Rosenworcel and Carr Circulate Proposal to Ban Covered Entity Labs from FCC Certification Program

WASHINGTON, May 6, 2024 – The Federal Communications Commission is set to vote May 23 on a proposal to ban labs owned by companies deemed to be national security risks from its equipment authorization program. 

Companies on the agency’s “covered list” are already barred from receiving FCC authorizations necessary to sell new wireless products, as well as from being vendors for federally funded projects. The proposal circulated Thursday would prohibit labs and facilities from conducting tests for the agency as part of that authorization program if they’re at least 10 percent owned by a covered list entity. 

“Communications networks are a part of everything we do, and it’s why their security matters more than ever before,” FCC Chairwoman Jessica Rosenworcel said in a statement. “So we must ensure that our equipment authorization program and those entrusted with administering it can rise to the challenge posed by persistent and ever-changing security and supply chain threats.”

The proposal would also suspend the agency’s recognition of any test lab in which a covered company has a 10 percent ownership stake and take comment on institution reporting requirements for currently participating test labs. If approved, the commission would open up a comment period for stakeholders to provide input before instituting new rules.

The FCC’s covered list was stood up in response to the Secure Equipment Act and currently includes telecommunications equipment from certain Chinese companies, including major manufactures Huawei and ZTE. In a move representative of what the proposal would require, the agency said that it denied a Huawei lab’s ability to participate in its certification program just last month.

Republican Commissioner Brendan Carr signed onto Rosenworcel’s announcement in the same agency release. The commission has passed several important items on party lines since its Democrats secured a 3-2 majority in September, with the two Republicans dissenting from its recent digital discrimination rules and net neutrality reinstatement, but curtailing the presence of Chinese companies in American networks has bipartisan support at the commission.

“This proposal represents another significant step in the FCC’s work to advance the security of America’s communications networks,” Carr said, adding he’s looking forward to “working with our FCC colleagues to adopt it next month.”

In addition to Thursday’s proposal, the agency is also set to vote on an adjudication and four enforcement bureau actions at its May 23 open meeting. 

Rosenworcel also reminded Congress on Thursday that the FCC’s rip and replace program, which reimburses providers for swapping covered list equipment out of networks, is facing a $3 billion shortfall.

She wrote that nearly 40 percent of participants say they can’t complete the work without more funding – companies are currently receiving about 40 percent of what they applied for in light of the shortfall. More than half said a lack of sufficient funding was an obstacle, and the agency has been granting an increasing number of deadline extensions.

In early January, the FCC reported to Congress that it had granted 11 such extensions. In Thursday’s letter, Rosenworcel said that has grown to a total of 64, with 52 of those based on the insufficient funds. Receiving funds under the program gives providers a deadline to complete the replacement work, and those now range from May 29, 2024 to February 4, 2025 after the extensions.

“Several recipients have recently informed the Commission that they foresee significant consequences that could result from the lack of full funding, including having to shut down their networks or withdraw from the program,” she wrote. “Because Reimbursement Program recipients serve many rural and remote areas of the country where they may be the only mobile broadband service provider, a shutdown of all or part of their networks could eliminate the only provider in some regions.”