CBO Scores the Secure and Trusted Communications Networks Act of 219

The Secure and Trusted Communications Networks Act of 2019 (HR 4998) would establish a program, administered by the Federal Communications Commission, to reimburse certain US communications providers for the cost of removing and replacing equipment or services made or provided by entities, including certain companies based in China, that are deemed to pose a national security risk. The act would prohibit recipients of FCC subsidies from using those funds to purchase, rent, lease, or otherwise obtain communications equipment or services that could threaten national security. The FCC would be required to identify and post lists of prohibited equipment and services on its website.

Using information from the FCC and industry experts, the Congressional Budget Office (CBO) expects that eligible communications providers would request about $800 million in reimbursements over the 2021-2025 period and about $200 million after 2025. In 2021, CBO anticipates, the FCC would issue rules, establish the program, and begin to accept applications; reimbursements would begin in 2022. Some providers would quickly remove and replace covered equipment, but, for technical reasons, others would probably take longer to do so. Over the 2021-2025 period, CBO estimates, the FCC would spend $781 million to establish and administer the program and distribute reimbursements. Such spending would be subject to appropriation of the estimated amounts. However, because the FCC is required to collect regulatory fees in an amount sufficient to offset its annual appropriation, CBO expects that any change in net discretionary spending by the FCC would be negligible, assuming appropriation action consistent with that requirement.