Wireline Competition Bureau Finalizes Application Filings, Procedures, Cost Catalog, and Replacement List for the Secure and Trusted Communications Networks Reimbursement Program, 48521-48537 [2021-18446]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 86, Number 166 (Tuesday, August 31, 2021)]
[Rules and Regulations]
[Pages 48521-48537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-18446]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket Nos. 18-89; DA 21-947; FRS 44708]


Wireline Competition Bureau Finalizes Application Filings, 
Procedures, Cost Catalog, and Replacement List for the Secure and 
Trusted Communications Networks Reimbursement Program

AGENCY: Federal Communications Commission (FCC).

ACTION: Final action.

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SUMMARY: In this document, the Wireline Competition Bureau (the Bureau) 
adopts final procedures for, and provides eligible providers of 
advanced communications services with additional guidance regarding, 
the application filing and reimbursement process for the $1.9 billion 
Secure and Trusted Communications Networks Reimbursement Program 
(Reimbursement Program). The Bureau also adopted final versions of the 
FCC Form 5640 Application Request for Funding Allocation and 
Reimbursement Claim Request, the Catalog of Eligible Expenses and 
Estimated Costs (Catalog), and the List of Categories of Suggested 
Replacement Equipment and Services (Replacement List) for the 
Reimbursement Program.

DATES: The procedures outlined in this document are effective on 
September 30, 2021, except for the FCC Form 5640 application form, 
which is subject to approval from the Office of Management and Budget. 
The Bureau will publish a document in the Federal Register announcing 
the effective date for the FCC Form 5640. The Bureau will also 
subsequently release a public notice announcing when it will begin 
accepting applications and the application deadline for participating 
in the Reimbursement Program.

FOR FURTHER INFORMATION CONTACT: Christopher Koves, Wireline 
Competition Bureau, 202-418-7400 or by emailing [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Bureau's document 
(Public Notification or PN) in WC Docket No. 18-89; DA 21-947, released 
on August 3, 2021. The full text of this document is available for 
public inspection on the Commission's website at https://docs.fcc.gov/public/attachments/DA-21-947A1.pdf.

I. Introduction

    1. By this document, the Bureau adopts final procedures for, and 
provides eligible providers of advanced communications services with 
additional guidance regarding, the application filing and reimbursement 
process for the $1.9 billion Reimbursement Program. After considering 
comments received in response to the Reimbursement Process Public 
Notification (PN), 86 FR 31464, June 14, 2021, the Bureau finalizes the 
information fields on the new FCC Form 5640, which participants must 
submit to request funding allocations and disbursements from the 
Reimbursement Program, as well as the procedures governing the 
submission of and any modifications made to that form. Acting 
Chairwoman Rosenworcel has announced a ``target date'' of October 29, 
2021, to open the Reimbursement Program filing window to begin 
accepting applications. Prior to the target date, the Bureau will 
announce in a forthcoming public notice when it will open the 
Reimbursement Program online portal and begin accepting applications, 
and the filing window closing date. Finally, after considering comments 
received in response to the Catalog PN, 86 FR 18932, April 12, 2021, 
the Bureau also finalizes with this document the Catalog and the 
Replacement List which will be made available on the Commission's 
website.

II. Discussion

A. FCC Form 5640--Application Request for Funding Allocation and 
Reimbursement Claim Requests

    2. The Bureau adopts the application and reimbursement procedures 
and finalizes forms for the Reimbursement Program proposed in the 
Reimbursement Process PN.
    3. In the Reimbursement Process PN, the Bureau provided a 
representative sample of the questions to be included in the FCC Form 
5640 Application Request for Funding Allocation and sought comment on 
those information fields. The Bureau received persuasive comments 
regarding various fields applicants would complete in the new proposed 
form and, in response, it has implemented some modifications, and will 
proceed with finalizing that form.

[[Page 48522]]

    4. The Bureau proposed in the Reimbursement Process PN ``requiring 
applicants to identify in their application for each location site: (1) 
Where covered communications equipment or services are located (e.g., 
address, longitude and latitude, etc.) and documentation supporting the 
acquisition/existence of such covered equipment or services; and (2) 
the itemized cost estimates, taken from the Catalog where applicable, 
that are associated with the removal, replacement, and disposal of 
covered equipment and services at each site.'' Several commenters 
argued that requiring specific information about equipment at the 
application stage is burdensome on small carriers and some carriers may 
not have access to the information. The Rural Wireless Broadband 
Coalition recommended that instead of requiring such information at the 
application stage, the Application Request for Funding Allocation 
should, after the equipment is removed, populate a field for the make, 
model, and number of units for the removed equipment.
    5. The Bureau declines to modify the proposed site-specific 
information collected. The identification and tracking of site-specific 
information on covered and replacement communications and services, as 
well as on cost estimates, helps to ensure funds are spent for the 
purpose intended and protects against waste, fraud, and abuse. This 
information assists in determining program eligibility for the removal, 
replacement, and disposal of Huawei Technologies Company (Huawei) and 
ZTE Corporation (ZTE) equipment or services obtained on or before June 
30, 2020, and facilitates the assessment of applicants' cost estimates 
for allocation purposes. The Bureau acknowledges that requiring site-
specific information is more burdensome than a self-certification 
requirement. Including the more detailed site-specific information, 
however, will ensure that the Reimbursement Program Fund Administrator 
will be able to properly allocate the $1.895 billion and will limit the 
risk that incorrect estimates unnecessarily deplete the Reimbursement 
Program to the detriment of other applicants. Additionally, any 
increased costs associated with preparing applications that include 
site-specific information are potentially eligible for Reimbursement 
Program support, decreasing the financial burden on applicants when 
preparing applications. The Bureau, therefore, concludes that the 
benefits of the site-specific filing requirement outweigh any burden on 
the carriers. The Bureau recognizes, however, that the information 
provided is made in ``good faith and that all information provided . . 
. is true and correct to the best of Applicant's knowledge,'' based on 
the prior exercise of reasonable due diligence, at the time the 
application is filed. The Bureau will provide a process for 
participants to file modifications to their applications if more 
accurate information subsequently becomes available.
    6. Additional Requested Form Changes. Several commenters sought 
changes or clarifications to the proposed information fields included 
in the Application Request for Funding Allocation. Nokia proposed 
changes to the questions concerning the use of Open Radio Access 
Network (Open RAN) technology interface standards by applicants. 
Specifically, Nokia requested that the fields indicating that 
applicants selected Open RAN solutions be removed because the fields 
show a preference for Open RAN. The Bureau disagrees. These questions 
are merely intended to help the Commission track technology choices by 
providers and do not suggest or otherwise encourage an applicant to 
select a particular technology solution. Accordingly, the Bureau fails 
to see how these questions show a preference for certain types of 
network architecture and decline to remove these questions.
    7. Mavenir Systems, Inc. (Mavenir) separately requested several 
changes to the proposed information fields. Specifically, Mavenir 
requested that the Bureau strikes the use of ``O RAN'' to avoid 
confusion between Open RAN generally and the O RAN Alliance, that it 
specifies an applicant is using fronthaul Radio Access Network and Core 
Network, and that the Bureau specifies that an applicant is compliant 
with O-RAN Alliance 7.2 fronthaul standards rather than the more 
generally stated ``O-RAN Alliance standards.'' Additionally, Mavenir 
suggested two additions to the information fields inquiring whether 
applicants are using equipment or service compliant with the 3GPP X2 
standard and other 3GPP open interfaces, and if so, whether there is an 
associated fee to make the equipment interoperable or open. To reduce 
confusion, the Bureau removes the general O-RAN question that was in 
item 51 on the proposed Application Request for Funding Allocation. 
Additionally, the Bureau modifies items 53 and 54 to ask applicants if 
the ``equipment or service is compliant with O-RAN Alliance standards, 
such as O-RAN Alliance 7.2 fronthaul standards.'' While the O-RAN 
Alliance 7.2 fronthaul standard is currently a leading standard, work 
continues on this developing standard, and updates continue to be 
published. For example, on June 29, 2021, after Mavenir and others 
filed their comments, the O-RAN Alliance published a Third White Paper, 
``O-RAN Minimum Viable Plan and Acceleration towards 
Commercialization.'' In the Third White Paper, the O-RAN Alliance wrote 
that ``[f]uture O-RAN releases will extend the [Minimum Viable Plan] 
with new features and functionalities as these inputs and priorities 
evolve.'' The Bureau wants to ensure the information collected on the 
Application Request for Funding Allocation addresses whether the 
equipment is compatible with any future standards that are adopted as 
the O-RAN Alliance continues its work. Finally, the Bureau includes the 
two questions regarding 3GPP X2 standard and open interfaces because 
these questions are helpful in analyzing technology trends.
    8. ADTRAN, Inc. (ADTRAN) suggested incorporating a ``country of 
origin'' line item into the Application Request for Funding Allocation, 
which would support a ``buy American'' policy. Specifically, ADTRAN 
requests for the Application Request for Funding Allocation to include 
a question about the replacement equipment manufacturer's country of 
origin. ADTRAN argued that such information collection would be 
consistent with the Open RAN-related line items. The Bureau finds that 
including a ``country of origin'' question on the Application Request 
for Funding Allocation will further help the Commission track and 
analyze technology trends without increasing the overall burden on 
applicants. Accordingly, the Bureau will modify the Application Request 
for Funding Allocation to include a question about the replacement 
equipment manufacturer's country of origin.
    9. The Rural Wireless Association (RWA) requested clarifications 
and additions to the FCC Form 5640 Application Request for Funding 
Allocation. In particular, RWA argued that form changes were necessary 
because the Commission had yet to address whether there would be 
further prioritization within the three levels prioritized by Congress 
in the Secure and Trusted Communications Networks Act of 2019 (Secure 
Networks Act). In the 2021 Supply Chain Order, 86 FR 46995, August 23, 
2021, (July 13, 2021), the Commission rejected RWA's request to provide 
additional sub-prioritization categories outside of the scheme advanced 
by Congress. Thus, the Bureau

[[Page 48523]]

finds the changes requested by RWA would be inconsistent with the 
Commission's rules.
    10. Administrative and Form Consistency Changes. The Bureau will 
further require, as proposed, that applicants obtain and identify in 
their applications an FCC Registration Number (FRN) issued by the 
Commission Registration System (CORES), a Data Universal Numbering 
System (DUNS) number or where applicable, a DUNS+4 number, and that 
applicants register with the System for Award Management (SAM) and 
provide the SAM Commercial and Government Entity (CAGE) Code in their 
applications. No commenter objected to these proposals. An FRN is an 
identifying number that is assigned to entities doing business with the 
Commission. Registration in the SAM provides the Commission with an 
authoritative source for information necessary to provide funding to 
applicants and to ensure accurate reporting pursuant to the Federal 
Funding Accountability and Transparency Act. The DUNS number or, where 
applicable, the DUNS+4 number, provides necessary banking information 
to assist the Commission in the electronic payment of funds to program 
recipients.
    11. Separately, to reflect changes adopted in the 2021 Supply Chain 
Order, the Bureau modifies the question on the FCC Form 5640 concerning 
whether the applicant has obtained covered communications equipment or 
services. The Consolidated Appropriations Act, 2021 (CAA) amended the 
Secure Networks Act to modify the covered communications equipment and 
services eligible for the Reimbursement Program. The Commission in the 
2021 Supply Chain Order, implemented these changes by changing its 
rules to limit equipment and services eligible for the reimbursement to 
communications equipment or services produced or provided by Huawei and 
ZTE that are purchased, leased, or otherwise obtained on or before June 
30, 2020. Accordingly, the Bureau has made the necessary changes to the 
FCC Form 5640 to ask the applicant whether it has ``previously 
purchased, leased or otherwise obtained communications equipment or 
services on the Covered List that were produced or provided by Huawei 
or ZTE, including their affiliates and subsidiaries, on or before June 
30, 2020.''
    12. The Bureau has also added a question for applicants to indicate 
whether the cost estimate provided by the applicant includes a 
technology upgrade over a comparable replacement. This information will 
help the Bureau and the Reimbursement Program Fund Administrator 
identify requests involving technology upgrades. As the Commission 
stated in the 2021 Supply Chain Order, ``[p]articipants may obtain 
Reimbursement Program support for an amount equivalent to the cost 
estimate of a comparable replacement'' but noted that if ``a 
participant ultimately decides to upgrade to a higher quality, more 
advanced, non-comparable replacement, then the program participant will 
bear the difference in cost between the comparable replacement and the 
technology upgrade solution chosen.'' The added question will help 
identify participants seeking a technology upgrade solution so that the 
Reimbursement Program Fund Administrator and the Bureau can review the 
applications accordingly. Participants are reminded that, when seeking 
a technology upgrade, they will need to include a vendor quote for the 
comparable replacement in addition to a vendor quote for the upgrade 
they wish to purchase. Finally, the Bureau has also made minor changes 
to the language of certain questions to improve clarity and assist 
applicants.
    13. The Bureau strongly encourages interested participants to 
collect the information needed to prepare the application in advance of 
the opening of the filing window. Taking proactive steps will 
facilitate the submission process for applicants and help them identify 
and overcome potential challenges in advance of a filing deadline. 
Incomplete applications may be dismissed by the Bureau, which could 
prevent a provider from participating in the Reimbursement Program.
    14. As proposed, the Bureau will use an online filing portal to 
receive and process Application Requests for Funding Allocation and to 
coordinate the interactions between program participants, the 
Reimbursement Program Fund Administrator, and the Bureau. No commenters 
addressed this approach. Applicants and recipients will electronically 
submit all filings related to the Reimbursement Program, including the 
Application Request for Funding Allocation, using an online filing 
portal. The Bureau will allow applicants to submit applications at 
either the holding company level or individual/subsidiary level as 
proposed. The Bureau strongly recommends, however, that applicants file 
a single application at the holding company level to optimize 
administrative efficiency by reducing the number of filings requiring 
processing.
    15. Commenters supported the Commission's proposal to consider the 
use of Excel batch uploads of information to facilitate the completion 
of applications. To facilitate application preparation and ease the 
filing burden on applicants, the Bureau will develop the capability to 
allow batch uploads for targeted and specific portions of the 
applications. Additionally, some commenters requested that the 
Commission ensure there will be sufficient support for issues 
associated with filings in the portal. The Bureau agrees and will make 
support available to applicants for issues with the portal. 
Specifically, a Reimbursement Program Fund Administrator helpline and 
an email address will be designated for Reimbursement Program 
applicants to address questions related to their application and 
reimbursement request submissions. The Bureau will also provide 
additional details on the online filing process through webinars and 
other outreach activities.
    16. Timing and Length. The Bureau adopts its proposals related to 
the Application Request for Funding Allocation filing window. Per Sec.  
1.50004(b) of the Commission's rules, the Bureau will announce the 
opening of an initial filing window in a subsequent public notice when 
the online filing portal is ready to begin accepting applications. In 
that public notice, the Bureau will also announce the duration of the 
initial filing window. Consistent with the 2021 Supply Chain Order, the 
Bureau has discretion to set the length of the initial filing window, 
which is not limited to 30 days and may be longer if the Bureau finds 
that applicants need help navigating the application filing portal to 
compile the necessary documentation required for the filing 
requirements. RWA, in its comments, indicated a 60-day filing window 
would ensure that applicants could timely file their Application 
Requests for Funding Allocation. The Bureau agrees with RWA that 
applicants would benefit from having a longer filing window and will 
consider this comment when it determines the duration of the filing 
window. The Bureau is working toward a target date of late October for 
the opening of the filing window. The Bureau anticipates that the 
filing window period will run at least 60 days, and potentially longer. 
Until the filing window closes, the Bureau will allow applicants to 
initiate, save, submit, and make changes to submitted applications as 
proposed.
    17. In the 2021 Supply Chain Order, the Commission amended its 
rules to align eligibility for the Reimbursement Program with the CAA's 
amendments to

[[Page 48524]]

the Secure Networks Act. Consistent with the CAA, as implemented by the 
2021 Supply Chain Order, participation in the Reimbursement Program is 
limited to providers of advanced communications service with 10 million 
or fewer customers. As the Commission determined in the 2020 Supply 
Chain Order, 86 FR 2904, January 13, 2021, (December 11, 2020), 
``customers'' is interpreted to include customers of the applicant and 
customers of any affiliate taking advanced communications service from 
the provider and its affiliates as of the date the application is 
filed. Eligibility to participate in the Reimbursement Program is 
limited to ``providers of advanced communications service,'' which is 
defined as providers of ``high-speed, switched, broadband 
telecommunications capability that enables users to originate and 
receive high-quality voice, data, graphics, and video 
telecommunications using any technology with connection speeds of at 
least 200 kbps in either direction.'' A school, library or health care 
provider, or consortium thereof, providing facilities-based non-
commercial educational broadband service connections of at least 200 
kbps in one direction would qualify as a provider of advanced 
communication service for the purposes of the Reimbursement Program and 
is eligible for reimbursement funding. The Commission in the 2021 
Supply Chain Order, also modified the scope of covered communications 
equipment and services eligible for Reimbursement Program support 
consistent with the amendments to the Secure Networks Act by the CAA. 
The modification limits eligibility for reimbursement to communications 
equipment or services produced or provided by Huawei or ZTE obtained on 
or before June 30, 2020.
    18. The Bureau will review, with the assistance of the 
Reimbursement Program Fund Administrator, Application Requests for 
Funding Allocation to verify Reimbursement Program eligibility as 
required by the Commission's rules. The Application Request for Funding 
Allocation contains questions to assist with Reimbursement Program 
eligibility verification. For example, each applicant must answer 
``yes'' or ``no'' as to whether it is a provider of advanced 
communications service with 10 million or fewer customers. Applicants 
must also indicate ``yes'' or ``no'' to whether they have obtained 
covered communications equipment or service eligible for Reimbursement 
Program support on or before June 30, 2020. In addition, applicants are 
required to identify the eligible covered communications equipment or 
service that they intend to remove, replace, and dispose of with 
Reimbursement Program support by site location.
    19. The standard the Commission adopted to determine whether a 
provider is classified as a provider of advanced communications service 
is the same standard used to determine whether a provider must file FCC 
Form 477 to report broadband deployment data, i.e., the provision of a 
facilities-based broadband connection to an end user with a speed of at 
least 200 kbps in either direction. Accordingly, as part of the 
Bureau's internal verification process, it will cross-check applicants 
against the list of FCC Form 477 filers as of the most recent filing 
deadline. Applicants not identified on the most recent FCC Form 477 
filer list may need to provide additional information to support 
Reimbursement Program eligibility in response to a Reimbursement 
Program Fund Administrator request for information.
    20. The Bureau finds the validation of eligibility using FCC Form 
477 filing information, coupled with requesting additional information 
evidencing eligibility where an entity has not recently filed an FCC 
Form 477, appropriate in our efforts to ensure the Reimbursement 
Program supports providers of advanced communications services with 10 
million or fewer customers and protect against waste, fraud, and abuse.
    21. As required by the Secure Networks Act and the Commission's 
rules, the Application Request for Funding Allocation requires 
applicants to submit initial estimates of costs reasonably incurred for 
the permanent removal, replacement, and disposal of covered 
communications equipment or services. Both the Secure Networks Act and 
the Commission's rules require applicants to provide cost estimates in 
their applications. The Secure Networks Act specifically states that 
the ``Commission shall require an applicant to provide an initial 
reimbursement cost estimate at the time of application, with supporting 
materials substantiating the costs,'' which the Commission ``may 
require an applicant to . . . update,'' and ``submit additional 
supporting materials.''
    22. To help applicants submit cost estimates with their 
applications, the Commission permitted applicants to rely on estimated 
costs identified in the Catalog, which contains categories of 
quantifiable costs typically incurred in the removal, replacement, and 
disposal process. For costs not covered by the Catalog, or if 
applicants want to use a cost estimate that differs from the Catalog, 
the applicant can instead provide an individualized cost estimate 
supported by documentation (e.g., vendor quotes). The finalization of 
the Catalog is discussed in Part III.B of the PN, but here the Bureau 
addresses the proposals and comments related to the submission of cost 
estimates generally.
    23. Technology Upgrades. In the 2021 Supply Chain Order, the 
Commission clarified that ``the `costs reasonably incurred' standard . 
. . make[s] providers responsible for the additional incremental cost 
of funding upgrades that exceed what is reasonably necessary to 
transition to a comparable replacement.'' The Commission acknowledged 
that whether an upgrade is a ``reasonable, comparable replacement 
necessary for the transition'' to a replacement ``will likely depend on 
the facts in each case.'' The Commission directed the Bureau, with the 
assistance of the Reimbursement Program Fund Administrator, to ``first 
consider whether the cost is typically incurred when transitioning from 
covered communications equipment and services to a replacement.'' Other 
factors the Bureau may consider include the ``costs in relation to the 
alternative equipment and services and the capabilities and functions 
performed by the replacement equipment and service as compared to the 
equipment and services removed.''
    24. As provided in the 2021 Supply Chain Order, participants may 
obtain Reimbursement Program support for an amount equivalent to the 
cost estimate of a comparable replacement. Participants electing to 
upgrade their equipment or service in excess of the costs of a 
comparable replacement, however, bear the difference in cost between 
the comparable replacement and the technology upgrade. Participants 
seeking funding for a technology upgrade in excess of the costs of a 
comparable replacement will be required to provide price quotes for the 
comparable replacement with their Application Request for Funding 
Allocation--they may not rely on the cost estimates contained in the 
Catalog--and they must also separately certify that the cost estimate 
is made in good faith.
    25. While the Commission encourages providers to upgrade their 
networks, Congress directed the Commission to ``preclude network 
upgrades that go beyond the replacement of covered communications 
equipment or services from eligibility.'' Providers are responsible for 
the additional incremental costs of funding upgrades

[[Page 48525]]

that exceed what is reasonably necessary to transition to a comparable 
replacement. In the 2021 Supply Chain Order, the Commission found, as a 
general matter, expenses incurred replacing microwave backhaul with 
fiber backhaul or replacing last-mile fixed wireless links with fiber-
to-the-premises (FTTP) are not reasonably necessary to transition to a 
comparable replacement. Thus, consistent with the 2021 Supply Chain 
Order, while the Bureau will view fiber replacements as a technology 
upgrade, not a reasonable, comparable replacement, Reimbursement 
Program participants may be reimbursed for a portion of their expenses 
up to the difference in cost between a comparable replacement and the 
fiber upgrade. However, additional sources of Federal funding outside 
the scope of Reimbursement Program may be available to applicants for 
fiber deployments which could account for costs that exceed the costs 
of a comparable replacement. The Bureau encourages providers to explore 
all available funding options to upgrade their networks with fiber. 
Additionally, the Commission found that handset upgrades and certain 
other customer-premises equipment (CPE) are ineligible for 
reimbursement because replacing such handsets is not reasonably 
necessary to the removal, replacement, and disposal of covered 
communications equipment or service.
    26. Average Catalog Cost Estimate. Separately, the Bureau adopts 
its proposals in the Reimbursement Process PN related to the submission 
of cost estimates for the purposes of granting funding allocations. The 
Bureau adopts its proposal to base its evaluation of applicant's cost 
estimates on the average between the minimum and maximum range of 
estimated costs for a particular itemized expense listed in the 
Catalog, rather than allowing applicants to choose any amount within 
the cost estimate range. The preliminary catalog included a low-end and 
high-end range of cost estimates for each particular itemized expense 
identified to help develop a record on reasonable expenses associated 
with the relevant expenses. In addition to a range of cost estimates, 
the final Catalog now includes the average between the low-end and 
high-end range of cost estimates for each itemized expense identified. 
Applicants relying on Catalog cost estimates for their applications 
will select the predetermined average cost estimate for a particular 
itemized expense identified in the Catalog as opposed to providing a 
cost estimate that is within the range of cost estimates. This approach 
will reduce the likelihood of applicants overestimating costs, and will 
thus minimize overallocation of limited funding to the detriment of 
other Reimbursement Program participants. Some commenters object to the 
use of average cost estimates, arguing that equipment types within the 
ranges are too varied, and that applicants will regularly exceed the 
averages. The Bureau rejects this argument. If an applicant finds that 
a Catalog cost estimate average does not fully account for its costs, 
or if a cost category is not identified in the Catalog, applicants are 
permitted to provide individualized cost estimates based on supporting 
documentation (e.g., vendor quotes) and certify the cost estimate is 
made in good faith. This approach balances the Commission's goals of 
protecting against waste, fraud, and abuse while facilitating the 
production of estimates of costs reasonably incurred by applicants.
    27. As indicated in this document, the Bureau will also collect 
cost-estimate information on a site-specific basis because it enables 
the review of cost estimates for reasonableness and promotes clear 
identification and tracking to assist with the invoicing process, as 
well as protecting against waste fraud and abuse. Applicants may, 
however, report in their applications network-wide costs, such as 
disposal costs or software upgrades, that apply to several site 
locations.
    28. Nokia asks us to permit applicants to submit cost estimates 
that are based on reasonable costs incurred by the applicant over an 
18-month project timeline. The Bureau declines to accept a cost 
estimate covering such a lengthy period of time. The removal, 
replacement, and disposal term provided for in the Secure Networks Act 
and the Commission's rules ends one year after the participant receives 
its initial disbursement of support. Accordingly, participants should 
submit cost estimates accounting for a one-year term as currently 
provided under the Commission's rules that commences when the 
participant receives its initial draw down disbursement.
    29. The Commission's rules direct the Bureau to review applications 
to determine completeness, program eligibility, and the reasonableness 
of cost estimates. The Bureau must ``approve or deny'' applications no 
later than 90 days after the close of the relevant filing window. If 
additional time is needed to review the applications, the Bureau may 
extend the deadline up to an additional 45 days. Consistent with the 
Secure Networks Act, the Commission's rules state ``[i]f the . . . 
Bureau determines that an application is materially deficient 
(including by lacking an adequate cost estimate or adequate supporting 
materials), the . . . Bureau shall provide the applicant a 15-day 
period to cure the defect before denying the application.'' The Bureau 
sought comment on additional facets of the review process and received 
limited comment on the opportunity to cure and the filing of amendments 
during the 90-day review period as discussed herein.
    30. The 90-day review period will commence on the next business day 
following the close of the filing window, per the Commission's rules. 
As proposed, after the filing window closes and the 90-day review 
period commences, the Reimbursement Program Fund Administrator will 
conduct an initial review of the applications to help the Bureau 
determine whether the applications are initially considered eligible 
and acceptable for filing and to evaluate the gross estimate demand 
contained in those applications. The Bureau will then issue a public 
notice ``announcing those applications initially found eligible'' and 
acceptable for filing, and those applications considered materially 
deficient. The Reimbursement Program Fund Administrator will proceed 
with processing those applications considered acceptable. Applicants 
filing applications found unacceptable for filing will need to amend 
and provide additional information demonstrating program eligibility 
before the Reimbursement Program Fund Administrator can proceed with 
processing their applications as acceptable for filing.
    31. 15-Day Opportunity to Cure. As required by the Secure Networks 
Act and the Commission's rules, the Bureau will give applicants whose 
applications are found materially deficient a 15-day opportunity to 
cure the deficiency before their application is denied. As proposed, 
the Bureau will individually notify each applicant that its application 
is deficient and that it has 15 days to cure all of the identified 
deficiencies. Such notice will be distinct from the public notice 
announcing applications accepted for filing and applications with 
material defects. RWA questions whether the 15-day cure period starts 
on the date of the public notice release or the individual notification 
date. Accordingly, the Bureau clarifies the 15-day cure period will 
commence on the date of the individual email notification is sent by 
the Commission and received by the applicant.

[[Page 48526]]

    32. The Bureau also broadly interprets the statutory 15-day 
opportunity to cure as providing all applicants an opportunity to cure 
material defects that would lead to the denial or partial denial of an 
Application Request for Funding Allocation, even filers of applications 
that were initially found acceptable. In those instances, should the 
Bureau subsequently find, after further review, that the application is 
materially deficient and subject to denial, the applicant will be 
afforded the 15-day cure period.
    33. Requests for Additional Information. During the application 
review process there may be multiple instances where the Reimbursement 
Program Fund Administrator seeks additional information from an 
applicant prior to an application being granted or denied. These 
additional opportunities to amend an application or provide 
supplemental information prior to any official decision will ensure 
that all applicants have sufficient opportunities to present the most 
complete application seeking reimbursement, and the Bureau clarifies 
that these opportunities are separate and distinct from, and do not 
count against, the formal 15-day opportunity to cure period. The Bureau 
finds this clarification of the process mitigates RWA's concerns of 
having only a single 15-day cure period.
    34. Amendments during the Application Review Period. As proposed, 
the Bureau will allow applicants to make amendments to the filings 
during the 90-day review period. Additionally, the Bureau adopts its 
proposal to deny, as a general matter, amendment requests to an 
Application Request for Funding Allocation that would result in an 
increase to the total cost estimate. The Bureau therefore denies RWA's 
request to allow increases to applicant cost estimates. Reimbursement 
Program support is limited and subject to prioritization requirements 
should demand exceed supply. Allowing amendments to increase cost 
estimates would hinder the review of applications within the statutory 
90-day review period, as the Reimbursement Program Fund Administrator 
would need to restart its cost estimate review for reasonableness with 
each amendment filed. Moreover, amendments increasing total cost 
estimate demand could ultimately delay the issuance of allocations to 
all participants because the Bureau and Reimbursement Program Fund 
Administrator will not be able to determine if prioritization is 
necessary until all applications are processed and the last application 
is granted.
    35. The Bureau also rejects Nokia's request to allow applicants to 
build in an overrun allowance of 10% to account for unexpected costs. 
Nokia asks that applicants receive a funding allocation for 10% more 
than their reported cost estimates. Applicants are required by the 
Commission's rules to provide good-faith cost estimates for removal, 
replacement, and disposal. Applicants are thus encouraged to provide 
cost estimates that are as accurate as possible based on all available 
information. Allowing applicants to build in overrun allowances would 
undermine the goal of the Reimbursement Program of efficiently 
allocating funding support to help as many eligible providers as 
possible.
    36. 45-Day Extension Period. As proposed, and consistent with the 
Secure Networks Act, the Bureau directs the Reimbursement Program Fund 
Administrator to advise the Bureau, based on its initial review of the 
applications filed, whether to extend the 90-day deadline for granting 
or denying applications by up to an additional 45-day period. The 
Reimbursement Program Fund Administrator shall indicate whether it 
needs additional time to review the applications based on the number 
and complexity of the applications received. If the Bureau finds an 
extension justified, it will issue a public notice announcing the 
extension of the 90-day review period by a specified duration, not to 
exceed 45 days.
    37. Allocation. Based on the cost estimates provided by applicants, 
the Reimbursement Program Fund Administrator will recommend for the 
Bureau's consideration a funding allocation for each approved 
application. The Bureau will review each recommendation and, following 
any modifications to cure deficiencies following the 15-day cure 
period, will either grant or deny the application and proceed with 
issuing the allocation. Should total allocation demand exceed the 
funding available, the Reimbursement Program Fund Administrator's 
allocation recommendations will be adjusted in accordance with the 
prioritization scheme required by the amended Secure Networks Act and 
adopted by the Commission in the 2021 Supply Chain Order.
    38. No Allocation Adjustments. As directed by the Commission in the 
2020 Supply Chain Order, ``the funding amount allocated represents the 
maximum amount eligible for draw down by an eligible provider unless a 
subsequent funding allocation is made.'' Accordingly, the Bureau 
emphasizes that once it makes a funding allocation determination, it 
will not adjust the funding allocation amount even if there is a change 
in the participant's plans or if actual costs exceed estimated costs. 
To the extent a participant requires funding in excess of its allocated 
amount, the participant will be required to file a new application in a 
subsequent filing window, if and when such a filing window is 
announced. The Bureau will only issue funding disbursements for 
reasonable expenses actually incurred.
    39. Allocation Announcement Schedule. The Bureau adopts its 
proposal to periodically release public notices announcing funding 
recipients and the amount of their funding allocations as well as to 
notify recipients directly by email. No commenter filed comments on 
this proposal. This approach ensures administrative efficiency while 
also providing transparency to Reimbursement Program applicants and 
recipients, as well as the public.
    40. Pursuant to the Commission's rules, after eligible providers 
receive funding allocations and incur actual costs, they must file 
reimbursement claims along with supporting invoices and other cost 
documentation to draw from their allocation. Each Reimbursement Program 
recipient must file at least one reimbursement claim within one year of 
the approval of its Application Request for Funding Allocation. Failure 
to file within the year will result in the expiration of the funding 
allocation and the provider will be unable to receive any reimbursement 
funds from the allocation as the unused funds would revert back to the 
Reimbursement Program. The Commission would be able to then reallocate 
to other applications in a future filing window any funds from the 
expired allocation. In this section, the Bureau adopts proposals 
related to the filing of reimbursement claims and extensions of the 
reimbursement claim deadline permitted under the Commission's rules.
    41. Filing Reimbursement Claim Requests. The Bureau adopts several 
of its proposals related to processing recipients' requests for 
reimbursement and will finalize the FCC Form 5640 Reimbursement Claim 
Request as proposed. Additionally, the Bureau adopts its proposal to 
allow recipients to submit multiple Reimbursement Claim Requests as 
they incur expenses throughout the reimbursement period. The Bureau, 
with the assistance of the Reimbursement Program Fund Administrator, 
will review and grant or deny Reimbursement Claim Requests for actual 
costs reasonably incurred.

[[Page 48527]]

    42. The Bureau adopts the approach for processing Reimbursement 
Claim Requests proposed in the Reimbursement Process PN. Accordingly, 
using the features available in the online filing portal, recipients 
will be required to link actual costs incurred and the supporting 
invoice documentation to their itemized cost estimates previously filed 
with the Bureau to complete the claim. Recipients must submit invoices 
through the online portal as attachments to their Reimbursement Claim 
Requests. With each invoice submitted, recipients must provide specific 
details related to the invoice (vendor name, date issued, description 
of contents, etc.) to assist reviewers in linking invoices to specific 
itemized cost estimates. Further, recipients seeking disbursements must 
have previously provided a vendor and supplier quote associated with 
the invoice included with the Application Request for Funding 
Allocation before submitting the Reimbursement Claim Request. 
Recipients who have not yet provided a vendor and supplier quote 
associated with the invoice because they relied on the Catalog cost 
estimates when completing their Application Request for Funding 
Allocation will need to file a modification before submitting the 
Reimbursement Claim Request. The Reimbursement Program Fund 
Administrator will not review Reimbursement Claim Requests that rely on 
invoices not substantiated by a corresponding quote previously filed.
    43. Pursuant to the Commission's rules and the 2020 Supply Chain 
Order, recipients may seek reimbursement only for actual expenses 
incurred during the period beginning on April 17, 2018, and ending at 
the expiration of the one-year removal, replacement, and disposal term. 
Consistent with the 2020 Supply Chain Order, the Bureau will allow 
providers to obtain reimbursement for costs reasonably incurred prior 
to the creation and funding of the Reimbursement Program, but on or 
after April 17, 2018, for the removal, replacement, and disposal of 
covered equipment and services. The Bureau must authorize the payments 
from the Reimbursement Program fund in the United States Treasury to 
providers that have submitted valid claims for reimbursement.
    44. RWA requests the Bureau allow the filing of requests ``beyond 
the allocated funds so that the [Reimbursement Program] Fund 
Administrator can approve costs even though there may not yet be 
funding to pay such invoices.'' The Bureau agrees, and the filing 
portal system will allow recipients to file Reimbursement Claim 
Requests, even when the amount requested exceeds the amount allocated 
to the recipient, up until the deadline for filing Reimbursement Claim 
Requests has expired. These requests will, however, remain in pending 
status if there is insufficient funding to grant the requests in full.
    45. Nokia requests that the Commission expedite disbursements to 
contractors involved in creating cost estimates for Application 
Requests for Funding Allocation that are initially accepted for filing 
prior to allocating the funds to all applicants. Specifically, it 
argues that expedited disbursements for costs associated with 
application preparation ``will relieve financial stresses on the 
industry and encourage more complete and accurate applications.'' The 
Commission's rules, however, do not allow for disbursements prior to a 
funding allocation. Further, the Commission did not establish a 
separate disbursement process to reimburse for expenses incurred for 
applications initially found acceptable for filing. Providing a 
disbursement at this early stage would also trigger the recipient's 
obligation to complete the removal, replacement, and disposal process 
within one year and many applicants would be unable to meet that 
deadline. That said, costs associated with preparing applications are 
potentially eligible for reimbursement and applicants may file 
reimbursement claims for such costs once an allocation is issued.
    46. Reimbursement Claim Request Deadline. All Reimbursement Claim 
Requests must be filed no later than 120 days following the expiration 
of the removal, replacement, and disposal term. Prior to the expiration 
of the claim request deadline, recipients under the Commission's rules 
are permitted to request and, if timely requested, will automatically 
receive a 120-day extension. RWA notes that the one-year removal, 
replacement, and disposal term can be extended and argues that the 
corresponding 120-day reimbursement claim deadline should also be 
extended if the underlying one-year term is extended. The Bureau agrees 
and confirms that if the Commission or the Bureau extends the one-year 
removal, replacement, and disposal term, the corresponding 120-day 
reimbursement claim deadline will also be extended and start from the 
new extended term date expiration.
    47. Finally, as required by the Commission's rules, after the 
Reimbursement Claim Request filing deadline, the remaining unclaimed 
amounts in the allocation will expire. The remaining funds in the 
expired allocation will be available for Commission reallocation in a 
future filing window. However, as proposed in the Reimbursement Process 
PN, a timely submitted extension request, while pending, will toll the 
expiration of the funding allocation.
    48. Amendments, Modifications, and Administrative Updates. In the 
Reimbursement Process PN, the Bureau sought comment on proposals to 
allow program participants to update information on file with the 
Commission through the filing of amendments, modifications, and/or 
administrative updates. The Bureau did not receive comments regarding 
modifications or administrative updates. The Bureau did, however, 
receive comments objecting to the general denial of amendments to the 
Application Request for Funding Allocation that would increase cost 
estimate submissions, as discussed elsewhere herein. Accordingly, the 
Bureau will allow participants to amend, modify, and file 
administrative updates using the online filing portal.
    49. To file an amendment the participant must notify the 
Reimbursement Program Fund Administrator of its intent to amend its 
application through the Reimbursement Program Fund Administrator Help 
Desk. Notification of an intent to amend through the Reimbursement 
Program Fund Administrator Help Desk is necessary to unlock the 
underlying application in the online filing portal to allow for the 
filing of an amendment. This notice of intent to amend alerts the 
Reimbursement Program Fund Administrator to pause application 
processing pending the filing of additional changes that may impact the 
review process. Amendment filings are only permitted for underlying 
filings that are in a pending status.
    50. The Bureau also will allow modification filings after an 
application is granted. For a granted Application Request for Funding 
Allocation, the Bureau will allow recipients to submit modification 
filings to change itemized expenses and locations identified on their 
filings and to provide vendor and supplier quotes for review by the 
Reimbursement Program Fund Administrator. The Bureau reiterates that if 
the modification filing would change the cost of the project, it will 
not alter the funding allocation issued. Additionally, participants are 
allowed to file administrative updates for routine, non-material 
changes to filings such as changes to the applicant's contact 
information (e.g., address, phone number, and contact name). The online 
filing portal will accept and

[[Page 48528]]

automatically process administrative updates once filed.
    51. Notifications of Changes in Ownership. Recognizing that the 
Reimbursement Program will be administered over multiple years and 
changes in ownership may occur, the Bureau adopts its proposal to adapt 
the online filing system to account for changes in ownership, including 
changes due to bankruptcy. Specifically, the Bureau will institute a 
streamlined process whereby, post-consummation, the recipient of record 
will file a notification signed by both parties to the transaction that 
includes an explanation of the ownership changes. In the event of an 
involuntary change of control and/or ownership, such as, but not 
limited to, the appointment of a trustee in bankruptcy or a receiver, 
the process shall include a mechanism for a rightful recipient to file 
the notification without the signature of the other party to the 
transaction upon a showing of appropriate documentation regarding the 
change of control and/or ownership. The Bureau, with the assistance of 
the Reimbursement Program Fund Administrator, will determine the amount 
of the funding allocation remaining, i.e., the amount not yet claimed 
and disbursed through the reimbursement claim process, and how to 
handle transactions involving the acquisition of discrete network 
components, e.g., the sale of a portion of the network and not the 
entire network. Commenters support this approach. The Bureau notes, 
however, that while it is not requiring prior approval for new owners 
to participate in the Reimbursement Program, the new owners would still 
have to be eligible to participate in the program to receive funding 
under the Commission's rules. Providers with more than 10 million 
customers are not eligible to participate in the Reimbursement Program.
    52. Consistent with the Secure Networks Act, the Commission's rules 
require Reimbursement Program participants to complete the removal, 
replacement, and disposal process within one year from the initial 
disbursement of funds. The initial disbursement is deemed to occur on 
the date on which the Commission first distributes reimbursement funds 
to the recipient. Participants must file to receive their initial 
disbursement within one year of receiving the funding allocation 
approval.
    53. Both the Secure Networks Act and the Commission's rules 
authorize extensions of the one-year removal, replacement, and disposal 
term. Specifically, under Sec.  1.50004(h)(1) of the Reimbursement 
Program rules, the Commission may grant a general extension of the one-
year term by a period of six months to all Reimbursement Program 
recipients if the Commission: (1) Finds the supply of replacement 
communications equipment or services needed by the recipients to 
achieve the purposes of the Reimbursement Program is inadequate to meet 
the needs of the recipients; and (2) provides notice and detailed 
justification for granting the extension to the Committee on Energy and 
Commerce of the House of Representatives and the Committee on Commerce, 
Science, and Transportation of the Senate. In addition, the Bureau may 
grant individual extensions of time for a period not to exceed six 
months on a case-by-case basis. The Commission has interpreted the 
Secure Networks Act to allow grant of multiple individual extensions of 
time to a participant. To grant an extension, the Bureau must find 
that, due to no fault of the recipient, such recipient is unable to 
complete the permanent removal, replacement, and disposal by the end of 
the term.
    54. Nokia requested a blanket 6-month extension of time, noting 
that many applicants will have difficulty adhering to a one-year 
deadline for removal, replacement, and disposal because, under normal 
circumstances, the process would take approximately one to three years. 
Additionally, Nokia notes that a high number of carriers attempting to 
replace equipment during the same period of time may delay the process. 
The Competitive Carriers Association (CCA) also requested a blanket 6-
month extension, raising a similar concern in its comments, recognizing 
that carriers are ``managing labor shortages, including limited 
availability of skilled engineers and 12 tower crews, and an extension 
will give carriers a more realistic opportunity to navigate staffing 
challenges.'' Copper Valley Wireless, Inc. (Cooper Valley Wireless) 
asserts that the unique issues facing Alaskan providers will result in 
multiple extension requests. Thus, Copper Valley Wireless requests 
successive blanket extensions for Alaskan providers.
    55. The Bureau finds these requests for an extension of the term 
for all future participants are outside the scope of the Reimbursement 
Process PN, and it, therefore, declines to address these requests. In 
addition, the Bureau finds it premature to consider a general extension 
before the Reimbursement Program is even launched and any removal, 
replacement, and disposal terms are established. Granting an across-
the-board extension at this juncture is counter to Congress' intent of 
having a one-year term.
    56. In addition, some commenters have expressed concern that the 
Commission appears to favor O-RAN replacement options and requests that 
the Commission not grant an applicant's extension request solely 
because of the replacement choice. As the Bureau did not seek comment 
on proposals related to granting term extensions, it finds these 
comments are also outside the scope of the Reimbursement Process PN. 
These comments more accurately relate to the 2021 Supply Chain Order, 
where the Commission said that some replacement options, such as O-RAN 
or virtual RAN, may require additional time for system integration. 
While the Bureau recognizes it may take longer to implement certain 
technological solutions, that is only one factor among many that could 
justify an extension. Regardless, the Bureau disagrees that the 
Commission has demonstrated a preference for O-RAN technology solutions 
as compared to any other solution.
    57. To help mitigate against waste, fraud, and abuse, and 
consistent with the Secure Networks Act, the Commission required 
recipients to submit status updates, spending reports, and final 
certifications and updates. The Bureau takes this opportunity to 
reiterate these requirements as set forth in the Secure Networks Act 
and the Commission's rules.
    58. Status Updates. The Secure Networks Act requires that ``[n]ot 
less frequently than once every 90 days beginning on the date on which 
the Commission approves an application for a reimbursement under the 
Program, the recipient of the reimbursement shall submit to the 
Commission a status update on the work of the recipient to permanently 
remove, replace, and dispose of the covered communications equipment or 
services.'' The Secure Networks Act also provides that ``[n]ot earlier 
than 30 days after the date on which the Commission receives a status 
update,'' the Commission ``shall make such status update public on the 
website of the Commission.''
    59. In the 2020 Supply Chain Order, the Commission required 
recipients to file the first status updates within 90 days of receiving 
their funding allocations. In the status updates, recipients are 
required to report on the efforts undertaken and challenges encountered 
in permanently removing, replacing, and disposing of their covered 
communications equipment or services. Recipients shall also report in 
detail on the availability of replacement equipment in the marketplace 
so the

[[Page 48529]]

Commission can assess whether a general, six-month extension permitted 
by the statute is appropriate. Each status update must include a 
certification that affirms the information in the update is accurate. 
The obligation to file status updates expires after the recipient has 
notified the Commission of the completion of the permanent removal, 
replacement, and disposal of the covered communications equipment or 
service pursuant to a final certification. Status updates will be 
public, consistent with the Commission's rules, and the Commission 
directed the Bureau to post on the Commission's website the status 
update filings within 30 days of submission.
    60. Spending Reports. The Secure Networks Act requires 
Reimbursement Program recipients to submit ``reports regarding how 
reimbursement funds have been spent, including detailed accounting of 
the covered communications equipment or services permanently removed 
and disposed of, and the replacement equipment or services purchased, 
rented, leased or otherwise obtained, using reimbursement funds.'' In 
the 2020 Supply Chain Order, the Commission required Reimbursement 
Program recipients to file spending reports within 10 calendar days 
after the end of January and July, starting with the recipient's 
initial draw down of disbursement funds and terminating once the 
recipient has filed a final spending report showing the expenditure of 
all funds received as compared to the estimated costs submitted. The 
Commission directed ``program participants to submit the final spending 
report no later than 60 days following the expiration of the program 
participant's reimbursement claim deadline.'' The Bureau is required to 
make spending reports, except for detailed accounting information, 
available to the public via a portal on the Commission's website.
    61. Final Certifications. Within 10 days following the expiration 
of the removal, replacement, and disposal term, recipients must file a 
final certification with the Commission. The final certification must 
indicate whether the recipient has fully complied with all terms and 
conditions of the program, the commitments made in its application, and 
the timeline submitted. The final certification must also indicate 
whether the recipient has permanently removed covered communications 
equipment and services that were in its network as of the date of 
application submission. Pursuant to the Secure Networks Act and the 
2020 Supply Chain Order, if an applicant indicates that it has not 
fully complied with all terms of program participation, the applicant 
must file an updated final certification ``when the recipient has fully 
complied.'' Program participants failing to timely submit a final 
certification or updated final certification may be subject to 
forfeitures and other penalties.
    62. The Secure Networks Act directed the Commission to make public 
on the Commission's website status updates submitted by recipients 
under the Reimbursement Program. In the 2020 Supply Chain Order, the 
Commission directed the Bureau to make filed spending reports available 
to the public through an online portal. The Commission also directed us 
to treat as presumptively confidential detailed accounting information 
on the covered communications equipment or services subject to removal, 
replacement, and disposal, and the replacement equipment or services 
being reimbursed, and to withhold such disaggregated information from 
routine public inspection. The Commission also directed us to treat as 
presumptively confidential ``[o]ther information, such as location of 
the equipment and services; removal or replacement plans that include 
sensitive information; the specific type of equipment or service; and 
any other provider specific information,'' which the Commission found 
would likely qualify as trade secrets under the Freedom of Information 
Act (FOIA) the public release of which could raise security and 
confidentiality concerns. However, as a condition of receiving funding, 
the Commission required Reimbursement Program recipients to provide 
consent to allow vendors or contractors used by the recipient to 
release confidential information to an auditor, reviewer, or other 
representative as part of the auditing process, which is discussed in 
further detail in Part III.A.13 of the PN.
    63. The Bureau will treat certain specified information submitted 
by Reimbursement Program participants as public or presumptively 
confidential consistent with the Secure Networks Act, the Freedom of 
Information Act, and the Commission's rules. As proposed in the 
Reimbursement Process PN, and consistent with the Commission's rules, 
the Bureau will make publicly available, through an online search 
portal, general and summary information submitted by participants. This 
includes the name of the applicant who submitted a FCC Form 5640, 
Application Request for Funding Allocation, and the funding amount 
requested. This also includes the Reimbursement Program participants 
selected for funding allocation and the funding amount awarded. 
Consistent with the 2020 Supply Chain Order, the Bureau will also make 
public on the Commission's website recipients' filed spending reports. 
The Bureau finds that the public interest is best served by making this 
information available to the public to ensure transparency and 
accountability.
    64. Commenters agreed with the proposal to treat certain sensitive 
information collected as part of the Program as presumptively 
confidential and withhold that information from routine public 
inspection. For example, ADTRAN ``fully supports the proposal to 
maintain the confidentiality of proprietary information with regard to 
the prices of the replacement equipment and services.'' ADTRAN asserts 
that ``such information constitutes trade secrets,'' and ADTRAN ``takes 
steps to protect that information by requiring its customers (and 
potential customers) to enter into non-disclosure agreements to 
maintain confidentiality.'' ADTRAN agrees that ``information on the 
specific replacement equipment and location of that equipment . . . 
should not be made publicly-available, particularly because such 
information on what is critical infrastructure could provide roadmaps 
to malefactors.'' RWA agrees with the proposal to treat as 
presumptively confidential and withhold from public inspection 
information including ``detailed accounting information,'' ``location 
of the equipment and services; removal or replacement plans that 
include sensitive information; the specific type of equipment and 
service; and any other provider specific information that qualifies as 
trade secrets under the Freedom of Information Act.''
    65. Accordingly, as contemplated by the 2020 Supply Chain Order, 
and proposed in the Reimbursement Process PN, the Bureau finds that 
certain information likely constitutes confidential commercial or 
financial information or trade secrets under the FOIA, and consistent 
with the 2020 Supply Chain Order, and the Commission's rules, the 
Bureau will treat this information as presumptively confidential and 
will withhold from routine public inspection such information, 
including:
     Detailed accounting information on the covered 
communications equipment or services removed, replaced, and disposed 
of, and the replacement equipment or services purchased, rented, 
leased, or otherwise obtained using Reimbursement Program funds;

[[Page 48530]]

     Vendor price quotes submitted with the FCC Form 5640, 
Application Request for Funding Allocation, or in a Modification 
filing;
     Invoices submitted with the FCC Form 5640, Reimbursement 
Claim Requests;
     Equipment or services location, including address, 
latitude/longitude, etc.;
     Removal or replacement plans that include sensitive 
information;
     Specific equipment or service type;
     Other provider-specific information; and,
     Specific timeline for the permanent removal, replacement, 
and disposal of covered communications equipment and services.
    The Bureau finds, consistent with the 2020 Supply Chain Order, that 
this information would likely qualify as confidential commercial or 
financial information or trade secrets under the Freedom of Information 
Act and therefore should be withheld from routine public inspection.
    66. Finally, the Bureau adopts the approach proposed in the 
Reimbursement Process PN, to allow filers uploading attachments to the 
online portal to categorize whether the attachment is ``confidential'' 
or ``public.'' RWA argues that ``anything attached to the FCC Form 5640 
by an applicant that is clearly marked confidential should be treated 
as such and withheld from public inspection.'' The Bureau clarifies 
that participants may submit requests to treat documentation as 
confidential information to be withheld from public inspection; 
however, such requests must be consistent with FOIA and the 
Commission's rules. Requests for confidential treatment that are 
overbroad or otherwise inconsistent with our rules will be rejected. 
Attachments designated as ``confidential'' will be withheld from 
routine public inspection, subject to FOIA and the Commission's rules, 
whereas attachments designated as ``public'' may be made publicly 
available.
    67. The Secure Networks Act directed the Commission to ``take all 
necessary steps to avoid waste, fraud, and abuse with respect to the 
Program,'' including ``regular audits and reviews of reimbursements 
under the Program to confirm that recipients of such reimbursements are 
complying with this Act,'' and ``random field investigations to ensure 
that recipients of reimbursements under the Program are performing the 
work such recipients are required to perform.'' In the 2020 Supply 
Chain Order, the Commission adopted a number of measures as directed by 
the Secure Networks Act to combat waste, fraud, and abuse, including 
requiring audits, reviews, and field inspections. In particular, the 
Commission directed the Office of the Managing Director (OMD), or a 
third-party identified by OMD, to prepare a system to audit 
Reimbursement Program recipients to ensure compliance with the 
Commission's rules. Recipients are subject to audits and other 
investigations to evaluate their compliance with the statutory and 
regulatory requirements for the program. To facilitate audits and field 
investigations, recipients must provide consent to allow vendors or 
contractors used by the recipient to release confidential information 
to the auditor, reviewer, or other representative. Recipients must also 
allow any representative appointed by the Commission to enter the 
premises of the recipient to conduct compliance inspections.
    68. In the 2021 Supply Chain Order, the Commission delegated 
financial oversight of the Reimbursement Program to OMD, in 
coordination with the Bureau and the Reimbursement Program Fund 
Administrator, to ensure that all financial aspects of the program have 
adequate internal controls. OMD, in coordination the Bureau, may issue 
additional directions to the Reimbursement Program Fund Administrator 
and program participants in furtherance of its responsibilities. The 
Bureau will continue to work with OMD, any third-party identified by 
OMD, and the Reimbursement Program Fund Administrator to develop an 
audit, review, and field investigations process for the Reimbursement 
Program to protect against waste, fraud, and abuse. Pursuant to the 
2020 Supply Chain Order, participants must allow any representative 
appointed by the Commission to enter the participant's premises to 
conduct compliance inspections so, at a minimum, the audit process may 
include site visits to participant's premises to conduct these 
compliance inspections.

B. Catalog of Eligible Expenses and Estimated Costs

    69. In this section, the Bureau adopts a final Catalog which 
applicants may rely on, where applicable, when submitting cost 
estimates in their Application Request for Funding Allocation, and the 
Bureau provides additional guidance regarding whether certain costs are 
reasonably incurred and may be reimbursable under the Reimbursement 
Program.
    70. Section 4(d)(1) of the Secure Networks Act requires the 
Commission to ``develop a list of suggested replacements'' for covered 
equipment and services and for applicants to submit ``initial 
reimbursement cost estimate[s] at the time of application.'' To 
accomplish this objective, the Commission delegated authority to the 
Bureau to develop and finalize a Cost Catalog in the 2020 Supply Chain 
Order. The Commission's rules provide that eligible providers may rely 
upon the predetermined estimated costs identified in the Catalog when 
submitting their cost estimates with their requests for funding 
allocation. The Bureau contracted with Widelity Inc. (Widelity) to 
produce a preliminary catalog containing a non-exhaustive list of cost 
categories and a range of cost estimates for communications equipment 
and services potentially eligible for reimbursement. Widelity developed 
the preliminary catalog based on a series of confidential interviews 
with communications industry stakeholders to understand the process and 
costs associated with removing, replacing, and disposing of covered 
communications equipment and services. In the Catalog PN, the Bureau 
sought comment on the preliminary catalog, the suggested ranges of 
estimated costs and cost categories identified therein, and how the 
Catalog should inform the Reimbursement Program. Widelity subsequently 
conducted a thorough review of the preliminary catalog, based on 
comments received in response to the Catalog PN, and conducted 
additional engagement with communications industry stakeholders and the 
Bureau, resulting in additional improvements to the Catalog.
    71. After considering comments received in response to the Catalog 
PN, and in consultation with Widelity, the Bureau revises and finalizes 
the Catalog as set forth in this document. The final Catalog includes 
as an attachment a chart indexing changes from the preliminary catalog 
to the final Catalog. In particular, the Bureau added an index number 
to reference line item cost categories, clarified certain expenses that 
it finds are highly variable, clarified units of measurement, clarified 
cost categories and descriptions, amended certain ranges of cost 
estimates, and corrected typographical errors. For the reasons 
discussed in this document, the Bureau adopts the Catalog in Appendix C 
of the PN for use in the Reimbursement Program. The Catalog will be 
made available on the Commission's website, and the line

[[Page 48531]]

items and cost estimate averages taken from the ranges identified in 
the Catalog will be incorporated into the online filing portal for use 
by applicants when completing the FCC Form 5640, Application Request 
for Funding Allocation.
    72. The Catalog identifies cost categories and a range of estimated 
costs that providers of advanced communications services would 
typically incur when removing, replacing, and disposing of covered 
communications equipment or service. The Bureau emphasizes the Catalog 
is not intended to be a definitive or exhaustive list of all 
reimbursable expenses but rather is an additional tool to help 
applicants with their application submissions. Inclusion or exclusion 
in the Catalog of a particular category of costs should not be 
interpreted as a determination whether the expense will be eligible for 
reimbursement. Applicants may reference the line item cost estimates 
identified in the Catalog when submitting their initial cost estimates. 
Consistent with the Secure Networks Act, applicants relying on the 
Catalog when requesting a funding allocation will still be required to 
provide supporting materials substantiating their cost estimates with 
documentation such as quotes or invoices before receiving a 
disbursement of funds for reimbursement. To the extent that certain 
reimbursable expenses are not explicitly listed in the Catalog or 
certain cost categories do not fully account for an applicant's 
reimbursable expenses, applicants may request reimbursement by 
submitting individualized cost estimates, with supporting materials 
substantiating the costs. The cost estimates identified in the final 
Catalog do not guarantee the ultimate disbursement of funds for any 
individual expense. Participants' requests for reimbursement will be 
evaluated based on supporting documentation regardless of whether the 
initial cost estimates were based on the Catalog or individualized cost 
estimates.
    73. As noted in this document, cost estimates based on the Catalog 
will be the average of the low- and high-end range of cost estimates 
identified in the Catalog. If an applicant believes a cost estimate 
identified in the Catalog does not fully account for its specific 
circumstances or a cost category is not identified in the Catalog, the 
applicant may provide an individualized cost estimate. Applicants 
providing individualized cost estimates will be required to submit 
additional supporting documentation (e.g., vendor quotes) and certify 
that the cost estimate is made in good faith. All cost estimates are 
subject to review by Commission staff, with the assistance of the 
Reimbursement Program Fund Administrator, to ensure that an expense is 
eligible for reimbursement under the costs reasonably incurred 
standard.
    74. The Bureau received 13 comments in response to the Catalog PN, 
including comments addressing the preliminary catalog. Comments 
addressing the preliminary catalog were generally favorable; however, 
commenters also proposed changes to the preliminary catalog. Commenters 
requested clarifications to the units of measurement for particular 
cost estimates, requested modifications or clarifications to certain 
cost categories, and requested modifications to certain ranges of cost 
estimates. Commenters proposed changes to the access layer, 
distribution layer, and core layer equipment, as well as software and 
services. Commenters also requested clarification on whether certain 
costs are reimbursable under the Reimbursement Program. The Bureau 
addresses these comments in the following. The Bureau also highlights 
modifications to the Catalog proposed by Widelity based on its own 
thorough review of the preliminary catalog and additional engagement 
with communications industry stakeholders.
    75. Clarifying Units of Measurement. USTelecom--The Broadband 
Association (USTelecom) asked the Commission to clarify whether 
wavelength division multiplexing (WDM) and optical transport network 
(OTN) equipment ``prices are `per node' and . . . not `per route.' '' 
WDM and OTN equipment is typically priced in the communications 
industry on a per node basis as opposed to per route, and the Bureau 
clarifies that the range of cost estimates for WDM and OTN equipment in 
the Catalog is priced on a per node basis. USTelecom also asked the 
Commission to clarify ``whether the range of prices identified in the 
preliminary Catalog for the `existing co[ ]location' expense type'' are 
``per-month or a flat fee for each lease.'' Because colocation is 
typically priced on a per-site, flat-fee basis, as opposed to a per-
month basis, the Bureau revises the Catalog to clarify that the range 
of cost estimates for colocation is priced on a per-site basis to more 
accurately describe the per-unit cost of these expenses.
    76. Requests to Include Additional Cost Categories. CCA asked the 
Commission to ``include in the Cost Catalog an entry for preparation of 
the cell site closeout package, which may include photos, red line/as-
built drawings, documents, and other relevant information to confirm 
that the site has been completed to specified standards and 
requirements.'' The Bureau agrees. The Bureau finds that cell site 
closeout costs may be reasonably necessary to remove and replace 
covered communications equipment or services, and revised the Catalog 
to include under the ``Services,'' ``Site Work'' cost category, a 
subcategory for ``Closeout Package--Microwave'' and general ``Closeout 
Package.'' The range of cost estimates for these new cost categories 
was developed by Widelity based on confidential interviews with 
communications industry stakeholders.
    77. RWA requested the Bureau add an ``Attorney fees'' cost category 
to the Catalog for ``legal fees spent on the advocacy surrounding the 
development of the rules,'' or ``legal fees related to the ongoing 
rulemaking process.'' The Bureau notes that the preliminary catalog 
included a ``Participation in FCC Rulemaking'' cost category with a 
range of cost estimates. The Bureau denies RWA's request because 
attorney's fees related to the rulemaking proceeding are not reasonably 
necessary for the removal, replacement, and disposal of covered 
communications equipment or services. The Bureau modifies the Catalog 
to remove the ``Participation in FCC Rulemaking'' cost category and 
range of cost estimates identified in the preliminary Catalog. The 
Bureau clarifies, however, that certain attorney's fees and legal 
expenses incurred for purposes of participating in the Reimbursement 
Program, such as preparing application forms, reimbursement forms, 
extension requests, and waiver requests, may be reimbursable to the 
extent they are reasonably incurred for the removal, replacement, and 
disposal of covered communications equipment and services and the 
allocation request is substantiated with supporting documentation. The 
Bureau also notes that, for example, attorney fees associated with 
negotiating and reviewing vendor contracts and legal fees associated 
with zoning and permitting are included in the Catalog range of cost 
estimates and potentially eligible for reimbursement.
    78. Clarifying Reimbursable Expenses. CCA asked the Commission to 
provide ``additional clarification on allowable reimbursements for 
internal employee time, including what type of documentation will be 
required.'' As CCA noted, the preliminary catalog included a range of 
cost estimates

[[Page 48532]]

related to internal labor costs, including carrier internal project 
management. The Bureau recognizes that the Reimbursement Program will 
demand significant employee time and resources. Internal labor costs, 
like other program costs, are reimbursable to the extent they are 
reasonably incurred removing, replacing, and disposing of covered 
communications equipment and services. However, for internal labor 
costs to be reimbursable, they must be entirely related to transition 
efforts, that is, the costs would not have been incurred but for 
Reimbursement Program participation removing, replacing, and disposing 
of covered communications equipment and services. In other words, 
participants are only eligible to recover that portion of employee time 
attributable to transitioning equipment and services, not unrelated 
employee time or expenses related to overhead. Labor costs associated 
with normal system or network maintenance and administration, conducted 
in the ordinary course of business, are not reimbursable. The Bureau 
will review internal labor costs with heightened scrutiny to ensure 
that such expenses are reasonably necessary for removal, replacement, 
and disposal of covered communications equipment or services, and to 
avoid waste, fraud, and abuse in the Program. Generally, the Bureau 
expects cost estimates for internal labor to be lower than cost 
estimates for outside services for the same work.
    79. The Bureau finds that the Catalog adequately identifies and 
accounts for employee time, i.e., internal labor costs, that could be 
quantified for a range of cost estimates based on pricing data 
submitted by industry stakeholders to Widelity. For example, the 
Catalog includes a range of cost estimates for internal labor including 
project management and engineer/staff network operations which are on a 
per person per month basis. The Bureau makes no changes to the Catalog 
with respect to internal labor costs. Internal labor costs identified 
in the Catalog are reimbursable to the extent they are reasonably 
incurred removing, replacing, and disposing of covered communications 
equipment and services. Applicants may rely on the Catalog to estimate 
internal labor costs for their application submissions where applicable 
but will be required to submit additional documentation accounting for 
actual costs during the reimbursement stage to ensure that 
reimbursement funds are entirely related to transition efforts.
    80. Applicants seeking reimbursement for internal labor costs that 
are not identified in the Catalog will be required to submit 
individualized cost estimates and documentation and certify that the 
estimates are made in good faith. In particular, to ensure that 
internal labor costs are entirely related to transition efforts, such 
costs must be estimated on a per-hour and per-project basis, providing 
both an estimate of labor hours to be incurred for each project and the 
internal labor rate to be used. Evidence of the salary/hourly rate of 
internal labor must be provided to establish the reimbursable portion 
of labor costs. Labor rates may be inclusive of salary and benefits. 
When submitting cost estimates for internal labor costs, the applicant 
should provide the employee hourly rates, a description of the work 
performed, and the number of hours to be worked (e.g., copies of 
employee timesheets or paystubs with hours worked, and Internal Revenue 
Service Form W-2, Wage and Tax Statement).
    81. The Bureau will exercise its discretion in determining whether 
the hours and/or labor rates satisfy the costs reasonably incurred 
standard. When submitting actual costs for reimbursement for internal 
labor, participants should provide: A report listing the hours incurred 
for each transition task, the applicable labor rate, and the resulting 
cost; and copies of employee timesheets showing hours worked on each 
transition task, by day. Timesheet hours must match the totals reported 
by the task in this document. Timesheets either may come from the 
participants' time and expense reporting systems or can be manually 
prepared using spreadsheets or other means. The Bureau may request 
additional supporting information for internal labor costs, such as 
payroll, human resources, or financial records.
    82. RWA argues that costs associated with ``long term maintenance 
contracts or managed service contracts to maintain and operate Huawei 
and ZTE networks may need to be terminated prior to the service terms 
being completed and that the costs associated with the termination . . 
. should be reimbursed as part of the costs associated with replacing 
the networks.'' Observing that ``other prepaid service contracts may 
need to be terminated prior to the service terms being completed,'' RWA 
argues that ``[t]hese costs should be eligible for reimbursement and 
included in the Cost Catalog because they are outlays already made that 
are not otherwise recoverable.'' The Bureau rejects RWA's request 
because these expenses are incurred to maintain Huawei and ZTE networks 
that the Reimbursement Program is designed to replace. These expenses 
are not reasonably necessary to remove, replace, and dispose of covered 
communications equipment and services.
    83. The Bureau does, however, clarify that early termination fees 
incurred by providers terminating long term service contracts, managed 
service contracts, or other prepaid contracts entered into prior to 
their application submission may be reimbursable to the extent they are 
reasonably necessary for removing, replacing, and disposing of covered 
communications equipment and services. The Bureau will not reimburse 
early termination fees for contracts entered into after June 30, 2020, 
as Congress has established that date as the eligibility cut-off for 
eligible expenses. Beyond our statutory obligation, after June 30, 
2020, the date on which the Public Safety and Homeland Security Bureau 
released orders designating Huawei and ZTE as covered companies under 
our rule Sec.  54.9, no Universal Service Funds could be used to 
purchase, obtain, maintain, improve, modify, or support Huawei or ZTE 
equipment or services. The Bureau declines to reward business decisions 
where a participant should be on notice to not enter into arrangements 
with such fees given the program's goals to incentivize providers to 
remove, replace, and dispose of Huawei and ZTE equipment and services. 
Participants seeking reimbursement for early termination fees must 
provide supporting documentation, including copies of vendor contracts 
with the early termination fee provisions.
    84. CCA requested that certain integration costs be included in the 
Catalog. CCA requested that any Citizens Broadband Radio Service (CBRS) 
equipment being replaced should include ``the costs of re-integration 
of the new CBRS equipment with Spectrum Access Systems.'' Because 
Spectrum Access Systems (SAS) integration costs may be reasonably 
necessary to replace CBRS equipment, these costs may be reimbursable 
under the program. The Bureau revises the Catalog to include cost 
categories for access layer and distribution layer SAS Integration 
Costs and a range of cost estimates based on Widelity's confidential 
interviews with communications industry stakeholders.
    85. CCA also requested inclusion in the Catalog of a cost category 
for ``third-party integration costs'' such as ``billing software, 
messaging platforms, roaming services, WEAS systems, and robocall 
blocking services.'' While these expenses are not in the Catalog, some 
of these expenses may be reimbursable.

[[Page 48533]]

However, the Bureau rejects CCA's request because network integration 
costs are highly variable, making it difficult to develop a 
quantifiable range of cost estimates based on the record and 
information provided by communications industry stakeholders to 
Widelity. As noted in this document, the final Catalog does, however, 
include specific integration costs, such as SAS integration, that are 
specific to the type of equipment which may be eligible for 
reimbursement. Participants seeking reimbursement for network 
integration costs not identified in the Catalog will need to provide 
individualized cost estimates with supporting documentation.
    86. RWA asked the Commission to modify the Catalog to include 
``VoLTE compatible replacement subscriber handsets'' to replace ``CDMA-
capable voice services on some handheld devices.'' Relatedly, CCA asked 
the Commission to modify the Catalog to clarify that replacements to 
``add, upgrade, or replace HSS, IMS, PCRF, etc. to support UMTS/LTE/
VoLTE devices'' fall within the catalog's ``purview.'' In the 2021 
Supply Chain Order, however, the Commission rejected RWA's request, 
finding ``CDMA-capable handsets not produced or provided by Huawei or 
ZTE ineligible for reimbursement under the Reimbursement Program rules 
because replacing such handsets with VoLTE-compatible subscriber 
handsets is not reasonably necessary to the removal, replacement, and 
disposal of covered communications equipment or service.'' Consistent 
with the 2021 Supply Chain Order, the Bureau declines to modify the 
Catalog to include handsets and other end user customer premises 
equipment (CPE) outside of the limited CPE already accounted for in the 
Catalog.
    87. RWBC asked the Commission to modify the Catalog to ``include 
cost estimates for deploying fiber backhaul equipment,'' arguing that 
``fiber backhaul facilities should be considered comparable to 
microwave backhaul facilities under the `Emerging Technologies' 
compatibility standard.'' Similarly, USTelecom asked the Commission to 
clarify whether leasing ``additional capacity on a long-term basis 
(like a fiber IRU) that would support the parallel network'' is 
eligible for reimbursement. In the 2021 Supply Chain Order, however, 
the Commission did not consider ``replacing microwave backhaul with 
fiber backhaul . . . necessary for the removal, replacement, and 
disposal of'' covered communications equipment or services.'' Instead, 
the Commission viewed such ``fiber link replacements as a technology 
upgrade, and not a reasonable, comparable replacement.'' As the 
Commission explained in the 2021 Supply Chain Order, if the participant 
decides to upgrade its equipment, it will bear the difference in cost 
between the comparable replacement and the upgrade, must provide price 
quotes for the comparable replacement with its application, as opposed 
to relying on the cost estimates in the Catalog, and must certify that 
the estimated cost is in good faith. Fiber backhaul facilities and 
additional capacity would be considered an upgrade, not a reasonable, 
comparable replacement. Accordingly, the Bureau declines to add this 
equipment as a separate cost category to the Catalog.
    88. Ericsson argues that the preliminary catalog ``only included 
Internet of Things (`IoT') software licenses associated with core 
network nodes,'' which does ``not reflect the need to replace existing 
Machine-to-Machine (`M2M') and IoT software licenses in the Radio 
Access Networks (`RAN') nodes.'' Ericsson asked the Commission to 
``expand the current Catalog to include specific RAN software licenses 
for existing functionality, such as M2M, Cat-M1, Narrowband IoT, and 
similar items'' because it would ``ensure the continuation of IoT 
capabilities in one frequency band in all sectors of an existing LTE 
site with typical 2, 4, and 8-port radios.'' The Bureau declines to 
implement Ericsson's request because the functionality cited, Internet 
of Things capabilities, is not reasonably necessary for core network 
operations and therefore is outside of the scope of the Catalog. The 
cost categories Ericsson requests to include in the Catalog are not 
part of the core network but rather are used by end users to connect to 
advanced communications services. In the 2021 Supply Chain Order, the 
Commission found that ``Internet of Things devices, used by end users 
to access and utilize advanced communications services are distinctly 
different from the cell sites, backhaul, core network, etc. used to 
operate a network and provide advanced communications services,'' and 
were ``not reasonably necessary to the removal, replacement, and 
disposal of covered communications equipment or service.''
    89. Vantage Point argues that ``annual software or license fees'' 
are ``a true cost of network replacement and should be included in 
Catalog replacement estimates.'' While these expenses may be 
reimbursable, the Bureau declines to implement Vantage Point's proposed 
change because specific software licensing fees are already included in 
the Catalog based on Widelity's engagement with industry stakeholders. 
Participants seeking reimbursement for software and licensing fees not 
identified in the Catalog will need to provide individualized cost 
estimates with supporting documentation.
    90. Requests to Clarify or Modify Cost Categories. CCA asks us to 
``clarify that the full range of 911 implementation costs are 
reasonable,'' including ``third-party integration costs.'' The Catalog 
includes cost estimates for ``911 and E911 Services and Test Services'' 
which the Bureau finds are sufficiently specific. To the extent that 
there are additional costs associated with 911 and E911 (Enhanced 911) 
implementation as CCA suggests, there is no evidence in the record or 
provided to Widelity that would form a basis for altering the Catalog 
911 and E911 services cost categories. Accordingly, the Bureau declines 
to implement the change proposed by CCA.
    91. USTelecom asked the Commission to clarify that the ``Leasing'' 
cost category is not limited to ``wireless networks,'' but that 
``wireline networks may also need to obtain or modify leases, such as, 
for example, for space in third-party datacenters.'' In particular, 
USTelecom asserts that the ```existing colocation' expense type'' is 
``unclear.'' The Bureau clarifies that providers of wireline networks 
may be eligible for reimbursement of leasing expenses, including 
colocation expenses, reasonably incurred in removing, replacing, or 
disposing of covered communications equipment and services. The Bureau 
declines, however, to modify the Catalog to account for costs of 
leasing space in third-party data centers. The Bureau notes that there 
is no documentation in the record to quantify costs for leasing space 
in third-party data centers, and Widelity did not receive cost data on 
leasing space in third-party data centers.
    92. Amendments to the Range of Cost Estimates. Commenters requested 
that the Bureau modifies the range of cost estimates for certain cost 
categories identified in the preliminary Catalog. Mavenir argues that 
the low range of cost estimates identified in the preliminary Catalog 
for `` `Open vRAN eNodeB', `RAN (Open RAN/vRAN) Components' or 
[Distributed Unit] . . . need to be changed to reflect that costs 
provided by Mavenir.'' The Bureau agrees with Mavenir that it should 
modify the Catalog to reduce the low end of the range of estimated 
costs for ``Open vRAN eNodeB,'' and ``RAN (Open RAN/vRAN Components)'' 
to

[[Page 48534]]

reflect the lower pricing information Mavenir submitted to Widelity. 
Accordingly, the Bureau implements these clarifications in the Catalog. 
However, the Bureau rejects Mavenir's request to lower the low end of 
the range of cost estimates for the distribution layer Distributed Unit 
cost category because Widelity had already factored in the pricing 
information Mavenir submitted to Widelity when developing the range of 
cost estimates for the preliminary catalog. Because the Bureau finds 
the range of cost estimates for Distributed Unit identified in the 
preliminary catalog to be reasonable, the Bureau includes it in the 
final Catalog.
    93. USTelecom asked the Commission to ``reexamine and confirm the 
appropriate prices'' for WDM and OTN equipment. USTelecom asserted that 
it was ``unclear why'' cost estimates for access layer ``Access WDM & 
OTN'' equipment ``matches'' core layer ``Metro WDM & OTN'' equipment, 
``yet the apparently similar'' distribution layer ``Metro WDM & OTN'' 
cost estimates are ``very different.'' To remove a potential source of 
confusion for participants, the Bureau removed the core layer ``Metro 
WDM & OTN'' cost category since this equipment is identical to 
distribution layer WDM and OTN equipment and thus the cost estimates 
were duplicative. As a result, the Bureau adjusted the range of cost 
estimates for ``WDM & OTN--Core Equipment'' to reflect the removal of 
distribution layer WDM and OTN equipment and the associated range of 
cost estimates. Accordingly, the Bureau adopts this revision in the 
Catalog. WDM and OTN associated equipment costs are included for the 
access layer, distribution layer, and core layer equipment cost 
categories.
    94. USTelecom states that a member has ``Huawei equipment that 
would appear to be classified as Coaxial Media Converters in the 
proposed catalog'' and reports that it ``paid well in excess of the 
maximum allowed,'' and ``the cost to replace Huawei with equal 
functionality will range from $13,000-$16,000 per replacement.'' 
USTelecom notes that the carrier ``typically refers to'' the ``Coaxial 
Media Converters'' equipment as a ``cable modem termination system 
(CMTS) and, while CMTS systems are generally deployed in a cable 
operator's headend, these particular Huawei CMTS devices are field-
deployed.'' Because the Bureau finds that the costs for replacing CMTS 
are reasonably necessary to comply with the Reimbursement Program, the 
Bureau finds that the Catalog should be revised to account for CMTS 
costs. The Bureau agrees with USTelecom that the high-end cost estimate 
should be $16,000 per node but, based on cost estimates recommended by 
Widelity based on industry engagement, the Bureau finds that the low-
end cost estimate should be $8,500 per node. The Bureau modifies the 
Catalog to include this range of cost estimates for CMTS (per node).
    95. CCA asks us to ``add the costs of cell site routers to the 
Catalog, with an estimated cost of $3,000 per site'' because ``[e]ach 
cell site typically has a router installed.'' The preliminary catalog 
identified a Distribution Layer cost subcategory and range of cost 
estimates for ``Cell Site Routers.'' The Bureau revised the Catalog to 
include additional Distribution Layer cost subcategories and ranges of 
cost estimates for small, medium, and large cell site routers based on 
Widelity's additional engagement with industry stakeholders. The Bureau 
finds that Widelity's thorough survey of communications industry 
manufacturers and service providers reasonably identified relevant 
ranges of estimated costs for cell site routers. To the extent that 
applicants disagree with the Catalog cost estimates, they may submit 
individualized cost estimates along with supporting documentation.
    96. The Bureau also takes this opportunity to clarify that costs 
associated with removing, replacing, and disposing of wired (Wi-Fi) and 
wireless routers that constitute CPE are not be reimbursable under the 
program and revise the Catalog accordingly. The preliminary catalog 
included a subcategory (without cost estimates) for ``Smart Home'' CPE 
but clarified that ``IP cameras, wifi doorbells, wifi, light switches, 
etc. would not be reimbursable.'' In the preliminary Report, Widelity 
noted that for wireless networks, CPE can include an ``internal modem 
and broadband router possibly with a wireless access point to 
distribute a signal throughout the premises or office,'' and for wired 
networks, CPE can include a ``broadband router, or a premise gateway 
with wireless (Wi-Fi) capabilities.'' In the 2021 Supply Chain Order, 
the Commission found that certain CPE equipment including end-user 
handsets were ``distinctly different from cell sites, backhaul, core 
network, etc. used to operate a network and provide advanced 
communications services.'' In particular, the Commission found this 
equipment was not reasonably necessary to the removal, replacement and 
disposal of covered communications equipment. Wired (Wi-Fi) and 
wireless routers may constitute CPE used by end users to access non-
core network elements and, consistent with the 2021 Supply Chain Order, 
are not reasonably necessary for the removal, replacement, and disposal 
of covered communications equipment or services. Accordingly, the 
Bureau revises the Catalog ``Smart Home'' subcategory to clarify that 
``Wi-Fi Routers'' would not be reimbursable under the program.
    97. Airspan argues that the ``Cost Catalog's pricing appears 
grossly inflated,'' noting that ``some of the lower bound cost 
estimates listed in the Cost Catalog are as much as three times (3x) 
the price Airspan currently offers for equivalent hardware and other 
network elements,'' and that network equipment and services are 
becoming less expensive by the day due to the ongoing evolution of 
network architecture design and equipment manufacturing.'' Airspan did 
not sufficiently quantify with specificity the changes to the range of 
cost estimates it envisioned. The Bureau thus declines to modify the 
Catalog in response to Airspan's comment because it believes that 
Widelity's thorough survey of communications industry manufacturers and 
service providers reasonably identified relevant ranges of estimated 
costs. The Bureau notes that it modified the Catalog in parts to reduce 
the low-end of the range of cost estimates where appropriate.
    98. Vantage Point argues that the preliminary Catalog 
underestimates shipping costs in Alaska, failing to account for 
``shipping costs to any other major Alaskan port,'' other than Seattle 
to Dutch Harbor, and failing to account for ``inland transportation 
costs.'' The Bureau declines to modify the Catalog to account for 
additional shipping costs in Alaska raised by Vantage Point. The 
Catalog accounts for shipping costs to Alaska based on the longest 
shipping route, Seattle to Dutch Harbor, as an example for the costs 
typically incurred. Cost estimates for other outlying regions, which 
vary depending on multiple cost factors, including distance, time of 
year, freight weight, etc., would be too variable to include in the 
Catalog. To the extent that providers believe the Catalog does not 
adequately represent their shipping costs, they may submit 
individualized cost estimates with supporting documentation.
    99. Widelity Proposed Revisions. Widelity also proposed various 
modifications, clarifications, and improvements to the preliminary 
catalog, based on additional engagement with communications industry 
stakeholders and its own thorough review. Widelity proposed various 
clarifications to the descriptions of the cost categories. For example, 
Widelity proposed clarifying that the ``Virtual/

[[Page 48535]]

Cloud Core Deployment Cloud--Virtual IMS'' cost category range of 
estimated costs is for equipment providing service to ``up to 100,000 
subscribers.'' Widelity also proposed revising the description for 
``Antenna--LTE (Long Term Evolution)'' to represent costs for a typical 
10-port antenna, instead of an 8-port antenna, resulting in a decrease 
to the low-range of cost estimates from $2,087 to $1,479. Widelity also 
proposed adding additional cost subcategories to provide further 
specificity and guidance to applicants. For example, Widelity proposed 
adding a Distribution Layer Equipment cost category for ``Hybrid Cable 
& Radio Jumpers, Tower Ancillary Components'' with a range of cost 
estimates. Widelity also proposed changes to the range of cost 
estimates proposed in the preliminary catalog to more accurately 
reflect reasonable costs typically incurred managing a network. For 
example, Widelity proposed increasing the high-end of the range of cost 
estimates for ``Tower/Installation Crews,'' ``Mobilization Less than or 
Equal to 250 Miles (2-4 Member Crew),'' from $3,000 to $6,000.
    100. Because the Bureau finds that Widelity's proposed 
modifications and clarifications improve the accuracy and quality of 
the Catalog and will aid participants preparing their initial cost 
estimates, it revises the Catalog to include additional changes 
identified by Widelity. A complete listing of the changes to the 
preliminary catalog that are reflected in the final Catalog are 
included as an attachment to the Catalog in Appendix C of the PN.
    101. Highly Variable Expenses. For certain expenses identified in 
the preliminary catalog--such as costs associated with network security 
equipment, network automation, and network integrator services--a range 
could not be quantified, most often due to the highly variable nature 
of the cost. Taxes, for example, vary by state and locality and/or tax 
exemption and therefore could not be quantified for the Catalog. The 
same holds true for special access site costs which vary by site and 
region. For these expenses, while the Bureau recognizes they are 
potentially reimbursable, applicants will not be able to rely on the 
Catalog as there is no quantified range. Accordingly, for such 
expenses, applicants will need to provide an individual cost estimate 
with supporting documentation. The Bureau has moved those expense 
descriptions to the back of the Catalog merely as an acknowledgement 
that it has considered such costs and recognize they are potentially 
eligible for reimbursement even though a cost estimate range could not 
be quantified.

C. Final Replacement List

    102. The Bureau adopts a final List of Categories of Suggested 
Replacement Equipment and Services (Replacement List) to guide 
providers removing, replacing, and disposing of covered communications 
equipment and services. Section 4(d)(1) of the Secure Networks Act 
directs the Commission to ``develop a list of suggested replacements of 
both physical and virtual communications equipment, application and 
management software, and services or categories of replacements of both 
physical and virtual communications equipment, application and 
management software and services.'' The list must be ``technology 
neutral and may not advantage the use of reimbursement funds for 
capital expenditures over operational expenditures.'' Accordingly, in 
the 2020 Supply Chain Order, Commission mandated the development of a 
Replacement List ``that will identify the categories of suggested 
replacements of real and virtual hardware and software equipment and 
services to guide providers removing covered communications equipment 
from their networks.'' and directed the Bureau to issue a public notice 
announcing the Replacement List. The Bureau sought and received comment 
on a preliminary Replacement List prepared by Widelity in the Catalog 
PN. After considering the comments addressing the preliminary 
Replacement List received in response to the Catalog PN, the Bureau 
declines to make any changes to the preliminary Replacement List.
    103. Santel Communications Cooperative, Inc. (Santel) asked the 
Bureau to ``add a statement in the Replacement List acknowledging that 
replacing covered equipment with other advanced communications services 
equipment, specifically including [fiber-to the-premises (FTTP)] 
equipment, qualifies for reimbursement under the Supply Chain 
Reimbursement Program.'' In the 2021 Supply Chain Order, however, the 
Commission explained that it generally views fiber link replacements, 
including FTTP, as a technology upgrade and not a reasonable, 
comparable replacement for covered communications equipment and 
services. Participants may upgrade communications equipment and 
services under the Reimbursement Program but, as the Commission 
explained, will ultimately bear the difference in cost between the 
comparable replacement and the upgrade. Because cost determinations are 
very case-by-case specific, and FTTP is generally considered an 
upgrade, not a reasonable, comparable replacement, the Bureau declines 
to adopt Santel's proposed modification to the Replacement List.
    104. ADTRAN seeks to ``incorporate a `Buy American' preference into 
the suggested Replacement Equipment.'' However, when Congress created 
the Reimbursement Program it did not express a preference for providers 
to replace covered communications equipment and services with equipment 
and services provided by U.S. companies. Similarly, and by ADTRAN's own 
admission, Congress did not include a ``Buy American'' preference for 
the Reimbursement Program in sections 901 or 906 of the Secure Networks 
Act. Furthermore, in the 2020 Supply Chain Order the Commission 
explained that the Replacement List should ``provide carriers with the 
flexibility to select the equipment or services that fit their needs 
from categories of equipment and services.'' Consistent with the 2020 
Supply Chain Order, the Bureau provides participants with the 
flexibility to select U.S. and non-U.S. equipment or services 
(excluding, of course, Huawei and ZTE equipment or services) that 
satisfy their obligations under the Reimbursement Program. Accordingly, 
the Bureau declines to adopt ADTRAN's proposed modification to the 
Replacement List.
    105. Accordingly, for the reasons stated herein, the Bureau adopts 
the preliminary replacement list proposed in the Catalog PN, without 
changes, as the final Replacement List for use in the Reimbursement 
Program. Consistent with the 2020 Supply Chain Order, the Bureau will 
publish the final Replacement List on the Commission's website and 
issue a public notice at least annually announcing any updates to the 
Replacement List, to the extent there are any updates, to ensure that 
the Replacement List remains current. The final Replacement List is 
attached as Appendix D of the PN.

D. Widelity Report

    106. The Bureau also sought comment in the Catalog PN on the Supply 
Chain Reimbursement Program Study (Report) prepared by Widelity. The 
Report represents the views of Widelity, not the views of the 
Commission or the Bureau, and is not an official Commission document. 
While the Bureau appreciates comments received addressing and proposing 
changes to the Report, the Bureau did not intend for further revisions 
to the Report by Widelity and instead sought comment

[[Page 48536]]

only to help gauge the adequacy and sufficiency of the subjects covered 
in the Report as the Bureau works to implement the Reimbursement 
Program. Specifically, the Report was intended ``as an industry and 
technology overview and explains Widelity's methodologies used to 
develop the initial version of the proposed Catalog and Replacement 
List.'' Comments on the Report are relevant only to the extent they 
inform the finalization of the Catalog and Replacement List. The final 
Catalog will be used by participants to estimate initial costs, and the 
final Replacement List will serve as a suggested guide to participants 
replacing equipment and services. Accordingly, the Bureau finds it 
unnecessary to require further revisions to the Widelity Report.

III. Procedural Matters

E. Paperwork Reduction Act

    107. This document does not contain new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. Therefore, it does not contain any new or 
modified information collection burden for small business concerns with 
fewer than 25 employees, pursuant to the Small Business Paperwork 
Relief Act of 2002, Public Law 107-198. The Commission has submitted 
the information collection requirements contained in the 2020 Supply 
Chain Order, including FCC Form 5460, to the Office of Management and 
Budget (OMB) for review under Section 3507(d) of the PRA. OMB, the 
general public, and other Federal agencies will be invited to comment 
on those requirements.

F. Congressional Review Act

    108. The Commission has determined, and the Administrator of the 
Office of Information and Regulatory Affairs, OMB, concurs, that these 
requirements are non-major under the Congressional Review Act, 5 U.S.C. 
804(2). The Bureau will send a copy of this document to Congress and 
the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).
    109. Legal Authority. The Bureau establishes procedures for the 
Reimbursement Program pursuant to the authority contained in section 4 
of the Secure Networks Act, as amended, 47 U.S.C. 1603, and Sec.  
1.50004(p) of the Commission's rules, 47 CFR 1.50004(p).
    110. Treasury Offset. The U.S. Department of the Treasury 
(Treasury) has a number of collection tools, including the Treasury 
Offset Program (TOP), whereby it collects delinquent debts owed to 
Federal agencies and states by individuals and entities, by offsetting 
those debts against Federal monies owed to the debtors. As noted in the 
Reimbursement Process PN, TOP will apply to disbursements from the 
Reimbursement Program. Reimbursement Program participants owing past-
due debt to a Federal agency or a state may have all or part of their 
disbursement payments offset by Treasury to satisfy such debt. Prior to 
referral of its debt to Treasury, an entity is notified of the debt 
owed, including repayment instructions. If the referred debt of a 
Reimbursement Program participant remains outstanding at the time of a 
disbursement payment from the Reimbursement Program to that 
participant, the participant will be notified by Treasury that some or 
all of its payment has been offset to satisfy an outstanding Federal or 
state debt. Program participants that owe past due Federal or state 
debts that have been referred to Treasury are encouraged to resolve 
such debts prior to submitting their Application Request for Funding 
Allocation. The Bureau lacks discretion to deviate from the 
requirements of the TOP.
    111. RWA recognizes the Commission lacks the authority to deviate 
from the TOP requirements but ``encourages the Reimbursement Program 
Fund Administrator and the FCC to work through any debt collection 
issues with the applicant prior to funds being released so that an 
applicant can cure any outstanding debts in order to receive funding.'' 
The Bureau will endeavor to work with participants, to the extent 
practicable, on Treasury Offset debt collection issues in connection 
with the disbursement process. Participants are, however, encouraged to 
proactively identify and resolve any outstanding Federal and state debt 
issues before participating in the Reimbursement Program that could 
lead to a Treasury Offset.
    112. Do Not Pay. Absent comment on the issue, the Commission adopts 
the proposal for the Bureau in coordination with the Commission's 
Office of Managing Director to ``conduct a thorough review of the 
federal `Do Not Pay' system database to verify an applicant's 
eligibility for payments and awards'' before distributing the funding. 
Pursuant to the Payment Integrity Information Act of 2019 (PIIA), the 
Commission is required to ensure that a thorough review of available 
databases with relevant information on eligibility occurs to determine 
program or award eligibility and prevent improper payments before the 
release of any federal funds.'' The Department of Treasury's Do Not Pay 
system is designed to decrease improper payments in Federal programs 
such as the payment of funds to ineligible recipients, overpayment, or 
underpayment.
    113. Under the PIIA, the Commission is required to verify the 
eligibility of the funding recipient in multiple databases before 
allocating and distributing the funding. The Reimbursement Program Fund 
Administrator will initially check whether an applicant is identified 
in the Do Not Pay system. If an applicant is ineligible for funding 
under the Do Not Pay system, the Reimbursement Program Fund 
Administrator will notify the applicant and provide an opportunity for 
the applicant to expeditiously resolve the matter with the Do Not Pay 
system. The Bureau will not allocate funding to the applicant if an 
applicant is ineligible for funding under the Do Not Pay system. If a 
check of the Do Not Pay system results in a finding that a 
Reimbursement Program applicant is ineligible for funding or payment, 
the Commission will withhold funding and/or payments as appropriate. 
The Program Administrator may work with the applicant to give it an 
opportunity to resolve its listing in the Department of the Treasury's 
Do Not Pay system if the applicant can produce evidence that its 
listing in the Do Not Pay system should be removed. However, the 
applicant or program participant will be responsible for working with 
the relevant agency to correct its information before funding can be 
allocated or payment can be made by the Commission.''
    114. Red Light Rule. In the Reimbursement Procedures PN, the Bureau 
sought comment on waiving the Commission's ``red light rule'' for all 
funding allocations and disbursements from the Reimbursement Program. 
RWA supported this proposal. Accordingly, the Bureau will waive the 
``red light rule'' for the Reimbursement Program as discussed in this 
document.
    115. The Commission's ``red light rule'' prevents parties who are 
delinquent on debts owed to the Commission from receiving benefits from 
the Commission while the debts remain unpaid. The Commission adopted 
the ``red light rule'' in implementation of the Federal Debt Collection 
Improvement Act of 1996 that sought to ``maximize collections of 
delinquent debts owed to the Government . . .'' The Commission has the 
authority to waive the ``red light rule'' for ``good cause shown'' 
under the Commission's rules. The Commission can waive compliance with 
its own regulations when ``particular facts

[[Page 48537]]

would make strict compliance [with the regulation] inconsistent with 
the public interest.'' The Bureau finds that the waiver of the ``red 
light rule'' is justified in this instance given the national security 
risks posed to U.S. networks by Huawei and ZTE covered communications 
equipment and services.
    116. Final Regulatory Flexibility Certification. The Regulatory 
Flexibility Act of 1980, as amended (RFA), requires that an agency 
prepare a regulatory flexibility analysis for notice and comment 
rulemakings, unless the agency certifies that ``the rule will not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities.'' The RFA generally defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction.'' In 
addition, the term ``small business'' has the same meaning as the term 
``small business concerns'' under the Small Business Act. A ``small 
business concern'' is one that: (1) Is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA).
    117. The Commission prepared Initial Regulatory Flexibility 
Analyses (IRFAs) in connection with the 2020 Supply Chain Declaratory 
Ruling, 85 FR 47211, August 4, 2020, 2020 Supply Chain Second Further 
Notice of Proposed Rulemaking (FNPRM), 85 FR 48134, August 10, 2020, 
and the 2021 Supply Chain Third FNPRM, 86 FR 15165, March 22, 2021. The 
Commission sought written public comment on the proposals in the 2020 
Supply Chain Declaratory Ruling, 2020 Supply Chain Second FNPRM, and 
the 2021 Supply Chain Third FNPRM, including comments on the IRFAs. No 
comments were filed addressing the IRFAs. The Commission included Final 
Regulatory Flexibility Analyses (FRFAs) in connection with the 2020 
Supply Chain Order and the 2021 Supply Chain Order.
    118. This document establishes procedures for the Reimbursement 
Program to implement the rules adopted by the Commission for the 
Reimbursement Program in the 2020 Supply Chain Order and in the 2021 
Supply Chain Order. In particular, this document establishes procedures 
for, among other things, determining program eligibility and 
participating in the program, including the filing and processing of 
applications. The procedures established in this document flow from the 
proposals set forth in the 2020 Supply Chain Declaratory Ruling, 2020 
Supply Chain Second FNPRM, and the 2021 Supply Chain Third FNPRM and 
discussed in the IRFAs accompanying those Notices, and are consistent 
with the requirements established in the 2020 Supply Chain Order and 
the 2021 Supply Chain Order and addressed in the FRFAs accompanying 
those Orders. Accordingly, no changes to our earlier analyses are 
required.
    119. The Bureau has determined that the impact on the entities 
affected by the requirements contained in this document will not be 
significant. The effect of these measures is to establish for the 
benefit of those entities, including small entities, the procedures for 
filing an application consistent with existing rules, to participate in 
the Reimbursement Program to obtain funding support to remove from 
their networks, replace, and dispose of communications equipment and 
service considered a national security risk.
    120. The Bureau therefore certifies that the requirements of this 
document will not have a significant economic impact on a substantial 
number of small entities. The Bureau will send a copy of the document 
including a copy of this Final Regulatory Flexibility Certification, in 
a report to Congress pursuant to the Congressional Review Act. In 
addition, the document and this final certification will be sent to the 
Chief Counsel for Advocacy of the SBA, and will be published in the 
Federal Register.

Federal Communications Commission.
Cheryl Callahan,
Assistant Chief, Telecommunications Access Policy Division, Wireline 
Competition Bureau.
[FR Doc. 2021-18446 Filed 8-30-21; 8:45 am]
BILLING CODE 6712-01-P