[Federal Register Volume 85, Number 150 (Tuesday, August 4, 2020)]
[Notices]
[Pages 47211-47213]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16884]
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FEDERAL COMMUNICATIONS COMMISSION
[WC Docket No. 18-89; FCC 20-99; FRS 16963]
National Security Threats to the Communications Supply Chain
Through FCC Programs
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) finds it has already substantially complied with the
Secure and Trusted Communications Networks Act of 2019 (Secure Networks
Act) with the prohibition adopted in the 2019 Supply Chain Order.
DATES: This Declaratory Ruling is applicable July 17, 2020.
FOR FURTHER INFORMATION CONTACT: For further information, please
contact Brian Cruikshank, Wireline Competition Bureau,
[email protected], 202-418-7400 or TTY: 202-418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Declaratory Ruling in WC Docket No. 18-89, FCC 20-99, adopted on July
16, 2020 and released July 17, 2020. Due to the COVID-19 pandemic, the
Commission's headquarters will be closed to the general public until
further notice. The full text of this document is available at the
following internet address: https://www.fcc.gov/document/implementing-secure-networks-act-0. The Second Further Notice of Proposed Rulemaking
that was adopted concurrently with this Declaratory Ruling will be
published elsewhere in the Federal Register.
I. Introduction
1. America's communications networks have become the indispensable
infrastructure of our economy and our everyday lives. The COVID-19
pandemic has demonstrated as never before the importance of these
networks for employment and economic opportunity, education, health
care, social and civic engagement, and staying connected with family
and friends. It is therefore imperative that the Commission safeguards
this critical infrastructure from potential security threats.
2. The Commission has taken a number of targeted steps in this
regard. For example, in November 2019, the Commission prohibited the
use of public funds from the Commission's Universal Service Fund (USF)
to purchase or obtain any equipment or services produced or provided by
companies posing a national security threat to the integrity of
communications networks or the communications supply chain. The
Commission also initially designated Huawei Technologies Company
(Huawei) and ZTE Corporation (ZTE) as covered companies for purposes of
this rule, and the Commission established a process for designating
additional covered companies in the future. Additionally, last month,
the Commission's Public Safety and Homeland Security Bureau (PSHSB)
issued final designations of Huawei and
[[Page 47212]]
ZTE as covered companies, thereby prohibiting the use of USF funds on
equipment or services produced or provided by these two suppliers.
3. The Commission takes further steps to protect the nation's
communications networks from potential security threats as it
integrates provisions of the recently enacted Secure and Trusted
Communications Networks Act of 2019 (Secure Networks Act) into its
existing supply chain rulemaking proceeding. The Commission adopts a
Declaratory Ruling finding that, in the 2019 Supply Chain Order, 85 FR
230, January 3, 2020, it fulfilled its obligation pursuant to section 3
of the Secure Networks Act to prohibit the use of funds made available
through a Federal subsidy program administered by the Commission to
purchase, rent, lease, or otherwise obtain or maintain any covered
communications equipment or services from certain companies.
II. Declaratory Ruling
4. In the 2019 Supply Chain Order, the Commission prohibited the
use of universal service support for equipment and services produced or
provided by companies designated as a national security threat. The
Commission finds that its prohibition, codified in section 54.9 of the
Commission's rules, is consistent with and substantially implements
subsection 3(a) of the Secure Networks Act, which prohibits the use of
federal funds on certain communications equipment and services.
Accordingly, the Commission further finds that it has satisfied the
requirements of section 3(b) in the Secure Networks Act and it needs
not revisit or otherwise modify our prior action in the 2019 Supply
Chain Order.
5. Introduced prior to the adoption of the 2019 Supply Chain Order
and subsequently enacted on March 12, 2020, section 3(a) of the Secure
Networks Act prohibits ``[a] Federal subsidy that is made available
through a program administered by the Commission and that provides
funds to be used for the capital expenditures necessary for the
provision of advanced communications service'' from being used either
to ``purchase, rent, lease or otherwise obtain any covered
communications equipment or service; or maintain any covered
communications equipment or service . . . .'' The prohibition applies
``60 days after the date the Commission places such equipment or
service on the list'' required by section 2(a) of the statute.
6. In section 3(b), Congress directed the Commission to adopt a
Report and Order to implement this prohibition within 180 days
following the Secure Networks Act's enactment. Section 3(b) further
states, ``If the Commission has, before the date of the enactment of
this Act, taken action that in whole or in part implements subsection
(a), the Commission is not required to revisit such action, but only to
the extent such action is consistent with this section.'' The
Commission interprets the language in section 3(b) to mean that if it
has, prior to the enactment of the Secure Networks Act, already adopted
a prohibition on the use of Federal funds that substantially tracks the
statutory prohibition, then the Commission is deemed to have satisfied
the 180-day deadline contained in section 3(b) and need not revisit its
prior action. To avail itself of this exception to the statutory
deadline, however, the Commission's previously adopted prohibition must
be ``consistent'' with, i.e., compatible with, and must not conflict
with, the requirements of section 3(a).
7. In the 2019 Supply Chain Order, the Commission prohibited the
use of universal service support to ``maintain, improve, modify,
operate, manage, or otherwise support any equipment or services
produced or provided by a company posing a national security threat to
the integrity of the communications networks or the communications
supply chain.'' The Commission also initially designated two companies,
Huawei and ZTE, as companies posing a national security threat. PSHSB
recently issued final designations of these entities, thereby
prohibiting the use of USF funds to maintain, improve, modify, operate,
manage, or otherwise support equipment or services produced or provided
by Huawei and ZTE effective June 30, 2020.
8. The Commission's prohibition in the 2019 Supply Chain Order is
consistent with and substantially implements the prohibition required
by section 3(a) of the Secure Networks Act. The Commission starts by
noting that it administers two ongoing programs that provide a
``Federal subsidy'': the USF, a Federal subsidy program that subsidizes
the cost of obtaining communications equipment and/or services for
carriers serving high-cost areas, schools and libraries, rural health
care providers, and low-income households, and the Interstate
Telecommunications Relay Service Fund, a Federal subsidy program that
subsidizes the cost of relay services for individuals who are deaf,
hard of hearing, deaf/blind, or have a speech impediment. Given that
the USF, unlike the Interstate Telecommunications Relay Service Fund,
``provides funds to be used for the capital expenditures necessary for
the provision of advanced communications service,'' we believe Congress
clearly intended the section 3 prohibition to apply to the USF.
9. The Commission also finds the scope of communications equipment
and services covered by the Commission's prohibition encompasses the
scope of the Secure Networks Act's section 3 prohibition. The
Commission's prohibition broadly covers ``any equipment or services
produced by any company posing a national security threat.'' In
comparison, the prohibition in section 3 of the Secure Networks Act
applies to ``any covered communications equipment or service.'' Covered
communications equipment or service is limited to that which is capable
of certain functions and capabilities or otherwise poses a security
threat. Although the Commission's prohibition goes further than the
requirements of the Secure Networks Act, it does not conflict with the
statutory requirements of section 3(a). Accordingly, by complying with
the Commission's broader prohibition, USF support recipients will be in
compliance with the Secure Networks Act prohibition. Section 3(a) of
the Secure Networks Act also specifies that the ban takes effect 60
days after the Commission places the equipment or service on the list
required by section 2 of the statute. The Commission believes that rule
54.9 substantially implements this section 3 requirement by providing a
notice period for interested parties (which, if opposed, the Commission
would expect to last at least 60 days) and stating that the ban takes
effect only when initial designations of covered companies are
finalized. However, to the extent there are differences between the
Commission's rules and section 3 of the Secure Networks Act, it seeks
comment on additional changes to its rules.
10. With the Commission's adoption of the prohibition in the 2019
Supply Chain Order, the Commission has substantially implemented the
section 3 statutory mandate to adopt a prohibition on covered
communications equipment or services. As such, the Commission avails
ourselves of the proviso, set forth in section 3(b), not to revisit its
prior action implementing the mandate. Nevertheless, in the
concurrently adopted Further Notice, the Commission seeks comment on
additional changes to its rules pursuant to section 3 of the Secure
Networks Act.
III. Ordering Clause
11. It is further Ordered that, pursuant to Section 3 of the Secure
Networks Act,
[[Page 47213]]
47 U.S.C. 1602 and the authority contained in Sections 1, 4(i), 201(b),
214, 254, 303(r), and 403 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i), 155(b), 155(c), 201(b), 214, 254,
303(r), and 403, and Sections 1.2 and 54.9 of the Commission's rules,
47 CFR 1.2 and 54.9, the Declaratory Ruling in WC Docket No. 18-89 is
adopted.
12. It is further Ordered that the Declaratory Ruling is effective
upon release.
Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2020-16884 Filed 8-3-20; 8:45 am]
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