NTCA Calls For Rip-and-Replace Funding

July 15, 2024 – NTCA – The Rural Broadband Association said in a statement on Thursday that the Federal Communication Commission’s “Rip and Replace” Program requires support to help smaller operators remove and replace insecure equipment in their networks.

On July 1, the FCC released a report that highlighted the status of the Secure and Trusted Communications Networks Program. In response, the NTCA said that the FCC’s findings reflect what it has heard from its members, “that support is critical.”

The program mandates telecommunications providers to remove Chinese-manufactured equipment, specifically from Huawei Technologies and ZTE, due to espionage and security concerns raised by the U.S. government. However, despite the $1.9 billion allocation from Congress to fund these replacements, the FCC estimated that the program was looking at a $3 billion shortfall. 

Given the deadlines for removing all Huawei and ZTE communications equipment, ranging from October 8, 2023 to September 23, 2024, associations have urged Congress to promptly allocate full funding. 

The Bureau’s findings reflect a critical need for support, as noted by NTCA CEO Shirley Bloomfield. “If the funding shortfall is not addressed as soon as possible, this unfortunately will leave U.S. networks at risk with respect to national security threats and disruptions, and rural consumers will suffer if rural providers are forced to discontinue services where they cannot afford to replace equipment.”

Challenges and Progress

The FCC’s Wireline Competition Bureau issued four reports to Congress on four key areas.

The first report, submitted in January 2023, noted that many Reimbursement Program participants had begun removing, replacing, and disposing of covered communications equipment and services. However, they faced challenges, particularly a lack of funding, which could hinder their ability to complete the work "within the time allowed by the Secure and Trusted Communications Networks Act of 2019 and the Commission’s rules."

On the same day, the Bureau submitted another report that found recipients faced challenges such as lack of funding, supply chain delays, labor shortages, and weather-related issues, which hindered their ability to complete their work.

On January 5, the Bureau's third report outlined ongoing difficulties, highlighting that only five out of 126 recipients had completed the removal, replacement, and disposal of covered communications equipment and services.

The Bureau submitted its fourth report on July 1, detailing that nine additional recipients had filed final certifications for the completion of the removal, replacement, and disposal of covered communications equipment and services, bringing the total to 14 out of 126 applications. The Bureau expects the number of completed applications to increase in the next reporting period.

However, many recipients have requested deadline extensions. The report notes that the $1.9 billion is insufficient, with 40 percent of recipients informing the FCC that “they cannot complete the work required under the Reimbursement Program without full government funding.”

In November 2023, a coalition of telecom associations urged Congress in a letter to include additional funding in spending legislation for the program.