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On November 22, 2019, the Commission adopted a Report and Order, Order, and Further Notice of Proposed Rulemaking, WC Docket No. 18-89, FCC 19-121 (Protecting Against National Security Threats to the Communications Supply Chain Through FCC Programs). The Report and Order prohibits future use of Universal Service Fund (USF) monies to purchase, maintain, improve, modify, obtain, or otherwise support any equipment or services produced or provided by a company that poses a national security threat to the integrity of communications networks or the communications supply chain.

It also initially designated two entities Huawei Technologies Company (Huawei) and ZTE Corporation (ZTE), along with their affiliates, subsidiaries, and parents as covered companies posing such a national security threat. In the Further Notice, the Commission proposed to make the requirement to remove covered equipment and services from carriers’ networks contingent on the availability of a funded reimbursement program, to mitigate the impact on affected entities.

On September 30, 2021, the Commission provided guidance regarding the Secure and Trusted Communications Networks Reimbursement Program disposal and verification requirements and revised the certifications contained in FCC Form 5640.

On July 18, 2022, the Commission announced the grant of applications for the Program and procedures for filing reimbursement claims and adhering to other requirements. Because demand for Program support exceeds available funding, the Secure Networks Act requires that the Bureau implement a prioritization scheme that requires funding to be allocated first to approved applicants that have 2,000,000 or fewer customers (Priority 1).  After review of the submitted applications, the Wireline Competition Bureau has determined that Priority 1 applicants have submitted approximately $4,640,284,672 in cost estimates that are reasonable and supported.  Because available funding is substantially less than that amount, the Commission rules require that allocations to Priority 1 applicants be prorated on an equal basis.  The pro-rata factor applied to those allocations is approximately 39%.  Additional funding made available through denied requests was then distributed to each allocation on a proportional basis, resulting in an adjusted pro-rata factor of approximately 39.5%.