CBO Scores the US 5G Leadership Act of 2019

The US 5G Leadership Act of 2019 (S 1625) would establish a program, administered by the Federal Communications Commission (FCC), to reimburse certain US communications providers for the cost of removing and replacing any equipment made by Chinese companies, other companies subject to extrajudicial direction from a foreign government, or entities deemed to pose a national security risk to the US. Under the bill, recipients of federal funding would be prohibited from using US funds to purchase communications equipment from any of those entities.

CBO assumes that S 1625 will be enacted in 2020. CBO estimates that enacting S. 1625 would increase direct spending by $726 million over the 2020-2030 period. In addition, we estimate that spending subject to appropriation would increase by  $30 million over the 2020-2025 period, assuming appropriation of the necessary amounts. S 1625 would authorize the FCC to borrow $700 million from the Treasury to provide reimbursements to some communication providers for the cost of removing and replacing specific equipment. The bill also would authorize the FCC to spend additional amounts from interest credited to unspent balances. CBO estimates that the FCC would accrue $39 million in interest on those balances through 2030; thus, $739 million would be available for reimbursements over the 2020-2030 period. The bill would authorize the FCC to spend up to 2 percent (or $15 million) of available amounts on related administrative costs. CBO estimates that it would cost the FCC $4 million over the 2021-2025 period to issue, update, and enforce reimbursement rules and fulfill other requirements outlined in the bill. Any spending would be subject to the availability of appropriated funds. However, because the FCC is authorized to collect regulatory fees in amounts sufficient to offset its annual appropriation, CBO expects that the net change in discretionary spending by the FCC would be negligible, assuming appropriation action consistent with that authority.