The Federal Communication Commission’s “rip-and-replace” program hit a significant filing milestone this week, but wireless industry trade groups argue the multi-billion-dollar program lacks the necessary government funding to reimburse operators, which could impact coverage for millions of Americans.

The program, which is officially known as the Secure and Trusted Communications Networks Reimbursement Program, sprang from the Secure Equipment Act of 2021, which was signed by President Joe Biden late last year. It has earmarked billions of dollars to help operators replace existing network infrastructure from China-based vendors.

The Competitive Carriers Association (CCA), which represents many of the nation’s wireless operators, noted that participating operators were required to submit reimbursement requests by July 17 that, once paid, trigger a one-year deadline for that replacement work to be completed.

However, the program has hit political potholes that have slowed the approval process and left operators holding the money bag.

“Because Congress has not yet fully funded the program, carriers are forced to undertake the endeavor of removing untrusted equipment with 40% of otherwise approved cost estimates to completely remove, replace and destroy this untrusted equipment,” CCA President and CEO Tim Donovan wrote in a statement. “Absent full funding, networks in many rural and sensitive parts of our country are at ever-increasing risk of breaking down and going dark. Because of the funding shortfall, impacted carriers must make decisions to ‘rip’ but not ‘replace,’ including in areas where no other carrier provides service. This dire situation ignores our country’s national security and the connectivity of millions of Americans.”

The FCC’s Wireless Competition Bureau earlier this month submitted a report to Congress highlighting the program’s funding issues. This included comments that reimbursement requests have outrun provided funding and that the program at this point is only funded to provide approximately 40% of reimbursement costs.

“Roughly 39% of recipients indicated in their third status updates that lack of funding continues to be an obstacle to completing the permanent removal, replacement and disposal of the covered communications equipment and services in their networks in their entirety,” the report states.

The Rural Wireless Association (RWA), which represents wireless operators with fewer than 100,000 customers each, noted that through approximately five months, the FCC has only approved reimbursement claims of about $41 million of the $1.85 billion budget.

“While RWA has expressed its appreciation of the FCC’s and Fund Administrator’s efforts to limit waste, fraud and abuse, the seemingly letter-perfect standard for processing invoices has created an imbalance between the processing of invoices and Congress’ mandated one-year completion deadline,” RWA noted in a recent statement.

Broadband connectivity provider Windstream earlier this year noted it tapped into the program to rip out all of the Huawei equipment across its network, which it replaced with new gear from Cisco and Infinera. However, Windstream CTO Art Nichols explained to SDxCentral that the company had only “received a portion of reimbursement funds so far but is in the process of applying for and receiving further reimbursement.”

CCA’s Donovan explained to SDxCentral in an interview that this timing issue is being compounded by broader employment and skills shortages that make it harder for operators to secure the necessary equipment and labor to fulfill build-out obligations.

“If you have crews lined up now and you don't have the funds to continue to work and you let them go, then it's really hard to get those crews back if you don't have that in-house resource,” Donovan said. “The most concerning from continuing to provide coverage in rural America standpoint is if you have to move forward and you don't have confidence that the funding will be available or you can't wait for the funding to be available and you shift to rip-and-destroy only but not replace, not only does that reduce the service but the ‘rip’ piece of rip-and-replace becomes more expensive because if you're fully ripping you have to take down a tower or disconnect backhaul or leave an unsupported site up there, you’ve spent more money on the rip and then you have even less for replacement in other sites. You squeeze the balloon on one side, it’s going to affect the other side.”

Donovan went on to lay blame for this issue at the feet of Congress, noting, “the FCC can't allocate additional funds to it, they have to come from Congress.”

“While there is tremendous, bipartisan, bicameral support for the program and for getting it funded, it still needs to happen,” Donovan said. “And there aren't that many immediate funding vehicles that are coming, even as we hit the one-year deadline to move forward.”

Donovan did note that the FCC could work to provide additional time and waivers to operators that are impacted by the funding shortfall. “That doesn't replace the fact that you need the funding in order to have crews doing the work and moving forward, while at the same time these carriers haven't been able to patch or upgrade, or really work on their networks,” he added.

The FCC had previously reported America’s wireless network infrastructure included at least 24,000 pieces of Huawei or ZTE equipment spanning about 8,400 locations.

In addition to the funding shortfall, there is an ongoing debate over how the funds are being dispersed.

FCC Chairwoman Jessica Rosenworcel said the agency was looking to partner with the National Telecommunications and Information Administration (NTIA) and the $1.5 billion that agency received as part of the CHIPS and Science Act of 2022 to further boost the reimbursement program.

“My hope is we can align their efforts with what we have learned in our existing reimbursement program about real-world deployment and the importance of systems integration,” Rosenworcel said.

The FCC, which saw its authority to conduct spectrum auctions lapse on March 9, is also being stymied by Congress over the agency’s ability to wield authority over spectrum resources. This comes as the broader telecom industry continues to clamor for access to more wireless spectrum to fuel 5G network expansion and prep for 6G work to counter those being offered by China.

In a letter to Congress, FCC commissioners reminded the heads of the House of Representatives’ Committee on Energy and Commerce and the Senate’s Committee on Commerce, Science and Transportation that through the previous 30 years of authority the FCC had in conducting spectrum auctions it opened up deep resources to power nearly ubiquitous cellular coverage and generated more than $233 billion in revenues for the U.S. Treasury.

“As a result, the agency’s auction program has enjoyed strong bipartisan support here at home and our efforts have been a model for regulators worldwide,” the FCC commissioners explained.

That worldview was also noted in terms of the U.S. maintaining its influence and standing in the global technology realm.

“Restoring this authority will provide the United States with the strongest foundation to compete in a global economy, counter Chinese technology leadership ambitions and safeguard our national security,” the FCC wrote.