H.R. 2864, Countering CCP Drones Act | Congressional Budget Office

H.R. 2864, Countering CCP Drones Act | Congressional Budget Office

H.R. 2864 would add telecommunications and video equipment and related services from DJI Technologies to the list of communication equipment and services that pose a risk to the national security of the United States. That list is compiled by the Federal Communications Commission (FCC). As a result, recipients of FCC funding would be prohibited from using such funds to purchase or maintain equipment or services from that company. Under current law, the FCC administers the Secure and Trusted Communications Networks Reimbursement Program, which reimburses eligible providers of advanced communications services for the cost of removing, replacing, and disposing of equipment and services from companies on the published list.

Legislative Information

• Available From Congress.gov
   

  HR 2864 Summary

  Here's a summary of the key points of H.R. 2864, the "Countering CCP Drones Act." :
  
  1. Purpose: The bill aims to amend the Secure and Trusted Communications Networks Act of 2019 to add certain equipment and services from DJI Technologies to the list of covered communications equipment or services.
  
  2. Sponsors: The bill was introduced by Ms. Stefanik and Mr. Gallagher, with several additional co-sponsors listed.
  
  3. Main provisions:
     - The bill would add telecommunications or video surveillance equipment produced by Shenzhen Da-Jiang Innovations Sciences and Technologies Company Limited (commonly known as DJI Technologies) or its subsidiaries/affiliates to the covered list.
     - It would also include telecommunications or video surveillance services, including software, provided by DJI Technologies or using their equipment.
  
  4. Legislative process:
     - The bill was referred to the Committee on Energy and Commerce.
     - It was reported with an amendment and committed to the Committee of the Whole House on the State of the Union.
     - The report number is 118-491.
  
  5. Date: The bill was reported on May 7, 2024.
  
  6. Amendments: The document indicates that the original text of the bill as introduced on April 25, 2023, has been struck out and replaced with the new text provided in this version.
  
  This bill essentially seeks to classify DJI Technologies' equipment and services as potential security risks, adding them to a list that restricts their use in certain contexts, particularly those involving federal funding or national security concerns.

   Enforcement Provisions

  Based on the information provided in the documents, the bill itself does not explicitly outline specific enforcement provisions or designate an enforcement body. However, we can infer some aspects of enforcement based on the context and the existing framework of the Secure and Trusted Communications Networks Act of 2019, which this bill aims to amend:
  
  1. Federal Communications Commission (FCC) Role:
     - The FCC is mentioned in the CBO cost estimate as the agency responsible for maintaining the list of communications equipment and services that pose a risk to national security.
     - The FCC would be responsible for updating its rules and the list to include DJI Technologies' equipment and services.
  
  2. Funding Restrictions:
     - The CBO report states that "recipients of FCC funding would be prohibited from using such funds to purchase or maintain equipment or services from that company."
     - This suggests that enforcement would primarily occur through funding restrictions, with the FCC likely overseeing compliance.
  
  3. Existing Program:
     - The bill affects the Secure and Trusted Communications Networks Reimbursement Program, which is administered by the FCC.
     - This program reimburses eligible providers for removing, replacing, and disposing of equipment and services from companies on the published list.
  
  4. Indirect Enforcement:
     - While not explicitly stated, enforcement might also occur indirectly through other federal agencies that rely on the FCC's list for their own procurement and security policies.
  
  5. Potential for Additional Rulemaking:
     - The FCC may need to create or update rules to implement the changes proposed by this bill, which could include more specific enforcement mechanisms.
  
  It's important to note that the full enforcement details are not provided in these excerpts. Typically, such details might be further elaborated in the full text of the bill, in subsequent FCC rulemaking, or in existing statutes and regulations related to the Secure and Trusted Communications Networks Act.
  
  For a complete understanding of the enforcement provisions, it would be advisable to consult the full text of the bill, related FCC regulations, and potentially seek clarification from the bill's sponsors or relevant congressional committees.

  Equipment Replacement Cost

  The CBO cost estimate provides some information about the reimbursement program. Here are the relevant details:
  
  1. Existing Funding Cap:
     - Under current law, the FCC is limited to spending no more than $1.9 billion to administer the Secure and Trusted Communications Networks Reimbursement Program.
  
  2. Current Appropriation:
     - Congress has already appropriated the full $1.9 billion for this purpose.
  
  3. Demand for Reimbursement:
     - The CBO report states that the application period for reimbursements has already closed.
     - Importantly, it notes that "applicants requested more than $1.9 billion in assistance."
  
  4. Impact of H.R. 2864:
     - The CBO anticipates that enacting H.R. 2864 "would not change the amount or timing of reimbursements relative to current law."
  
  5. No Additional Cost Estimated:
     - Because the program is already at its funding cap and the application period has closed, the CBO does not estimate any additional costs for reimbursements as a result of this bill.
  
  In essence, while the total cost of reimbursing providers for removing and replacing equipment is over $1.9 billion based on the requests received, the program is limited to the $1.9 billion already appropriated. The addition of DJI Technologies to the list is not expected to increase this cost, as the funding cap has been reached and the application period has closed.
  
  It's worth noting that this situation suggests the total cost to fully reimburse all eligible providers might be higher than the current $1.9 billion allocation, but the bill does not provide for additional funding to cover those potential extra costs.

  If providers using DJI equipment are required to spend more to replace it, where will the funds come from, and how will enforcement of said replacement be conducted and funded?

  There is a potential gap between the legislation and its implementation. Based on the information provided in the CBO report and the bill summary, there are several important considerations:
  
  1. Funding Gap:
     - The existing $1.9 billion fund is already fully allocated and oversubscribed.
     - There's no provision in this bill for additional funding to cover the costs of replacing DJI equipment.
  
  2. Potential Sources of Funds:
     - Providers may have to bear the cost themselves.
     - They might seek alternative funding sources, such as state or local grants, or private investment.
     - Future legislation could potentially allocate additional funds, but this is not part of the current bill.
  
  3. Enforcement Challenges:
     - The bill doesn't specify an enforcement mechanism for ensuring replacement of DJI equipment.
     - Without additional funding, strict enforcement could place a significant financial burden on providers.
  
  4. Potential Enforcement Approaches:
     - The FCC might implement a grace period for compliance.
     - Enforcement could be tied to future funding eligibility or licensing requirements.
     - There might be a phased approach, prioritizing critical infrastructure or larger providers.
  
  5. Funding for Enforcement:
     - The CBO estimate suggests minimal additional costs for the FCC to update its rules and lists.
     - However, active enforcement (e.g., audits, inspections) would likely require additional funding not addressed in this bill.
  
  6. Unintended Consequences:
     - Without funding, smaller providers or those in underserved areas might struggle to comply, potentially affecting service availability.
  
  This situation underscores a potential disconnect between the policy goal (removing DJI equipment) and the practical means to achieve it. It's possible that these issues would be addressed in subsequent legislation, FCC rulemaking, or through other federal agencies' policies.
  
  For a complete understanding of how these challenges will be addressed, it would be necessary to monitor future developments, including:
  - Any amendments to this bill
  - Subsequent related legislation
  - FCC rulemaking and guidance
  - Statements or clarifications from the bill's sponsors or relevant committees
  
  This gap between mandate and funding highlights the complexity of implementing such security-focused policies in practice.
  

  CBO Report Summary

This document is a Congressional Budget Office (CBO) cost estimate for H.R. 2864, the Countering CCP Drones Act, as reported by the House Committee on Energy and Commerce on May 7, 2024. Here's a summary of the key points:

1. Purpose: The bill would add telecommunications and video equipment and related services from DJI Technologies to the list of communication equipment and services that pose a risk to U.S. national security.

2. Financial Impact:
   - No direct spending or revenue effects from 2024-2034
   - Minimal impact on spending subject to appropriation (less than $500,000)
   - No significant impact on the federal budget in the long term

3. Implementation:
   - The Federal Communications Commission (FCC) would update its rules and list of prohibited equipment and services
   - Recipients of FCC funding would be prohibited from using funds to purchase or maintain equipment or services from DJI Technologies

4. Existing Program:
   - The bill would not change the amount or timing of reimbursements under the existing Secure and Trusted Communications Networks Reimbursement Program

5. Mandates:
   - Potential small increase in private-sector mandate costs due to increased FCC fee collections
   - No intergovernmental mandates

6. Overall Assessment:
   - The CBO estimates that the net cost to implement this bill would be negligible, assuming appropriate actions are taken

The report indicates that the bill would have minimal financial impact and would primarily affect the FCC's regulatory activities and certain private sector entities.