FCC Adopts Order Restricting USF Funding on Huawei/ZTE; Possible Future Ban on All Equipment

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The FCC has unanimously adopted a Report and Order, Order, and Further Notice of Proposed Rulemaking addressing the continued funding and use of telecommunications equipment manufactured by “covered companies” such as Huawei and ZTE. While the final language has yet to be released: (1) the Report and Order designates Huawei and ZTE as “covered companies” and bars USF recipients from spending funds on the purchase of equipment and services from those companies; (2) the Order establishes a certification and audit regime to enforce the new rule; and (3) the Further Notice of Proposed Rulemaking proposes to require all ETCs, and possibly even all American telecommunications carriers, to remove and replace all existing equipment and services sourced from covered companies. Additionally, the FNPRM proposes to create a funding mechanism, ideally through Congressional appropriation, that would help the FCC cover the costs of removing all equipment and services provided by covered companies. Earlier this year, Commissioner Geoffrey Starks organized a stakeholder meeting on the issue of telecommunications equipment and national security and earlier today he released a report on his proposed solution to “find it, fix it, and fund it.”

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