§  1.50004   Secure and Trusted Communications Networks Reimbursement Program.

   Link to an amendment published at  86 FR 2944 , Jan. 13, 2021.

   Link to an amendment published at  86 FR 47021 , Aug. 23, 2021.

   (a) Eligibility. Providers of advanced communications service with two
   million or fewer customers are eligible to participate in the
   Reimbursement Program to reimburse such providers for costs reasonably
   incurred for the replacement, removal, and disposal of covered
   communications equipment or services if:

   (1) The covered communications equipment or service to be removed,
   replaced, or disposed of was purchased, rented, leased or otherwise
   obtained before August 14, 2018 and on the initial Covered List
   published per § 1.50002; or

   (2) The covered communications equipment or service was added to the
   Covered List per § 1.50003, then no later than 60 days after the date of
   addition to the Covered List;

   (3) The provider certifies:

   (i) As of the date of the submission of the application, the provider
   has developed:

   (A) A plan for the permanent removal and replacement of any covered
   communications equipment or service that is in the communications
   network of the provider as of such date; and the disposal of the
   equipment or services removed; and

   (B) A specific timeline for the permanent removal, replacement, and
   disposal of the covered communications equipment or service, which
   timeline shall be submitted to the Commission as part of the
   application per paragraph (c)(1)(iv) of this section; and

   (ii) beginning on the date of the approval of the application, the
   provider:

   (A) Will not purchase, rent, lease, or otherwise obtain covered
   communications equipment or service, using reimbursement funds or any
   other funds (including funds derived from private sources); and

   (B) In developing and tailoring the risk management practices of the
   applicant, will consult and consider the standards, guidelines, and
   best practices set forth in the cybersecurity framework developed by
   the National Institute of Standards and Technology.

   (b) Filing window. The Wireline Competition Bureau shall announce the
   opening of an initial application filing window for eligible providers
   seeking to participate in the Reimbursement Program for the
   reimbursement of costs reasonably incurred for the removal,
   replacement, and disposal of covered communications equipment and
   services. The Wireline Competition Bureau may implement additional
   filing windows as necessary and shall provide notice before opening any
   additional filing window, and include in that notice the amount of
   funding available. The Wireline Competition Bureau shall treat all
   eligible providers filing an application within any filing window as if
   their applications were simultaneously received. Funding requests
   submitted outside of a filing window will not be accepted.

   (c) [Reserved]

   (d) Application review process. The Wireline Competition Bureau will
   review applications to determine whether the application is complete,
   whether the applicant is eligible for the Reimbursement Program, and to
   assess the reasonableness of the cost estimates provided by the
   applicant. The Wireline Competition Bureau shall approve or deny
   applications to receive a funding allocation from the Reimbursement
   Program within 90 days after the close of the applicable filing window.
   The Wireline Competition Bureau may extend the deadline for granting or
   denying applications for up to an additional 45 days if it determines
   that an excessive number of applications have been filed during the
   window and additional time is needed to review the applications.

   (1) [Reserved]

   (2) Denial of an application shall not preclude the applicant from
   submitting a new application for reimbursement in a subsequent filing
   window.

   (e) Funding allocation. Once an application is approved, the Wireline
   Competition Bureau will allocate funding on the applicant's behalf to
   the United States Treasury for draw down by the Reimbursement Program
   recipient as expenses are incurred pursuant to the funding disbursement
   process provided for in paragraph (g) of this section.

   (f) Prioritization of support. The Wireline Competition Bureau shall
   issue funding allocations in accordance with this section after the
   close of a filing window. After a filing window closes, the Wireline
   Competition Bureau shall calculate the total demand for Reimbursement
   Program support submitted by all eligible providers during the filing
   window period. If the total demand received during the filing window
   exceeds the total funds available, then the Wireline Competition Bureau
   shall allocate the available funds consistent with the following
   priority schedule:

   Table 1 to Paragraph (f)—Prioritization Schedule
   Priority 1: Advanced communication service providers with 2 million or
   fewer customers that are Eligible Telecommunication Carriers subject to
   section [54.11] (new removal and replacement requirement). Priority 1a:
   Costs reasonably incurred for transitioning core network(s).
   Priority 1b: Costs reasonably incurred for non-core network transition.
   Priority 2: Non-ETC providers of advanced communications service with 2
   million or fewer customers that participated in the Supply Chain
   Security Information Collection, OMB Control No. 3060-1270. Priority
   2a:* Costs reasonably incurred for transitioning core network(s).
   Priority 2b:* Costs reasonably incurred for non-core network
   transition.
   Priority 3: Other non-Eligible Telecommunication Carriers that are
   providers of advanced communication service with 2 million or fewer
   customers. Priority 3a: Costs reasonably incurred for transitioning
   core network(s).
   Priority 3b: Costs reasonably incurred for non-core network transition.

   (1) Application of prioritization schedule. The Wireline Competition
   Bureau shall issue full funding allocations for all eligible providers
   in the Priority 1 prioritization category before issuing funding
   allocations in any subsequent prioritization categories. The Wireline
   Competition Bureau shall continue to review all funding requests and
   issue funding allocations by prioritization category until there are no
   available funds remaining. If there is insufficient funding to fully
   fund all requests in a particular prioritization category, then the
   Wireline Competition Bureau will pro-rate the available funding among
   all eligible providers in that prioritization category. Requests for
   funds in subsequent prioritization categories will be denied for lack
   of available funding.

   (2) Pro-rata reductions. When pro-rata reductions are required per
   paragraph (f)(1) of this section, the Wireline Competition Bureau
   shall:

   (i) Divide the total remaining funds available by the demand within the
   specific prioritization category to produce a pro-rata factor;

   (ii) Multiply the pro-rata factor by the total dollar amount requested
   by each recipient in the prioritization category; and

   (iii) Allocate funds to each recipient consistent with this
   calculation.

   (g) [Reserved]

   (h) Removal, replacement, and disposal term. Reimbursement Program
   recipients must complete the permanent removal, replacement, and
   disposal of covered communications equipment or service within one year
   of receiving the initial draw down disbursement from their funding
   allocation.

   (1) General extension. The Commission may extend by a period of six
   months the removal, replacement, and disposal term to all Reimbursement
   Program recipients if the Commission:

   (i) Finds that 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

   (ii) Provides notice and detailed justification for granting the
   extension to:

   (A) The Committee on Energy and Commerce of the House of
   Representatives; and

   (B) The Committee on Commerce, Science, and Transportation of the
   Senate.

   (2) Individual extensions. Prior to the expiration of the removal,
   replacement and disposal term, a Reimbursement Program recipient may
   petition the Wireline Competition Bureau for an extension of the term.
   The Wireline Competition Bureau may grant an extension for up to six
   months after finding, that due to no fault of such recipient, such
   recipient is unable to complete the permanent removal, replacement, and
   disposal by the end of the term. The Wireline Competition Bureau may
   grant more than one extension request to a recipient if circumstances
   warrant.

   (i) Limitations on funding use. A Reimbursement Program recipient may
   not:

   (1) Use reimbursement funds to remove, replace or dispose of any
   covered communications equipment or service purchased, rented, leased,
   or otherwise obtained:

   (i) On or after August 14, 2018, if on the initial Covered List
   published per § 1.50002; or

   (ii) On or after 60 days after the date of addition to the Covered List
   if the communications equipment or services were subsequently added to
   the Covered List per § 1.50003; or

   (2) Purchase, rent, lease, or otherwise obtain any covered
   communications equipment or service, using reimbursement funds or any
   other funds (including funds derived from private sources).

   (j)-(n) [Reserved]

   (o) Audits, reviews, and field investigations. Recipients shall be
   subject to audits and other investigations to evaluate their compliance
   with the statutory and regulatory requirements for the Reimbursement
   Program. Recipients must provide consent to allow vendors or
   contractors used by the recipient in connection with the Reimbursement
   Program to release confidential information to the auditor, reviewer,
   or other representative. Recipients shall permit any representative
   (including any auditor) appointed by the Commission to enter their
   premises to conduct compliance inspections.

   (p) Delegation of authority. The Commission delegates authority to the
   Wireline Competition Bureau, to adopt the necessary policies and
   procedures relating to allocations, draw downs, payments, obligations,
   and expenditures of money from the Reimbursement Program to protect
   against waste, fraud, and abuse and in the event of bankruptcy, to
   establish a Catalog of Expenses Eligible for Reimbursement and
   predetermined cost estimates, review the estimated cost forms, issue
   funding allocations for costs reasonably incurred, set filing deadlines
   and review information and documentation regarding progress reports,
   allocations, and final accountings.