FCC Posts Supply Chain Security, Other Drafts for Dec. 10 Meeting

The FCC released the three draft items Chairman Ajit Pai is proposing for the Dec. 10 meeting (see 2011180065). The meeting will be headlined by a report and order implementing the Secure and Trusted Communications Networks Act, with an NPRM on equipment certification rules and an order on ATSC 3.0 datacasting. Industry officials said it's unclear whether FCC Democrats will consider any of the drafts controversial or major items that should be left for next year under the new commission.

Supply chain security has been a top issue under Pai, with general support from the rest of commissioners (see 2007160051). A draft order proposes rules for publishing and modifying a list of telecom equipment and services that “Congress or enumerated national security agencies or interagency bodies with appropriate national security expertise determine pose an unacceptable risk to the national security of the United States or the safety and security of its people.”

The rules would prohibit any such federal subsidy made available through the USF and establish a Secure and Trusted Communications Network Reimbursement Program to pay for the costs of ripping and replacing gear barred from U.S. networks. Congress would have to fund that. All providers of advanced communications services would have to report whether their networks use “covered communications equipment or services” acquired after Aug. 14, 2018. Huawei and ZTE, the first two equipment providers identified by the FCC, didn’t comment Thursday.

“We slightly modify our rule from our original proposal,” the draft says: “We conclude upon review of the record in this proceeding and after considering the Secure Networks Act that our proposal risks being too broad and excessively burdensome.” The “slightly modified and more narrowly tailored rule” instead provides a “risk-based assessment of problematic equipment and services within a network, consistent with the approach taken in section 889 of the 2019 [National Defense Authorization Act] and ultimately incorporated into section 2 of the Secure Networks Act,” the draft says. The covered list is now “limited to such equipment and services that the federal government, including the U.S. intelligence community, has identified as national security threats and that are placed at the most vulnerable spots in our communications infrastructure.”

Pai proposes that if aggregate demand exceeds available funding, “we will prioritize funding for [eligible telecom carriers] and expenses for transitioning core networks over non-ETCs and non-core network transition expenses.”

The FCC continues to push forward on other work tied to Chinese companies’ U.S. operations. Wednesday, it extended by two weeks, until Dec. 11, its deadline for responding to Huawei’s application for review of its status as a covered company barred from participating in the USF (see 2006300078). “Huawei responded to the initial designation order with comments totaling more than 5,000 pages,” the Public Safety Bureau said. “A brief extension of time will allow the Commission to fully and adequately consider the voluminous record in this proceeding, and is consistent with the Commission’s commitment to providing appropriate process to potentially affected parties.”

The International Bureau reclaimed international signaling point codes (ISPCs) in California that it said China Telecom never used. “China Telecom Americas is not in compliance with the conditions of its provisional ISPC assignments, and we reclaim the three ISPCs and make them immediately available for reassignment,” the bureau said: “China Telecom Americas’ statement that it seeks to retain the ISPCs for potential use in new services does not provide sufficient reason for it to retain these assignments.” The company didn’t comment.

Equipment

The equipment certification NPRM proposes to “modernize” marketing rules to permit conditional sales of RF devices to consumers before equipment authorization, “provided those devices are not delivered to consumers until equipment authorization has been obtained.” The draft proposes to allow importing a “limited number” of RF devices for “pre-sale activities prior to the devices obtaining a certification.”

“Pre-sale activities would include packaging and shipping devices to retail locations, as well as loading devices with specific software to demonstrate specific features and capabilities of the devices,” the draft says. The FCC would seek comment on conditions to ensure that RF devices “comply with this new importation provision prior to obtaining equipment authorization.” CTA asked for the NPRM in June (see 2006030044) and welcomed the inquiry, which had broad support (see 2007100042).

“The FCC’s current equipment authorization rules handicap the U.S. in the global race to 5G,” said Jamie Susskind, CTA vice president-policy and regulatory affairs. “Today’s announcement … is an important step toward bringing policies more closely in line with today’s marketplace,” she said: “The FCC now has the opportunity to advance U.S. leadership in wireless.”

“Extremely pleased NPRM making sound & justifiable @FCC Equipment Authorization fixes is teed-up for December Open Meeting,” Commissioner Mike O’Rielly tweeted: “No opposition to date; should generate bipartisan and broad approval! #LastProject.”

The draft order on ATSC 3.0 datacasting would base ancillary service fees on the gross revenue of broadcasters rather than the companies that lease their spectrum, retain the existing standards for broadcast service derogation, and adjust the ancillary service fee percentage for noncommercial stations to 2.5%. Commercial stations would still pay 5%.

“We do not have sufficient information at this early stage in the ATSC 3.0 transition to evaluate fully” further changes to the fee structure, the draft docket 20-145 order said. Broadcast industry officials told us they expect the item to be noncontroversial since it changes little for commercial stations. The broadcast internet proceeding has been heavily plugged by Commissioner Brendan Carr, and O’Rielly has historically supported 3.0 rulemakings. The datacasting item that teed up this draft order was unanimously approved (see 2006090060), though Commissioner Jessica Rosenworcel raised concerns about 3.0’s lack of backward compatibility. The draft order rejects a proposal from public interest groups to use ancillary service fees to fund consumer purchases of 3.0-compatible devices.