By Lawson Faulkner
On Saturday, top lawmakers from the Senate and House Armed Services committees released a negotiated draft of the National Defense Authorization Act (NDAA) for fiscal year 2025. With American telecommunication security in mind, the proposed bill designates over $3 billion for a so-called “rip and replace” program aimed at removing Chinese-made communications technology that might pose a security threat from U.S. networks.
Rather than tapping taxpayer revenue for this expensive project, lawmakers would grant the FCC authority to resume auctioning spectrum licenses, an authority that has remained in limbo for the past year and a half. This free-market funding solution provides Congress with a unique opportunity to revitalize and secure American telecommunications networks – particularly in rural communities – while expanding access to commercial spectrum that has been hoarded and unused by the federal government.
Lawmakers would be wise to support this provision of the FY 2025 NDAA, which will guarantee the continued strength and security of American networks while safeguarding American taxpayers from the fiscal burden of another ambitious federal project.
Established under the Secure and Trusted Communications Networks Act of 2019, the “rip and replace” program aims to expel telecommunications technologies manufactured by foreign adversaries from American networks. Heeding the warnings of national security experts, the “rip and replace” program has primarily targeted companies with strong ties to the Chinese Communist Party such as Huawei Technologies Co. and ZTE Corp., in an effort to quash American dependence on foreign network software.
These requirements were imposed on American networks after many ISPs, mostly small, rural providers without much capital, had imported inexpensive equipment to build out to rural areas. These are the very kinds of providers that require compensation to comply with the new requirements.
However,, the “rip and replace” program has left several rural American communities in limbo regarding needed updates to local telecommunications networks. In a December letter to Congress, FCC Chair Jessica Rosenworcel explained that underfunding has sparked fears among program participants that “they may need to shut down portions of their networks and withdraw from this process without completing the removal of insecure equipment.” For many rural communities, Chair Rosenworcel warned that “any shutdown of network facilities could remove the only provider available.”
The renewal of FCC spectrum auction authority in the FY 2025 NDAA is a potential solution to this problem. The draft text would enable the FCC to re-auction licenses defunct licenses returned to the commission by Dish Network. These licenses would increase the depth of carriers’ offerings in particular regions rather than allow them to expand national coverage, but the restoration of partial auction authority is nonetheless a step in the right direction for the FCC.
Since 1994, FCC spectrum auctioning has generated more than $230 billion in revenue for the U.S. Treasury. In addition to revenue generation, this competitive bidding system facilitates a meritocratic distribution of spectrum licenses nationally, ensuring that telecommunications networks remain anchored to market principles. Within the FY 2025 NDAA, the FCC would be authorized to borrow up to $3.08 billion from the U.S. Treasury for the continuation of “rip and replace” operations. In contrast to its lucrative fundraising record, FCC licensing of the “AWS-3 bands” should be able to finance this loan handily, ensuring that American taxpayers will enjoy strengthened telecommunications networks at no additional fiscal burden.
Lawmakers should support the renewal of FCC spectrum auction authority in the FY 2025 NDAA, which will safeguard telecommunications networks, expand access to underutilized spectrum resources, and save American taxpayers from bankrolling yet another federal program.
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