The FCC this week gave Congress an update on the status of the Secure and Trusted Communications Networks Act, aka the Huawei rip & replace program. But given Congress’ inability to address a major funding shortfall to implement the program, it’s no surprise there’s not a lot of progress to convey.
In fact, Competitive Carriers Association (CCA) President and CEO Tim Donovan didn’t mince words in sizing up the report.
“The FCC’s status report shows that the program is clearly floundering in the absence of full funding by Congress,” Donovan said in a statement provided to Fierce. “For example, half of respondents indicated that a lack of funding is a challenge in completing their projects, and some even indicated that they will not start work on their projects unless they receive additional funding. The need for full funding is very urgent in order for the program to succeed and Congress’s national security objectives to be met.”
Donovan took over the CCA CEO post January 1, succeeding Steve Berry, who retired at the end of 2022 after leading the organization for 13 years. Donovan’s comments are much in the same spirit as Berry, who late last year said it was “very disappointing” that the remaining $3.08 billion shortfall in funding for the program was not addressed in the omnibus spending bill in December.
CCA has previously said that without enough funding to replace Chinese gear, small telecom operators could go out of business. Their demise also would affect larger mobile carriers that rely on them for roaming in rural areas.
Some of the companies in the rip & replace program are Copper Valley Wireless, Gogo Business Aviation, Inland Cellular, NE Colorado Cellular, Pine Belt Cellular and Triangle Communication Systems.
In July 2022, the FCC announced the 126 applications filed by 85 entities that had been approved for participation in the reimbursement program. But the final tally was $4.64 billion, and Congress only appropriated $1.9 billion to fund it, leading to the shortfall of more than $3 billion.
The FCC implemented a prioritization scheme to keep the ball rolling, but the allocation meant it could only pay initial reimbursements at about 39.5% of the total amounts.
The rip & replace program was mandated by Congress amid concerns that Chinese suppliers like Huawei threaten the nation’s security. A lot of smaller, regional carriers installed Huawei gear in their networks years ago. The anti-Chinese vendor program has largely drawn bipartisan support, but apparently not the kind of support it needs to get it fully funded.
According to the FCC’s January 10 report, roughly half of respondents indicated to the agency that a lack of funding is a challenge. About 2% indicated they will not start work on their removal and replacement projects unless they receive additional funding.
Supply chain problems and severe weather are also affecting operators’ ability to switch out gear and replace it.
The FCC regularly updates Congress on the status of the rip & replace program. The next status update is due July 10, 2023.