FCC chair proposes rules to fund 'rip-and-replace'FCC chair proposes rules to fund 'rip-and-replace'

FCC Chairwoman Jessica Rosenworcel today called for the agency to quickly adopt rules that will allow the FCC to proceed with a spectrum auction to fully fund the removal, replacement, and disposal of insecure Chinese-made Huawei and ZTE equipment and services from US networks without further delay. The recently passed National Defense Authorization Act provides essential funding for the Secure and Trusted Communications Networks Reimbursement (or "Rip and Replace") Program by giving the Commission authority to auction AWS-3 spectrum licenses in its inventory. The AWS-3 auction will be the Commission's first spectrum auction since its general auction authority lapsed in March of 2023. With the Notice of Proposed Rulemaking circulated today to her colleagues for their consideration, the Chairwoman seeks to start the rulemaking process necessary to run a successful auction to fully fund the "Rip and Replace" program. The Chairwoman has been a strong advocate for this vital national security program, sending nine letters to Congress stressing the need to address the critical funding shortfall for the program.

"With 'Salt Typhoon' and other recent incidents, we are all acutely aware of the risk posed by Chinese hackers and intelligence services to our privacy, economy, and security," said Chairwoman Rosenworcel. "Today's proposal is a critical step toward finally filling the shortfall in the Rip and Replace program. I am confident that the FCC's world-leading and award-winning auction team will meet this important moment."

The Notice of Proposed Rulemaking circulated today by Chairwoman Rosenworcel would, if adopted by a vote of the Commission, propose updates to the service-specific competitive bidding rules to grant licenses for spectrum in the FCC's inventory in the AWS-3 spectrum bands (generally the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands). In 2014, the Commission previously assigned the majority of AWS-3 licenses in Auction 97. Nevertheless, there remains spectrum in these bands that is not currently licensed due to various circumstances. Pursuant to the Congressional mandate, the Commission will now offer licenses for the unassigned AWS-3 spectrum in a new auction. The Notice also updates the definitions of small and very small businesses in the general part 1 competitive bidding rules to conform with the Small Business Act's five-year lookback period that has been used in recent spectrum auctions.

In 2021, Congress appropriated $1.9 billion to the Commission for the Rip and Replace Program, which reimburses eligible providers for reasonable costs incurred in the removal, replacement, and disposal of communications equipment or services produced or provided by Huawei Technologies Company or ZTE Corporation. However, because demand for funds exceeded available funding, the program required additional funding to complete the task of removing this harmful equipment. To address this shortfall, the Spectrum and Secure Technology and Innovation Act, signed into law as part of the NDAA on December 23, 2024, expressly allowed the FCC to borrow up to $3.08 billion from the Treasury Department to fully fund the Rip and Replace Program. This loan will then be repaid with the proceeds of the AWS-3 auction, for which the FCC is now considering proposed rules.

Read the full press release here.

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