Rosenworcel: 30 Providers Completed 'Rip and Replace', More Funding Still Needed

WASHINGTON, Dec. 4, 2024 – Federal Communications Commission Chairwoman Jessica Rosenworcel urged Congress one more time last week to fund the "rip and replace" program, the informal name for Secure and Trusted Communications Networks Act of 2019.

Rosenworcel said 30 providers have finished swapping out Chinese gear, but the program’s $3 billion shortfall is continuing to squeeze participants.

“Some participants in the Reimbursement Program have informed the Commission that they fear that they may need to shut down portions of their networks and withdraw from this process without completing the removal of insecure equipment,” Rosenworcel wrote in letters to lawmakers.

“Because so many of the Reimbursement Program participants serve rural and remote areas of the country, any shut down of network facilities could remove the only provider available.”

Rosenworcel is stepping down in January, but Brendan Carr, the incoming Republican chairman, has also advocated for funding the program.

Rip and Replace was mandated by a 2020 law to reimburse smaller providers for swapping out network gear from Chinese companies Huawei and ZTE, deemed security threats by lawmakers. The program was allocated $1.9 billion, but the agency says it would need an additional $3.08 billion to fully pay all reimbursement requests. In the meantime companies have been receiving prorated reimbursements, about 40 percent of their costs.

The 30 completed efforts is up from 14 in July of this year. In total, 126 providers were approved to participate in the program and 122 submitted reimbursement requests before the July 2023 deadline. 

Failure to replace the covered equipment would bar companies from participating in the FCC’s Universal Service Fund, which many rural networks rely on. Receiving Rip and Replace funds comes with a one-year deadline for completing the work, but the agency can and has been granting extensions as companies deal with the underfunding and other constraints.

As of Nov. 20 the FCC had granted 139 such extensions, Rosenworcel wrote, with 118 due to the funding shortfall. She said 72 percent of participant status updates cited the prorated reimbursements as a barrier to completing the work, with half the companies saying they can’t finish the job at all without more funding.

Fully funding the program is a rare telecom issue with bipartisan support on Capitol Hill, but gridlock and disagreements over spectrum and the ACP have stalled efforts to do so. 

Most recently, a group of GOP lawmakers urged congressional leaders to get funding for Rip and Replace during the lame-duck session. Telecom attorneys have said they’re skeptical of a deal coming together before the new congressional term on Jan. 3.