Secure Networks Act: Third Report Shows Acceleration

Photographer: Qilai Shen/Bloomberg
Photographer: Qilai Shen/Bloomberg

I.              Program Background

The Secure and Trusted Communications Networks Act of 2019 (the “Secure Networks Act” or the “Act”), after unanimous approval by the House of Representatives in mid-December 2019, was passed by the Senate on February 27, 2020, and signed by President Trump on March 12, 2020.

 

The Secure Networks Act requires the Federal Communications Commission (the “FCC” or the “Bureau” or the “Commission”) to submit a report on both (1) “the implementation of the [Reimbursement] Program by the Commission” and (2) “the work by recipients of reimbursements under the [Reimbursement] Program to permanently remove, replace, and dispose of covered communications equipment or services” in their networks. FCC submits these reports to Congress every 180 days.

 

On December 27, 2020, the Consolidated Appropriations Act of 2021 (the “CAA”) became law. Section 906 of the CAA appropriated $1.9 billion to the FCC to “carry out” the Secure and Trusted Communications Networks Act of 2019, of which $1.895 billion (the “FCC Current Allocation”) was required to be used for the Reimbursement Program (the “Program”).

 

The FCC Current Allocation is only 39.5% of the $4.98 billion total approved reimbursement applications.[1] Of the FCC Current Allocation, approximately 35.9% or $667 million (the “SRG Client Allocation”) is allocated to SRG’s clients. The Bureau selected Ernst & Young LLP (“E&Y”) as the Fund Administrator who manages the Reimbursement Program and provides recommendations to the Bureau.[2]

[1] The FCC can currently fund 39.5% of the Program (see Linda Hardesty, FCC Can Only Fund 39.5% of Huawei Rip and Replace Costs at This Time, FierceWireless (July 18, 2022), https://www.fiercewireless.com/wireless/fcc-can-only-fund-395-huawei-rip-and-replace-costs-time.
[2] FCC, Wireline Competition Bureau Announces Selection of the Secure and Trusted Communications Networks Reimbursement Program Fund Administrator, FCC (April 29, 2021), https://docs.fcc.gov/public/attachments/DA-21-490A1.pdf.