 million subscribers, up from 2 million. Inflation and supply chain constraints also ballooned costs. What’s more, the fund now requires rip-and-replacement work to be done within a year, requiring a significant premium for an already challenging labor market. What’s more, the preliminary cost estimates ascertained in the original study didn’t actually account for the full range of carrier costs associated with reimbursement, as required by the final legislation.

FCC Commissioner Geoffrey Starks said in a statement that rip-and-replace funding is an “urgent national—and national security—priority” and will enable removal of insecure network equipment, including near military bases.

“Full funding for the ongoing removal of insecure equipment and software from communications infrastructure and subsequent replacement with trusted alternatives is critical for the safety and availability of key American wireless networks,” said Tim Donovan, president and CEO of the Competitive Carriers Association. “We urge Congress to act swiftly to fully fund the Secure and Trusted Communications Networks Reimbursement Program to ensure the program can succeed, that national security is protected, and that millions of consumers that live or travel in rural America do not lose connectivity.”

Among the other requests in the supplemental funding proposal is an additional $6 billion to continue to fund the Affordable Connectivity Program (ACP) through 2024; ACP provides monthly subsidies for broadband services. Starks said that the program is currently helping more than 21.4 million households across the country get and maintain internet service.