Photo of Caroline BrownPhoto of Adelicia R. CliffePhoto of Kate M. Growley, CIPP/G, CIPP/USPhoto of Stephanie Crawford

On January 13, 2021, the Federal Communications Commission (FCC) published a final rule that requires advanced communications providers to review their equipment and services within their networks and either: (1) certify that they do not include any covered equipment; or (2) file an annual report with the FCC that identifies covered communications equipment or services (as described below), details information about the equipment/service and their removal or replacement plan, and justifies the use of the equipment/service, among other things. Government contractors that have to make a representation under Section 889(a)(1)(B) of the FY2019 NDAA are challenged if they operate in rural locations where there may not be providers that do not use covered equipment or services. This rule may ultimately alleviate that issue for contractors by requiring and providing funding for removal and replacement of covered equipment and services. The new rule, which implements the Secure and Trusted Communications Networks Act of 2019, is effective March 15, 2021, with limited exceptions for the required reporting and parts of the rule’s removal, replacement, disposal, and reimbursement requirements.

The rule establishes processes and procedures for the creation of a list of covered communications equipment and services determined to be a risk to national security (“Covered List”). The FCC’s Public Safety and Homeland Security Bureau will include equipment and services on the Covered List, which is subject to modification, that (1) are produced or provided by any entity if the equipment or services pose an unacceptable risk to U.S. national security or U.S. persons, as specifically determined by certain agencies or departments; and (2) are capable of routing or redirecting user data traffic or permitting visibility into any user data or packets that the equipment or services transmit or handle, causing advanced communications service providers’ networks to be disrupted remotely, or otherwise posing an unacceptable risk to U.S. national security or U.S. persons.

The rule also:

  • Directs the FCC to develop a list of categories of suggested replacements for equipment and services included on the Covered List;
  • Establishes the Secure and Trusted Communications Networks Reimbursement Program for those providers of advanced communications services with two million or fewer customers. Participants in the program must meet certain criteria and certify, among other things, that they have established a plan for the permanent removal and replacement of any covered communications equipment or services. The rule includes penalties for those reimbursement recipients who violate the Secure and Trusted Communications Networks Act of 2019. These penalties include reimbursing the government, barring from the reimbursement program, referral to criminal or civil law enforcement agencies, and barring from other FCC programs.
  • FCC subsidies may not be used for the purchase or maintenance of covered equipment and services.
  • Directs recipients of Universal Service Fund support to “rip and replace” covered equipment and services prior to receiving a funding commitment or support, unless they are participating in the reimbursement program.
   

 

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Photo of Caroline Brown Caroline Brown

Caroline E. Brown is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s White Collar & Regulatory Enforcement and International Trade groups and the steering committee of the firm’s National Security Practice. She provides strategic advice to…

Caroline E. Brown is a partner in Crowell & Moring’s Washington, D.C. office and a member of the firm’s White Collar & Regulatory Enforcement and International Trade groups and the steering committee of the firm’s National Security Practice. She provides strategic advice to clients on national security matters, including anti-money laundering (AML) and economic sanctions compliance and enforcement challenges, investigations, and cross border transactions, including review by the Committee on Foreign Investment in the United States (CFIUS) and the Committee on Foreign Investment in the U.S. Telecommunications Services Sector (Team Telecom).

Caroline brings over a decade of experience as a national security attorney at the U.S. Departments of Justice and the Treasury. At the U.S. Department of Justice’s National Security Division, she worked on counterespionage, cybersecurity, and counterterrorism matters and investigations, and gained unique insight into issues surrounding data privacy and cybersecurity. In that role, she also sat on both CFIUS and Team Telecom and made recommendations to DOJ senior leadership regarding whether to mitigate, block, or allow transactions under review by those interagency committees. She also negotiated, drafted, and reviewed mitigation agreements, monitored companies’ compliance with those agreements, and coordinated and supervised investigations of breaches of those agreements.

Photo of Adelicia R. Cliffe Adelicia R. Cliffe

Adelicia Cliffe is a partner in the Washington, D.C. office, a member of the Steering Committee for the firm’s Government Contracts Group, and a member of the International Trade Group. Addie is also co-chair of the firm’s National Security practice. Addie has been…

Adelicia Cliffe is a partner in the Washington, D.C. office, a member of the Steering Committee for the firm’s Government Contracts Group, and a member of the International Trade Group. Addie is also co-chair of the firm’s National Security practice. Addie has been named as a nationally recognized practitioner in the government contracts field by Chambers USA.