Updated (5/3/2018)
On April 17, the Federal Communications Commission (“FCC”) broke new ground in the agency’s role in national security policy by voting unanimously to approve a Notice of Proposed Rulemaking captioned “Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs” (the “NPRM”). The deadline for filing comments is June 1, 2018, and reply comments are due July 2, 2018.
As the title indicates, the NPRM seeks comment on a framework to reduce supply chain risks for telecommunications equipment and services deployed throughout the country. The item acknowledges a specific role for the FCC in this arena: to ban use of Universal Service Fund (“USF”) subsidies in ways that undermine or pose a threat to national security. In short, the FCC proposes to use the power of the purse—in the case of USF, about $9 billion in subsidies per year—to dissuade companies from using equipment sourced from companies or countries that pose a national security concern.
Although the approach is narrow in scope, in practice the NPRM could produce a final rule that would significantly affect the selections of equipment and services by some USF recipients, particularly rural and smaller providers who reportedly are more likely to have purchased equipment from targeted suppliers. Additionally, as explained below, this proposed rule could affect USF recipients that do not use prohibited equipment and service providers, depending on whether some of their subcontractors use them.
Continue Reading Covington Internet of Things Update: FCC Looks to Bolster the Communications Supply Chain