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Wiley reports that bill requiring the “rip and replace” of Huawei and ZTE equipment heads to the Pre

Wiley reports that bill requiring the “rip and replace” of Huawei and ZTE equipment heads to the President’s desk

On February 27, 2020, the Senate passed the Secure and Trusted Communications Networks Act of 2019 (H.R. 4998) (the Act or bill), which is now headed to President Trump for his signature. The bipartisan bill aims to counter national security threats in the communications supply chain by prohibiting the Federal Communications Commission (FCC or Commission) from subsidizing the acquisition or maintenance of telecommunications equipment or services from untrusted suppliers. It establishes a $1 billion reimbursement program for carriers with less than 2 million subscribers to “rip and replace” covered equipment. The Act also directs the FCC to maintain a list of suppliers that pose “unacceptable risk” to the national security of the United States and sets up a program for the federal government to share supply chain security risk information with trusted telecommunications providers and suppliers.

The Act, which was sponsored in the House by Energy and Commerce Committee Chairman Frank Pallone (D-NJ), Ranking Member Greg Walden (R-OR), Rep. Doris Matsui (D-CA), and Rep. Brett Guthrie (R-KY), and in the Senate by Senators Roger Wicker (R-MS), Tom Cotton (R-AR), Mark Warner (D-VA), Ed Markey (D-MA), and Dan Sullivan (R-AK), had passed the House of Representatives in mid-December 2019 on an unanimous voice vote. After a brief hold-up, the Senate passed the House version of the bill on February 27, 2020, in lieu of its own version that had passed the Senate Commerce Committee but never received a vote on the Senate floor, thus clearing the path for the President’s signature. Although the precise timing for signing the bill into law is not yet clear, it could align with the White House’s planned 5G Summit for late March.

The Act builds upon the FCC’s 2019 Supply Chain Order, which already prohibits the use of Universal Service Fund (USF) subsidies by carriers to purchase or obtain equipment or services produced or provided by a covered company, and designates Huawei Technologies Company (Huawei) and ZTE Corporation (ZTE) as covered companies for purposes of the prohibition. Under the Act, the Commission’s 2019 Supply Chain Order stands, but only to the extent that such actions are consistent with the bill. The Commission is otherwise directed to adopt a new Report and Order implementing the statutory prohibition within six months from the bill’s enactment.