Cable Lobby Seeks FCC Waiver on Foreign Router Ban Amid Supply Chain Woes

The cable industry’s primary lobby group is seeking a waiver of the Federal Communications Commission ban on foreign routers, warning of potential chaos if cable Internet service providers can’t change some of the components in routers they offer to home broadband users.

In March, the FCC added all consumer-grade routers made at least partly outside the US to its Covered List, which imposes restrictions on devices deemed to pose an unacceptable risk to national security. The change affected virtually all consumer routers, preventing new or changed models from being imported into or sold in the US.

In a petition filed on Tuesday, NCTA-The Internet & Television Association asked the FCC to grant an expedited waiver allowing its members’ suppliers to “substitute substrate materials and memory modules in the previously certified routers that are now on the Covered List” as long as the changes “are otherwise consistent” with FCC regulations.

These changes would not alter the functionality of previously authorized devices and would not swap US-produced components for foreign-produced ones, the NCTA said. The component changes are apparently needed to continue production of routers that were approved by the FCC before the Covered List update.

“NCTA requests an expedited grant of this waiver to enable its members and their suppliers to navigate unavoidable supply chain shortages and prevent disruptions in the availability of broadband for NCTA members’ customers, while still fulfilling the rules’ national security and public safety purpose,” the NCTA said. It argued that “good cause exists to prevent disruptions to millions of Americans’ broadband services.”

Memory and substrate shortages

The FCC last month granted a one-year waiver to AT&T’s suppliers, similar to the waiver requested by the NCTA for all cable broadband companies. “NCTA’s suppliers are similarly situated” to AT&T’s, the cable lobby group’s filing said.

While many Internet users buy their own Wi-Fi routers from the vendor of their choice, it’s common for Internet subscribers to use the hardware leased or sold by their broadband provider. The NCTA said that because all consumer-grade routers are now on the FCC’s Covered List, certain “changes are prohibited by the FCC’s rules.”

While the FCC is trying to force companies to move manufacturing to the US, the NCTA said the whole industry is constrained by shortages:

Like AT&T, NCTA members are encouraging their suppliers to quickly pursue required onshoring, and, in the meantime, seek Conditional Approvals for Covered Routers as necessary. However, unavoidable supply chain shortages in critical substrate material and memory modules (including both volatile and nonvolatile memory) significantly constrain the industry. AT&T’s suppliers are not unique; the same impediments they are experiencing impose inevitable limitations on NCTA’s suppliers. Accordingly, NCTA seeks the same relief on behalf of its suppliers. Given the immediacy of these issues and the concrete harms that would result from disruptions to the availability of broadband to large swaths of US consumers and businesses, the grant of this Petition is warranted.

The memory shortage is a well-known problem, and the NCTA said cable firms’ vendors are “facing significant lead-times to find alternatives for memory to use in routers.” The NCTA said its members’ suppliers also “face the repercussions of a global shortage for semiconductor substrates, a critical component for electronic devices.”

NCTA cites “delays and supply chain constraints”

The NCTA explained that “artificial intelligence is driving unprecedented demands for substrate materials, leading to a growing shortage of the necessary materials for semiconductor manufacturing… Persistent industry-wide substrate shortages have caused delays and supply chain constraints, triggered by increased demand and material shortages.”

The FCC last month ruled that existing routers can receive software and firmware updates until at least January 1, 2029. This applies to Class I and Class II “permissive changes,” which are supposed to be minimal compared to Class III changes that face more scrutiny to ensure compliance with FCC rules.

AT&T separately received permission for its suppliers to make Class I and Class II hardware changes, the NCTA said. AT&T’s suppliers may thus “substitute certain substrate components in existing router designs to allow those routers to remain in production,” and “take the steps necessary to swap the memory used in existing designs.”

AT&T pointed out in its successful petition that software and firmware changes “are not the only updates necessary to ensure continued functionality of previously approved devices.” But as of now, “Class I and Class II permissive hardware changes remain prohibited for other providers,” the NCTA said.

FCC router ban adds layer of bureaucracy

Before the FCC added all foreign-made routers to the Covered List, cable companies could make the necessary changes without special permission, the NCTA said:

With respect to permissive changes for routers, alternative sources as well as higher density sources such as 64GB eMMC are generally a pin-to-pin and footprint-compatible replacement for a lower-density part, so it can be placed directly onto the existing routers without other changes to device hardware. Prior to foreign-made routers being added to the Covered List, this change would generally have been classified as a Class I permissive change, as it involves no degradation to device performance and requires no changes to the device or other hardware components. However, NCTA members’ suppliers now cannot pursue these memory changes given the prohibitions of permissive changes for router hardware.

Router makers may seek “conditional approvals” to let them import and sell new models, and must submit a justification for the use of foreign manufacturing and a “detailed, time-bound plan to establish or expand manufacturing in the United States.” The process includes more than just the FCC, as hardware makers must obtain a determination from the Department of Defense or Department of Homeland Security that the router does not pose national security risks.

Netgear and others, such as Amazon’s Eero subsidiary, were quick to apply for and obtain conditional approvals. Chinese companies are expected to have the most trouble obtaining exemptions. The process also applies to foreign-made drones and adds a layer of bureaucracy for hardware makers that want to update existing products or import new models.

The NCTA said the waiver it seeks will prevent problems while cable ISPs and their vendors navigate the process of obtaining company-specific exemptions.

“The targeted waiver requested by NCTA on behalf of its suppliers would allow continued production of existing devices in the near term while members work with their suppliers on Conditional Approval requests, and is intended to prevent sudden and abrupt disruptions that would harm vast swaths of American consumers who are NCTA members’ customers,” the NCTA said.