FCC Continues Supply Chain Protection Efforts; ETCs to Report on Huawei and ZTE Use by April 22, 2020
The Federal Communications Commission (“FCC”) is acting swiftly on efforts to protect the communications supply chain from entities posing a national security threat. In a Public Notice (“Public Notice”) released yesterday, the FCC announced that U.S. telecommunications carriers receiving Universal Service Fund (“USF”) support, known as eligible telecommunications carriers (“ETC”), must report on their use of equipment and services from Huawei Technologies Company (“Huawei”) and ZTE Corporation (“ZTE”). The information collection is mandatory for all entities that were ETCs as of December 31, 2019, and includes the ETC’s subsidiaries and affiliates. The information filings, which must be submitted via the FCC’s online filing portal, are due by April 22, 2020. As we explained previously, the FCC’s 2019 Report and Order, Further Notice of Proposed Rulemaking, and Order (“2019 Order”) adopted rules prohibiting carriers from using USF support to purchase equipment or services from entities designated as national security threats. Huawei and ZTE were initially identified as national security threats with a potential formal designation to follow after review by the FCC’s Public Safety and Homeland Security Bureau. The 2019 Order also sought comment on proposals requiring ETCs to remove and replace Huawei and ZTE equipment and services and on a potential reimbursement fund to aid with such removal and replacement costs. The Public Notice notes that the Huawei and ZTE initial national security threat designations may become final this spring. Accordingly, the ETC information collection is intended to provide information regarding the extent of ETC use of Huawei and ZTE equipment and the potential replacement costs should the FCC decide to require removal and replacement of such equipment and services. Among other information, ETCs must report, for themselves and any subsidiaries or affiliates, the costs of purchasing and installing Huawei or ZTE equipment in various network categories such as Access Layer Equipment, Core Layer Equipment, and Services. The information collection is mandatory only for ETCs, their affiliates and subsidiaries, and ETCs must affirmatively state if they are not using Huawei or ZTE services or equipment. Filing is voluntary, but encouraged, for other entities, such as those with pending ETC designation applications, those considering seeking ETC designation, and USF recipients that are not designated as ETCs.