Cybersecurity Standards, More Funding for Rip and Replace, AT&T Stocks Hit Decade Low

July 18, 2023 — The Joe Biden administration on Tuesday endorsed a proposal from the head of the Federal Communications Commission to create a cybersecurity certification and labeling program intended to set regulatory benchmarks for smart devices and protect customers from cyberattacks.

The program would involve the National Institute of Standards and Technology publishing security standards which might include strong default passwords, data protection, software updates and incident detection capabilities, according to the release.

The standards would be applied to a wide range of smart devices including phones, household appliances, and climate control systems. FCC Chairwoman Jessica Rosenworcel likened it to the Energy Star program.

“The Administration—including the Cybersecurity and Infrastructure Security Agency—would support the FCC in educating consumers to look for the new label when making purchasing decisions, and encouraging major U.S. retailers to prioritize labeled products when placing them on the shelf and online,” the administration said in a press release.

Manufacturers that fulfill established cybersecurity requirements would apply for a universal trademark and customers would be able to scan a QR code alongside the trademark to access and compare specific security information across different devices, the FCC said.

Once the proposal is adopted by a full vote of the FCC, it would be issued for public comment and is expected to go into force in 2024.

Several electronics manufacturers, retailers and trade associations have voiced support for the program, including Amazon, Best Buy, Consumer Reports, Google, Qualcomm, and Samsung Electronics, among others.

The proposal follows calls from several agency and federal officials for more government guidelines to address cybersecurity problems and safeguard consumers from cyberattacks.

Calls for more funding for rip-and-replace program

A group of bipartisan lawmakers Monday released a statement urging Congress to allocate more funding for the FCC’s rip-and-replace program, which seeks to compensate carriers to remove threatening Chinese equipment from their networks.

“The longer Congress waits to address the funding shortfall in this program, the more we jeopardize America’s national security by leaving our networks vulnerable to espionage by adversaries like China,” read the statement.

In April, several senators sponsored the Defend Our Network Acts to increase funding for the program. This followed a statement from Sen. Mark Warner, D-VA, calling for more financing for the program in the Senate.

Cathy McMorris Rodgers, R-WA, and Frank Pallone, D-NJ, who co-signed the Monday statement along with Reps. Bob Latta, R-OH, and Doris Matsui, D-CA, introduced the Spectrum Auction Reauthorization Act of 2023 in May, which in the meantime would direct spectrum auction money to replenish the rip and replace program. It has passed the committee in May and is pending a full House vote.

In light of the funding shortage, FCC Chairwoman Rosenworcel wrote to Congress in May signaling the agency had the right to extend the payment deadline by an additional six months beyond July.

AT&T stocks hit decade low

AT&T stocks dropped to $13.53 per share after closing on Monday, its lowest price in three decades, following a Wall Street Journal investigation exposing the use of toxic lead wires by telecommunication companies.

The Journal’s investigation published on July 9 revealed that telecom giants including AT&T and Verizon had not addressed the issue of over 2,000 lead-covered wires. According to the assessment, the pollution in certain locations has already reached dangerous levels, exceeding the legal standard and endangering the ecosystem and nearby residents.

The Journal put the blame on “the relics of the old Bell System,” a reference to the conglomerate of telecommunications firms that controlled the American market for more than a century until its breakup in 1983.

Shares of AT&T, Verizon, and Frontier Communications have all slided after the probe became public. AT&T dropped 13 percent since then, Verizon was down 7.5 percent on Monday, and Frontier Communications slipped 16 percent.

In response to the accusation, a spokesperson for US Telecom, an association representing telecom businesses across the country, said the companies “have been unable to confirm the information reported by the Wall Street Journal” due to lack of access to data and methodology leading to those conclusions.

“We have not seen, nor have regulators identified, evidence that legacy lead-sheathed telecom cables are a leading cause of lead exposure or the cause of a public health issue,” read the statement dated July 9.

Verizon and AT&T are scheduled to release their financial results next week, with Lumen and Frontier the week after.