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Senators Hassan, Shaheen Urge Senate to Protect Rural Networks from Chinese Threats

Bipartisan Push Builds on Senator Hassan and Colleagues’ Efforts to Remove and Replace U.S. Networks that Use Chinese Equipment in Bipartisan CHIPS and Science Act

WASHINGTON – U.S. Senators Maggie Hassan and Jeanne Shaheen joined a bipartisan group of Senators calling on Senate leadership to close the $3 billion funding shortfall impacting the Secure & Trusted Communications Networks Act’s Reimbursement Program. The shortfall leaves wireless networks—often in rural areas—vulnerable to espionage or disruption.

Due to security concerns, in 2020 the FCC prohibited the purchase of equipment manufactured by Chinese telecom companies Huawei and ZTE and also prohibited the use of FCC-administered funds to expand or maintain networks with Huawei or ZTE equipment already present.

The reimbursement program helps small telecommunications providers remove and replace suspect Chinese network equipment manufactured by Huawei and ZTE. If the funding shortfall for the program is not closed, the FCC will not be able to fully cover the costs of removing, disposing, and replacing suspect network equipment, which will leave U.S. wireless networks vulnerable to espionage and disruption.

“The highest priority class of telecommunications providers in the Reimbursement Program serve the most rural areas of the United States where wireless connectivity is a vital lifeline to accessing telehealth services, receiving emergency notifications, and participating in the 21st century economy,” wrote the Senators.

Senator Hassan is working across the aisle to address the national security and economic threat posed by the Chinese government, and earlier this summer she worked with her colleagues to pass into law the bipartisan CHIPS and Science Act, which included $1.5 billion to strengthen telecommunication technology research and development here at home, so we can install our own technology instead of using Chinese technology in telecommunications networks. The President also previously signed into law the Secure Equipment Act of 2021, a bipartisan bill cosponsored by Senator Hassan, which directs the FCC to close a loophole to better prevent telecommunications equipment manufactured and sold by companies that pose a national security threat from being deployed in the United States.

As Chair of the Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies, Shaheen has also long advocated for serious investments in scientific and technology innovation to protect the U.S.’s global leadership and national security against China. Shaheen is the co-author of the Transatlantic Telecommunication Security Act (TTSA), which would strengthen European telecommunications infrastructure and counter China’s influence by helping key allies in the region build 5G networks.

Text of the letter is available here and below.

Dear Leader Schumer and Leader McConnell,

We write to express our support for the Federal Communication Commission’s (FCC) Reimbursement Program under the Secure and Trusted Communications Networks Act (Secure Networks Act). The program’s success is critical to maintaining network resiliency in Rural America and our national security. Since the Secure Networks Act was signed into law in 2020, Congress has appropriated $1.9 billion to support the FCC’s ongoing implementation of the Secure Networks Act and the establishment of the Reimbursement Program to reimburse eligible small and rural telecommunications providers for costs associated with removing, destroying, and replacing “threats to the security of our nation’s communications networks posed by certain communications equipment providers.”

On February 4, 2022, the FCC announced providers, using guidance provided by the FCC, had requested close to $5.6 billion to remove and replace equipment in their networks—nearly three times more than a previous projection for the Reimbursement Program and creating a significant financial shortfall of $3.7 billion. On July 15, 2022, the FCC informed Congress that following an extensive review of applications submitted under the Reimbursement Program, the amount of supplemental funding needed to fully fund approved cost estimates is $3.08 billion. Pursuant to the Secure Networks Act, a funding shortfall requires the FCC issue a pro-rated reimbursement to eligible telecommunications providers—resulting in only 39.5% of funding for approved costs allocated for reimbursement.

The highest priority class of telecommunications providers in the Reimbursement Program serve the most rural areas of the United States where wireless connectivity is a vital lifeline to accessing telehealth services, receiving emergency notifications, and participating in the 21st century economy. Due to significant national security risks to U.S. communications infrastructure, the FCC has already prohibited monies from the Universal Service Fund (USF) from supporting the maintenance or expansion of any wireless network that has covered equipment from Huawei and ZTE present. While these actions are necessary, small rural wireless telecommunications providers rely upon USF funds, and rural America faces a perilous situation. Currently, rural wireless carriers may not maintain, service, or upgrade networks with USF with Huawei and ZTE equipment still present. We are jeopardizing vital communications networks nationwide and our national security.

Recognizing the importance of a well-resourced Reimbursement Program to maintaining critical telecommunications service in rural communities, we are committed to working with you on legislative solutions to promptly provide the financial resources necessary to mitigate national security vulnerabilities emanating from network equipment manufactured by untrusted companies such as Huawei Technologies and ZTE Corporation.

Thank you for your attention to this urgent matter. We look forward to working with you to find a swift solution.