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Supply Chain

Since November 2019, the FCC has taken a number of actions to protect the national security of the United States, the security and safety of United States persons, and the integrity of communications networks or the communications supply chain. The FCC has also implemented the Secure and Trusted Communications Networks Act of 2019.  The FCC’s actions can be found at www.fcc.gov/supplychain.

In November 2019, the FCC released the Supply Chain First Report and Order adopting a rule (47 CFR Section 54.9) which prohibits the use of Universal Service Fund (USF) support to purchase, obtain, maintain, improve, modify, operate, manage, or otherwise support equipment or services produced or provided by companies found to pose a national security threat to the integrity of communications networks or the communications supply chain.

On June 30, 2020, the FCC’s Public Safety and Homeland Security Bureau designated Huawei Technologies Company and ZTE Corporation, and their parents, affiliates, and subsidiaries, as companies that pose such threats, and thus the prohibition against the use of USF support applies to them.

In the Supply Chain Second Report and Order, the FCC adopted a second, additional rule (47 CFR Section 54.10) to implement the Secure and Trusted Communications Networks Act of 2019, which prohibits prospective use of certain federal subsidies, including USF funds, to purchase, rent, lease, or otherwise obtain any covered communications equipment or service, or maintain any covered communications equipment or service previously purchased, rented, leased, or otherwise obtained, identified on the FCC-issued Covered List, released on March 12, 2021 (and updated as needed).

Based on this Covered List, recipients of universal service support may not use federal subsidies, including universal service funds, for telecommunications equipment or video surveillance equipment produced by Huawei, ZTE, Hytera, Hangzhou Hikvision, and Dahua.

Please note: This list is not exhaustive, and it is the responsibility of universal service recipients to stay up-to-date on all covered companies, their parents, affiliates, and subsidiaries.

In short, recipients of USF support may not use USF money to buy new equipment or to support or maintain equipment already in inventory from these companies, their parents, affiliates, and subsidiaries.

Certifications

This spring or summer, USF recipients will certify that they are in compliance with the supply chain rules on universal service program forms. Service providers who participate in multiple USF programs must complete these annual certification(s) for each program (i.e., E-rate, Rural Health Care, High Cost, and Lifeline) in which they participate.

Program Form Due Date
Lifeline FCC Form 481 July 1
High Cost FCC Form 481 July 1
Rural Health Care FCC Form 463 See Invoice USAC*
E-rate FCC Form 473  See FCC Form 473 Filing**

*FCC Form 463 deadline is dependent on funding years and number of years requested.

**A service provider must have a Service Provider Annual Certification (SPAC) Form on file before USAC can pay invoices–FCC Forms 472 (BEAR) and FCC Forms 474 (SPI)–for a funding year.

Service providers: Refer to your invoice deadlines and extension requests for more information on invoice deadlines.

Audits

Beginning this summer, USAC will conduct audits specific to supply chain to determine USF recipients’ compliance with these new rules. These audits are separate from BCAP or PQA reviews. To help USF recipients prepare, USAC will host a series of webinars this spring that will highlight how to prepare for the audit and what to expect if selected. Additionally, USAC will continue to update our website with more information about these audits. Please stay tuned, as we are committed to providing as much detail as we can over the next few months. See our National Supply Chain Audit Strategy.

Program-Specific Certifications

When service providers log in to E-File, they will see this new supply chain certification included in the FCC Form 481 that they must affirm:

  • Section 54.9: I certify under penalty of perjury that no universal service support has been or will be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by any company designated by the Federal Communications Commission as posing a national security threat to the integrity of communications networks or the communications supply chain since the effective date of the designations.

When service providers log in to E-File, they will see these two new supply chain certifications included in the FCC Form 473 that they must affirm:

  • Section 54.9: I certify that no universal service support has been or will be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by any company designated by the Federal Communications Commission as posing a national security threat to the integrity of communications networks or the communications supply chain since the effective date of the designations.
  • Section 54.10: I certify that no Federal subsidy made available through a program administered by the Commission that provides funds to be used for the capital expenditures necessary for the provision of advanced communications services has been or will be used to purchase, rent, lease, or otherwise obtain, any covered communications equipment or service, or maintain any covered communications equipment or service previously purchased, rented, leased, or otherwise obtained, as required by 47 C.F.R. § 54.10.

The first certification affirms compliance with the Section 54.9 prohibition on USF support to purchase, obtain, maintain, improve, modify, operate, manage, or otherwise support equipment or services produced or provided by the covered companies.  The second certification affirms compliance with Section 54.10, which prohibits the use of any federal subsidies on any communications equipment and services on the Covered List.

FY2020 Applicants: If you requested services or equipment provided or that contain components of products produced by any of the above-named companies, or any of their parents, affiliates, and subsidiaries in FY2020, you cannot invoice for these funds. Instead, you should immediately request a service substitution prior to invoicing in order to ensure complete program compliance.

FY2021 Applicants: As you proceed with competitive bidding and submitting funding requests forms, please ensure you are not requesting funding for services or equipment from any of the above-named companies or any of their parents, affiliates and subsidiaries. If you have already submitted your funding requests, and it includes services or equipment from these companies or any of their parents, affiliates and subsidiaries, please submit a service substitution via a RAL request in EPC.

After service providers file the FCC Form 473 (with the certifications) a Service Provider Identification Number (SPIN), “2021” will show up in the Service Provider Download Tool and the SPIN Search Tool on the Tools page on the USAC website. As a reminder, service providers who have more than one SPIN must file a separate form for each SPIN.

Service providers who have already filed their SPAC Forms for FY2020 that did not include the certifications will not be required to recertify the form, but these certifications will now be required for service providers who file an FY2020 SPAC Form for the first time. USAC updated the FCC Form 473 User Guide to reflect these changes.

When service providers log in to My Portal beginning April 30, 2021, they will see these two new supply chain certifications included in the FCC Form 463 and Telecom Invoice that they must affirm:

  • Section 54.9: I certify under penalty of perjury that no universal service support has been or will be used to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by any company designated by the Federal Communications Commission as posing a national security threat to the integrity of communications networks or the communications supply chain since the effective date of the designations.
  • Section 54.10: I certify under penalty of perjury that no Federal subsidy made available through a program administered by the Commission that provides funds to be used for the capital expenditures necessary for the provision of advanced communications services has been or will be used to purchase, rent, lease, or otherwise obtain, any covered communications equipment or service, or maintain any covered communications equipment or service previously purchased, rented, leased, or otherwise obtained, as required by 47 C.F.R. § 54.10.

The first certification affirms compliance with the Section 54.9 prohibition on USF support to purchase, obtain, maintain, improve, modify, operate, manage, or otherwise support equipment or services produced or provided by the covered companies.  The second certification affirms compliance with Section 54.10, which prohibits the use of any federal subsidies on any communications equipment and services on the Covered List.

FY2020 Applicants: If you requested services or equipment provided or that contain components of products produced by any of the above-named companies, or any of their parents, affiliates and subsidiaries in FY2020, you cannot invoice for these funds. Instead, you should immediately request a service substitution prior to invoicing in order to ensure complete program compliance.

FY2021 Applicants: As you proceed with competitive bidding and submitting funding requests forms, please ensure you are not requesting funding for services or equipment from any of the above-named companies or any of their parents, affiliates and subsidiaries.

Office Hours

USAC will host an office hours session on supply chain and how it effects service providers. This session will be held Wednesday, May 26, from 1 to 2 p.m. ET.

Service providers will have the opportunity to ask any questions they have that relate to the supply chain certification process.

Please register for the Supply Chain Office Hours session here.

Learn More

To learn more, please reference these relevant FCC orders:

For questions about supply chain or the certification on existing FCC forms, reach out to us using the Contact Us page.