Federal Communications Commission DA 22-131 DA 22-131 Released: February 9, 2022 WIRELINE COMPETITION BUREAU ANNOUNCES APPLICATIONS FILED FOR THE SECURE AND TRUSTED COMMUNICATIONS NETWORKS REIMBURSEMENT PROGRAM WC Docket No. 18-89 By this Public Notice, the Wireline Competition Bureau (Bureau) announces the applications filed for the Secure and Trusted Communications Networks Reimbursement Program (Reimbursement Program). The Reimbursement Program received 181 applications and, upon initial review by the Reimbursement Program Fund Administrator, the gross cost estimate demand for Reimbursement Program support contained in the applications initially found eligible and acceptable for filing is nearly $5.6 billion. The gross cost estimate demand does not mean that all cost estimates have been found reasonable and approved. The Bureau will make those determinations, with the assistance of the Reimbursement Program Fund Administrator, after conducting a thorough review of the applications. The filing window closed on January 28, 2022, and the Commission commenced the official 90-day application review period for the Reimbursement Program on January 31, 2022. 47 CFR § 1.50004(d); see also Wireline Competition Bureau Finalizes Application Filings, Procedures, Cost Catalog, and Replacement list for the Secure and Trusted Communications Networks Reimbursement Program, WC Docket 18-89, Public Notice, DA 21-947, 2021 WL 3466248 at *11, paras. 34 (WCB Aug. 3, 2021) (Finalized Reimbursement Process Public Notice) (“The 90-day review period will commence on the next business day following the close of the filing window, per the Commission's rules.”). Accordingly, the 90-day application review period commenced on Monday, January 31, 2022. Given the number and complexity of the applications filed as further discussed herein, the Bureau will extend the application review period by an additional 45 days as authorized by section 4(d)(3)(A)(ii) of the Secure and Trusted Communications Networks Act of 2019, as amended (Secure Networks Act), and section 1.50004(d) of the Commission’s rules. 47 U.S.C. § 1603(d)(3)(A)(ii); 47 CFR § 1.50004(d). Accordingly, the Bureau’s deadline for acting on the submitted applications is Wednesday, June 15, 2022. Background. As directed by the Secure Networks Act, the Commission established the Reimbursement Program to reimburse providers of advanced communications services with ten million or fewer customers for reasonable costs incurred in the removal, replacement, and disposal of covered communications equipment or services from their networks that pose a national security risk. Secure and Trusted Communications Networks Act of 2019, Pub. L. No. 116-124, § 4(a)-(c), 134 Stat. 158 (2020) (codified as amended at 47 U.S.C. §§ 1601–1609) (Secure Networks Act). The Commission implemented the Secure Networks Act on December 10, 2020. Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs, WC Docket No. 18-89, Second Report and Order, 35 FCC Rcd 7821 (2020) (2020 Supply Chain Order). On July 13, 2021, the Commission amended its rules, consistent with amendments to the Secure Networks Act included in the Consolidated Appropriations Act, 2021. Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs, WC Docket No. 18-89, Third Report and Order, FCC 21- 86, 2021 WL 3024271, at 49-51, Appx. A (July 13, 2021) (2021 Supply Chain Order). The Commission, in the 2021 Supply Chain Order, clarified that for purposes of the Reimbursement Program, covered communications equipment or services is limited to the communications equipment or services produced or provided by Huawei Technologies Company (Huawei) or ZTE Corporation (ZTE), that were obtained by providers on or before June 30, 2020. 2021 Supply Chain Order, 2021 WL 3024271, at 49-51, Appx. A. See generally Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs – Huawei Designation, PS Docket No. 19-351, Order, 35 FCC Rcd 6604 (PSHSB 2020) (Huawei Designation Order); Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs – ZTE Designation, PS Docket No. 19-352, Order, 35 FCC Rcd 6633 (PSHSB 2020) (ZTE Designation Order). To participate in the Reimbursement Program, eligible providers were required to file an FCC Form 5640 Application Request for Funding Allocation, 47 CFR § 1.50004(c). using the Bureau’s dedicated online application filing portal. Finalized Reimbursement Process Public Notice at *6. Each applicant was required to include in its application estimates for the costs that will be reasonably incurred for the removal, replacement, and disposal of covered communications equipment and services. 47 CFR § 1.50004(c)(1)(i). These cost estimates will form the basis for the Bureau’s funding allocation determinations. Id. § 1.50004(c)-(d). Once an allocation is issued, participants can then seek disbursements from the allocation as expenses are incurred. Id. § 1.50004 (d). Applications Filed. A total of 181 applications were filed to participate in the Reimbursement Program. As some entities filed multiple applications, the 181 applications filed amount to 96 unique filing entities. Of those filed, 162 have been initially found eligible and acceptable for filing. See Appx. A. An initial finding of eligibility and acceptability for filing does not guarantee application approval and participation into the Reimbursement Program. Such determinations will be made following a comprehensive review of the applications by the Bureau, with the assistance of the Reimbursement Program Fund Administrator. Of those applications filed and initially found eligible and acceptable for filing, the gross cost estimate demand for support for the removal, replacement, and disposal of Huawei and ZTE equipment is approximately $5.6 billion. Further, based on an initial review of the applications, this support would go towards the strengthening of our nation’s networks by removing, replacing, and disposing of approximately 24,000 units of covered communications equipment and services across approximately 8,400 number of locations throughout the United States and its territories. As required by the Secure Networks Act and the Commission’s rules, applicants whose applications are found materially deficient will have a 15-day opportunity to cure the deficiency before their application is denied. 47 U.S.C. § 1603(d)(3)(B); 47 CFR § 1.50004(d)(1). Such notice will be distinct from this Public Notice and the 15-day cure period will commence on the date the individual email notification is sent by the Commission and received by the applicant. Finalized Reimbursement Process Public Notice at *12. The Reimbursement Program Fund Administrator will individually notify those applicants. Finalized Reimbursement Process Public Notice at *12. Funding Available for Allocation. Congress appropriated $1.9 billion to the Commission to “carry out” the Secure Networks Act, of which $1.895 billion must be used for the Reimbursement Program. CAA § 906. Section 906 provides that “[t]here is appropriated to the Federal Communications Commission, out of amounts in the Treasury not otherwise appropriated, for fiscal year 2021, to remain available until expended—. . . (2) $1,900,000,000 to carry out the Secure and Trusted Communications Networks Act of 2019 (47 U.S.C. 1601 et seq.), of which $1,895,000,000 shall be used to carry out the program established under section 4 of that Act (47 U.S.C. 1603).” The funding appropriated by Congress is not only for reimbursing program recipients but also covers the expenses incurred by the Commission to implement and operate, that is, “carry out,” the Reimbursement Program. See CAA §§ 901, 906. The gross demand for requested funding, based on an initial review of the cost estimates contained in the applications submitted, exceeds the $1.9 billion appropriated for the Reimbursement Program. See Finalized Reimbursement Process Public Notice at *11 (“the Reimbursement Program Fund Administrator will conduct an initial review of the applications to help the Bureau determine . . . the gross estimate demand contained in those applications.”). If available funding is insufficient to issue funding allocations in full to all approved applicants, then the Commission will apply the prioritization scheme directed by Congress and specified in the Commission’s rules. CAA § 901(1)(C); 47 CFR § 1.50004(f); 2021 Supply Chain Order at 24-26, paras. 53-59. Specifically, under this scheme, the Commission will allocate available funding “first, to approved applications that have 2,000,000 or fewer customers . . . , [then] to approved applicants that are accredited public or private non-commercial educational institutions providing their own facilities-based educational broadband services . . . [and] health care providers and libraries providing advanced communications service, [then] to any remaining approved applicants determined to be eligible for reimbursement under the [Reimbursement] Program.” CAA § 901(1)(C)(ii); 47 CFR § 1.50004(f); 2021 Supply Chain Order at 24-26, paras. 53-59. The Rural Wireless Association, Inc. (“RWA”) filed a Petition for Reconsideration of the Commission’s decision in the 2021 Supply Chain Order to replace its initial prioritization scheme with the scheme provided by the CAA. See Petition for Reconsideration of the Rural Wireless Association, Inc., WC Docket No. 28-89 (filed Sept. 22, 2021). The Petition is pending. If available funding is insufficient to satisfy all funding requests in a prioritization category, the Bureau will prorate the available funding equally across all requests in the relevant prioritization category to ensure that total funding allocated does not exceed the funding available. Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs, WC Docket No. 18-89, Second Report and Order, 35 FCC Rcd 14284, 14349, para. 157 (2020) (2020 Supply Chain Order). Specifically, the Bureau will determine a pro-rata factor by dividing the total amount of available funding by the total amount of funding requested. The Bureau will then multiply the pro-rata factor by the total amount of support requested by each applicant in the prioritization category and then the Bureau will allocate funds to each eligible applicant in the prioritization category consistent with this calculation. 47 CFR § 1.50004(f)(1); see also 2020 Supply Chain Order, 35 FCC Rcd at 14352, para. 163. Upon initial review, the cost estimates submitted with applications appear to be significantly higher than the estimated amounts reported to the Commission in the 2019 data collection. See Wireline Competition Bureau and Office of Economics and Analytics Release Results from Supply Chain Security Information Collection, Public Notice, 35 FCC Rcd 9471, 9472 (WCB 2020) (Information Collection Results Public Notice). The Commission continues to closely review the applications, but factors contributing to the increase in cost estimates include: an expansion, following the 2019 data collection, in the Reimbursement Program from Eligible Telecommunications Carriers to all providers of advanced communications services with fewer than 10 million customers; increased costs due to supply chain constraints and/or inflation since 2019; additional costs associated with expediting projects to meet the statutory obligation to complete the removal, replacement, and disposal process within one year from the initial disbursement of funds; 2020 Supply Chain Order, 35 FCC Rcd at 14331, para. 169 (establishing a one-year timeline for removal, replacement, and disposal). and other costs of complying with Reimbursement Program requirements not accounted for when cost estimates were reported in 2019. To increase accountability measures for the Reimbursement Program, the Commission, in the 2020 Supply Chain Order, adopted a number of measures to protect against waste, fraud, and abuse. 2020 Supply Chain Order, 35 FCC Rcd at 14331, para. 109. As a result, the Fund Administrator and Commission are carefully reviewing all cost estimates submitted with applications to determine funding allocations. Finalized Reimbursement Process Public Notice at *8-9. Both the Reimbursement Program Fund Administrator and the Commission will closely scrutinize Reimbursement Claim Requests to ensure that reimbursement is limited to reasonable expenses that are actually incurred. See 47 CFR § 1.50004(g); 2020 Supply Chain Order, 35 FCC Rcd at 14353, para. 165. Additionally, consistent with the Secure Networks Act, Reimbursement Program recipients are subject to regular audits and reviews of reimbursements under the Program and other investigations, such as field investigations, to evaluate their compliance with the statutory and regulatory requirements for the program. 47 CFR § 1.50004(o); 2020 Supply Chain Order, 35 FCC Rcd at 14331, para. 109. As directed by the Secure Networks Act, the Commission is “tak[ing] all necessary steps to avoid waste, fraud, and abuse with respect to the Program.” 47 U.S.C. § 1603(e)(1). Application Review Period. The Commission’s rules and the Secure Networks Act require the Bureau to “approve or deny” Reimbursement Program applications no later than 90 days after the close of the relevant filing window. 47 U.S.C. § 1603 (d)(3)(A)(i); 47 CFR §1.50004(d). During the application review period, the Bureau “will determine whether the application is complete, whether the applicant is eligible for the Reimbursement Program, and . . . assess the reasonableness of the cost estimates provided by the applicant.” 47 CFR § 1.50004(d). If additional time is needed to review the applications, the Bureau may extend the deadline of the application review period by an additional 45 days “if it determines that an excessive number of applications have been filed during the window and additional time is needed to review the applications.” Id. Based on the number of applications initially determined eligible and acceptable for filing, the Bureau will need to review and evaluate the reasonableness of approximately 439,000 separate cost estimates contained in 162 applications. Given the number and complexity of the applications received and the large volume of costs estimates requiring review, the Bureau will need additional time beyond the 90-day period to review the applications. Finalized Reimbursement Process Public Notice at *13. The Bureau, after considering various factors impacting application review, thus finds an extension necessary and accordingly extends the 90-day application review period by an additional 45 days as permitted by the Commission’s rules. 47 U.S.C. § 1603(d)(3)(A)(ii); 47 CFR § 1.50004(d). Accordingly, the deadline for the Bureau to “approve or deny” the submitted applications is extended from May 1, 2022 to June 15, 2022. Additional Information. We encourage all applicants for the Reimbursement Program to review the Finalized Reimbursement Process Public Notice, See generally Finalized Reimbursement Process Public Notice. which adopts the final procedures for the Reimbursement Program application filing process. Applicants with questions regarding its application may contact the Fund Administrator Help Desk by email at SCRPFundAdmin@fcc.gov or by calling (202) 418-7540 from 9:00 AM ET to 5:00 PM ET, Monday through Friday, except for Federal holidays. General information and Commission documents regarding the Reimbursement Program are available on the Reimbursement Program webpage, https://www.fcc.gov/supplychain. All non-confidential filings submitted by participants in the Reimbursement Program are publicly available and searchable in the Public Search database, which is now available through the online portal at https://www.fcc.gov/supplychain. 47 U.S.C. § 1603(d)(8); 2020 Supply Chain Order, 35 FCC Rcd at 14370, para. 215. -FCC- APPENDIX FCC Secure and Trusted Communications Networks Program Applications Found Initially Eligible and Acceptable for Filing Applicant Name File Number Angeles Enterprises SCRP0001009 AST Telecom, LLC d/b/a Bluesky SCRP0001076 Beamspeed, L.L.C. SCRP0001010 Board of Trustees, Northern Michigan University SCRP0001040 Central Louisiana Cellular, LLC SCRP0001042 Commnet Wireless, LLC SCRP0001026 SCRP0001027 SCRP0001028 SCRP0001029 Copper Valley Wireless, LLC SCRP0001157 Country Wireless LLC SCRP0001017 Eastern Oregon Telecom, LLC SCRP0001037 Eltopia Communications, LLC SCRP0001167 FIF Utah LLC SCRP0001006 FirstLight Fiber, Inc. SCRP0001005 Flat Wireless, LLC SCRP0001103 Gallatin Wireless Internet, LLC SCRP0001039 Gigsky, Inc. SCRP0001143 Gogo Business Aviation LLC SCRP0001134 Hargray Communications Group, Inc. SCRP0001101 Hotwire Communications, Ltd. SCRP0001146 SCRP0001147 SCRP0001148 Hunter Communications & Technologies LLC SCRP0001133 IdeaTek Telcom, LLC SCRP0001139 Inland Cellular LLC SCRP0001144 Interoute US LLC SCRP0001030 James Valley Cooperative Telephone Company SCRP0001105 Kings County Office of Education SCRP0001142 LakeNet LLC SCRP0001145 Latam Telecommunications, L.L.C. SCRP0001168 Leaco Rural Telephone Cooperative, Inc. SCRP0001175 Level 3 Communications, LLC SCRP0001043 SCRP0001044 SCRP0001045 SCRP0001047 SCRP0001050 SCRP0001051 SCRP0001052 SCRP0001053 SCRP0001054 SCRP0001055 SCRP0001056 SCRP0001057 SCRP0001058 SCRP0001059 SCRP0001060 SCRP0001061 SCRP0001062 SCRP0001063 SCRP0001064 SCRP0001065 SCRP0001066 SCRP0001067 SCRP0001068 SCRP0001069 SCRP0001070 SCRP0001071 SCRP0001072 SCRP0001073 SCRP0001074 SCRP0001075 SCRP0001077 SCRP0001078 SCRP0001079 SCRP0001080 SCRP0001081 SCRP0001082 SCRP0001083 SCRP0001085 SCRP0001086 SCRP0001088 SCRP0001091 SCRP0001093 SCRP0001094 SCRP0001095 SCRP0001097 LIGTEL Communications Inc. SCRP0001155 Mark Twain Communications Company SCRP0001021 Mediacom Communications Corporation SCRP0001140 Metro Fibernet, LLC SCRP0001016 MHG Telco LLC SCRP0001023 Millennium Telcom, L.L.C., dba OneSource Communications SCRP0001152 Monmouth Telephone & Telegraph SCRP0001032 Natural G.C. Inc. SCRP0001008 NE Colorado Cellular Inc SCRP0001106 SCRP0001107 SCRP0001108 SCRP0001109 SCRP0001110 SCRP0001111 SCRP0001113 SCRP0001114 SCRP0001115 SCRP0001116 SCRP0001117 SCRP0001118 SCRP0001119 SCRP0001120 SCRP0001121 SCRP0001122 SCRP0001123 SCRP0001124 SCRP0001125 SCRP0001126 SCRP0001135 SCRP0001141 Nemont Telephone Cooperative, Inc. SCRP0001084 New Wave Net Corp SCRP0001012 NfinityLink Communications, Inc. SCRP0001173 NTInet, inc SCRP0001011 NTUA Wireless, LLC SCRP0001024 SCRP0001025 One Ring Networks, Inc. SCRP0001001 Panhandle Telecommunication Systems Inc SCRP0001033 Pine Belt Cellular, Inc. SCRP0001038 Pine Telephone Company SCRP0001034 SCRP0001035 SCRP0001036 Plateau Telecommunications, Incorporated SCRP0001112 PocketiNet Communications Inc. SCRP0001031 Point Broadband Fiber Holding, LLC SCRP0001128 SCRP0001129 SCRP0001130 SCRP0001131 SCRP0001132 Premier Holdings LLC SCRP0001150 PTA-FLA, Inc. SCRP0001018 Puerto Rico Telephone Company, Inc. SCRP0001162 Roome Telecommunications Inc SCRP0001154 Santel Communications Cooperative, Inc. SCRP0001151 SI Wireless, LLC SCRP0001013 Skybeam, LLC SCRP0001156 SCRP0001158 SCRP0001159 SCRP0001161 South Canaan Telephone Company SCRP0001099 Southern Ohio Communication Services Inc SCRP0001019 Stealth Communications SCRP0001138 TelAlaska Cellular, Inc. SCRP0001160 Texas 10, LLC SCRP0001041 Transtelco Inc. SCRP0001170 Triangle Communication Systems Inc SCRP0001048 Triangle Telephone Cooperative Association, Inc. SCRP0001046 Trinity Basin Preparatory, Inc. SCRP0001002 Union Telephone Company SCRP0001087 SCRP0001089 SCRP0001090 SCRP0001092 SCRP0001096 SCRP0001098 United Wireless Communications, Inc. SCRP0001104 Utah Telecommunication Open Infrastructure Agency SCRP0001102 Velocity Communications, Inc. SCRP0001136 Virginia Everywhere, LLC SCRP0001022 Vitelcom Cellular, Inc. d/b/a Viya Wireless SCRP0001020 Webformix Internet Company SCRP0001003 Windstream Communications LLC SCRP0001004 Windy City Cellular SCRP0001015 WorldCell Soutions, LLC SCRP0001137 Xtreme Enterprises LLC SCRP0001171 Zito West Holding, LLC SCRP0001049 2