Momentum for ‘rip and replace’ funding grows as bipartisan bill introduced in House

Support for near-term funding to rid U.S. networks of equipment from China-based vendors like Huawei and ZTE continued to increase this week, with bipartisan legislation introduced in the House and a coalition of telecom trade associations emphasizing the need for more than $3 billion to fulfill the mandate from Capitol Hill.

Sponsored by Rep. Ashley Hinson (R-Iowa), the “Defend Our Networks Act”—H.R. 6189—would transfer $3.08 billion in unobligated money from COVID-19 response and relief efforts to address the funding gap in the FCC’s program to rid U.S. communications networks of telecom gear deemed to be a national-security threat.

“Chinese technology is embedded in communications networks across the United States, giving the Chinese Communist Party [CCP] backdoor access to Americans’ personal information and sensitive data,” Hinson said in a prepared statement. “If communication flows through Huawei or ZTE equipment, it should be treated as if it is being downloaded back to a server in Beijing with a full access pass for the CCP regime.

“The Defend Our Networks Act will ensure compromised Chinese telecom equipment is replaced with secure systems so that Americans, especially those in rural areas, have secure, reliable, and private connectivity.”
Congress allocated $1.9 billion for the “rip and replace” program with the passage of the Secure and Trusted Communications Network Act of 2019, but that funding proved to be insufficient. In fact, the FCC plans to distribute less than 40% of the money requested by carriers to meet this mandate.

If H.R. 6189 becomes law, the FCC should have enough money to fully fund the “rip and replace” program at the $4.98 billion level sought by the carriers to replace Huawei and ZTE equipment with gear from vendors like Ericsson and Nokia.

Joining Hinson as Republican co-sponsors of H.R. 6189 are Rep. Mike Gallagher (R-Wis.)—chairman of the Select Committee on the Strategic Competition between the United States and the Chinese Communist Party—and Rep. John Moolenar (R-Mich.).

Democrat co-sponsors of H.R. 6189 are Rep. Raja Krishnamoorthi (D-Ill.)—ranking member of the Select Committee on the Strategic Competition between the United States and the Chinese Communist Party—Rep. Brittney Pettersen (D-Colo.) and Rep. Chrissy Houlahan (D-Penn.).

“I’m proud to join my colleagues in introducing the bipartisan Defend Our Networks Act to safeguard our communications infrastructure from potential vulnerabilities to the Chinese Communist Party (CCP),” Krishnamoorthi (D-IL) said in a prepared statement.

“Communications equipment produced by companies under the influence of the CCP pose a serious risk to our national security, and fully funding efforts to replace the vulnerable components with secure ones is a vital step forward in safeguarding our technological infrastructure.”

Gallagher echoed this sentiment, noting that he believes redirecting funding from COVID-19 initiatives for the “rip and replace” program is appropriate at this time.

“The COVID-19 pandemic is over, but the threats posed by Chinese telecommunications companies like Huawei and ZTE are not,” Gallagher said in a prepared statement. “There are thousands of pieces of risky Chinese telecommunications equipment in U.S. networks, and it’s imperative we act with a sense of urgency to remove them.

“The bipartisan Defend Our Networks Act is a common-sense way to protect Americans from national-security risks in our telecom networks and ensure small telecom providers have the resources they need to replace this dangerous equipment.”

Nationwide carriers like Verizon, AT&T and T-Mobile do not use Huawei or ZTE equipment in their U.S. networks (T-Mobile parent company Deutsche Telekom reportedly uses Huawei in its European network) and would not be part of the “rip and replace” program.

However, many regional and rural telecommunications providers have systems that include gear from the Chinese vendors, which often offered equipment that was less expensive than the products available to them from manufacturers like Nokia and Ericsson.

Two weeks ago, the Biden Administration called on Congress to fully fund the FCC’s “rip and replace” program, but the request did not identify a source for the money.

Biden’s funding proposal for the “rip and replace” initiative has been applauded by the Competitive Carriers Association (CCA) and eight other telecom trade associations that released a joint letter to Senate leaders—including the heads of the Appropriations Committee—on the topic earlier this week.

“As representatives of an industry faced by these national-security challenges, we urge the Committee to include this funding in emergency supplemental spending legislation,” according to the letter. “The Reimbursement Program faces a $3.08 billion shortfall based on cost estimates from approved applications, and because demand for support exceeds current funding, the FCC has been required to prorate funds, making 39.5% of approved funding currently available for each program participant as they venture to complete 100% of their projects.

“Absent full funding of the Reimbursement Program, millions of Americans could lose access to even basic connectivity because impacted carriers cannot complete their projects with less than 40% of the needed funding.”

Last year, it appeared that “rip and replace” funding would be packaged with legislation that would renew the FCC’s authority to conduct spectrum auctions—practices that have generated $233 billion for the U.S. Treasury during the past 30 years—and provide at least $10 billion to fund the transition to next-generation 911 (NG911) technology.

Beltway sources last year applauded this package, because it received bipartisan appeal, even though it ultimately was not included in the omnibus funding bill.

It is not yet clear whether passage of H.R. 6189 as a standalone bill would decrease lawmakers’ appetite for NG911 funding.

One potential benefit of funding the “rip and replace” program separately is that the initiative would not need to be prioritized ahead of NG911 in a bill, as it was in last year’s proposed legislative language. FCC Chairwoman Jessica Rosenworcel repeatedly has advocated for the use of proceeds from future FCC auctions to be used to pay for the nationwide NG911 deployment, but last year’s package in Congress would have paid first for “rip and replace” before providing any funding for NG911.

Of course, the spectrum-auction funding source technically is not an option at the moment, because the FCC’s authority to conduct such auctions expired earlier this year. FCC and telecom-industry officials have asked Congress to reinstate the spectrum-auction authority as soon as possible, particularly with a U.S. delegation headed to the ITU World Radiocommunication Conference 2023 that is scheduled to begin on Nov. 20 in Dubai.