Lawmakers Urge FCC To Initiate 'Rip And Replace' Effort

By Christopher Cole
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Law360 (November 23, 2020, 8:26 PM EST) -- A bipartisan pair of U.S. House members urged the FCC on Monday to start rolling out a congressionally mandated plan to pay internet providers for the replacement of network equipment that could pose national security risks.

House Energy and Commerce Committee Chairman Frank Pallone Jr., D-N.J., and the committee's ranking Republican, Oregon Rep. Greg Walden, wrote to the Federal Communications Commission to emphasize what they consider the pressing need to lay the groundwork for the program commonly called "rip and replace."

Created under the Secure and Trusted Communications Networks Act, which passed this year, the program has been authorized but not funded by Congress. The committee leaders told FCC Chairman Ajit Pai that the lack of current funds should not stand in the way of getting started, however, because lawmakers will ultimately make sure money is available.

The anticipated funds are meant to reimburse internet service providers for the cost of fixing networks that are now considered vulnerable because they use Chinese-made parts.

"While the program has not yet been funded by Congress, there is demonstrated bipartisan and bicameral support for doing so. In the meantime, carriers are moving forward to remove their suspect equipment and need guidance," Pallone and Walden wrote.

The FCC estimated Sept. 4 following a survey of carriers that "rip and replace" could cost the telecom industry between $1.6 billion and $1.8 billion, far exceeding lawmakers' earlier projection of around $1 billion.

The agency pegged about 50 carriers that currently use Chinese components and would be eligible for government-funded replacements, including Verizon Communications, Windstream Holdings, Pine Belt Communications and Hargray Communications, with eligible reimbursements totaling $1.6 billion.

Pallone and Walden said that funding through the program is critical "because some small and rural communications providers would not otherwise be able to afford these upgrades," and that the FCC is entrusted with developing a list of "suggested replacements for suspect equipment, including physical and virtual communications equipment, application and management software, and services."

"First, the FCC should develop and release the list of eligible replacement equipment, software, and services as soon as possible," the lawmakers wrote. "Second, the agency should reassure companies that they will not jeopardize their eligibility for reimbursement under the program just because replacement equipment purchases were made before the program is funded, assuming other eligibility criteria are met."

The COVID-19 pandemic has "demonstrated the importance of having reliable and secure communications services, and companies eligible for reimbursement under the program will have to engage in very careful and intentional planning to replace suspect equipment while at the same time not disrupting its service," they added.

In an email to Law360 on Monday, an FCC spokesperson said Pai "strongly agrees with the letter's goal of ensuring that our nation's communications networks are secure."

"To that end, the commission has taken significant action to protect against threats to our communications networks, including prohibiting the use of money from the Universal Service Fund to purchase or support equipment or services from companies posing a national security threat," the email said.

Pai just announced that the FCC will vote Dec. 10 on rules to implement the reimbursement program, months before the statutory deadline, according to the spokesperson. "He also agrees that it is more vital than ever that Congress appropriate funds to allow the commission to fully support carriers through the remove and replace process," the spokesperson added.

--Additional reporting by Kelcee Griffis. Editing by Daniel King.

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