Sec. 40011. Rescission of amounts appropriated to Public Wireless Supply Chain Innovation Fund | Impact
Legislative and Policy Analysis
Section titled “Legislative and Policy Analysis”Section 40011: Rescission of amounts appropriated to Public Wireless Supply Chain Innovation Fund
Section titled “Section 40011: Rescission of amounts appropriated to Public Wireless Supply Chain Innovation Fund”Executive Summary
Section titled “Executive Summary”Section 40011 permanently rescinds $850 million from unobligated balances previously made available under section 106(a) of the CHIPS Act of 2022 for the Public Wireless Supply Chain Innovation Fund.[1] The affected program is administered by the National Telecommunications and Information Administration within the Department of Commerce and was originally funded as a $1.5 billion, ten-year grant program to support open, interoperable, standards-based radio access network technologies and wireless supply chain resilience.[2]
The section does not repeal the Public Wireless Supply Chain Innovation Fund statute. It does not cancel grants already obligated. It removes $850 million from balances that had not yet been obligated at the time the rescission was executed. The practical effect is to sharply reduce the remaining grant pipeline for future Open RAN, wireless equipment interoperability, testing, commercialization, software, and supply chain innovation awards.
What Section 40011 Actually Does
Section titled “What Section 40011 Actually Does”Section 40011 states that, of the unobligated balances made available under section 106(a) of the CHIPS Act of 2022, $850 million is permanently rescinded.[1] This is a targeted budgetary clawback from money that Congress had previously appropriated for the Public Wireless Supply Chain Innovation Fund.
The original Public Wireless Supply Chain Innovation Fund was funded at $1.5 billion. NTIA describes the program as a ten-year investment intended to advance Open RAN, promote secure and open 5G-plus technologies, support interoperable equipment, enable multi-vendor network integration, and strengthen wireless supply chain resilience.[2]
| Program or activity | Amount | What the money supports |
|---|---|---|
| Original Public Wireless Supply Chain Innovation Fund appropriation under the CHIPS Act of 2022 | $1.5 billion | Competitive NTIA grants for open, interoperable, standards-based wireless network technologies and supply chain resilience |
| Section 40011 rescission | $850 million | Permanent cancellation of unobligated balances from the Innovation Fund |
| Reported NTIA awards as of early 2025 | More than $550 million | Grants already issued by NTIA for Innovation Fund projects, according to the Department of Commerce Office of Inspector General |
| Reported funds left to award as of early 2025 | More than $853 million | Remaining grant pipeline identified by the Department of Commerce Office of Inspector General before this rescission was applied |
The Department of Commerce Office of Inspector General reported that, as of February 25, 2025, NTIA had issued 35 Innovation Fund grants totaling more than $550 million and that more than $853 million in grant funds remained left to award.[3] That remaining-to-award figure closely aligns with the $850 million rescission amount in Section 40011, meaning the section is best understood as eliminating nearly all of the then-remaining unawarded grant capacity rather than merely trimming a small reserve.
Legislative Mechanism
Section titled “Legislative Mechanism”Section 40011 uses a rescission mechanism. A rescission cancels budget authority that Congress previously provided but that has not yet been obligated. Here, the rescission is limited to unobligated balances, so it should not directly cancel valid obligations already made to grant recipients before the rescission took effect.[1]
The section references section 106(a) of the CHIPS Act of 2022, which made the original funding available for the Public Wireless Supply Chain Innovation Fund.[1] The underlying statutory framework for the Innovation Fund is codified in 47 U.S.C. 906, which establishes the fund in the Treasury, makes amounts available to the Secretary of Commerce acting through the NTIA Administrator for competitive grants, and requires annual reporting to Congress for fiscal years in which funds are available.[4]
The important distinction is between authorization, appropriation, obligation, and outlay:
| Budget stage | Meaning here | Effect of Section 40011 |
|---|---|---|
| Authorization | Legal program structure for the Innovation Fund | Not repealed |
| Appropriation | Original $1.5 billion funding provided by the CHIPS Act | Reduced by rescinding unobligated balances |
| Obligation | Grant awards or other legally binding commitments | Existing obligations generally remain intact |
| Outlay | Actual cash disbursement to recipients over time | Future outlays decline because $850 million in budget authority is canceled |
CBO’s enacted-law estimate for Public Law 119-21 identifies Section 40011 as a budget authority reduction of $850 million over the 2025-2034 budget window.[5]
Expenditure Tracking and Reporting Protocol
Section titled “Expenditure Tracking and Reporting Protocol”The financial flow affected by Section 40011 should be tracked through Department of Commerce and NTIA budget execution records, Treasury account reporting, OMB apportionment and budget materials, federal grant award systems, USAspending.gov where award-level data are reported, and oversight reports from the Department of Commerce Office of Inspector General and GAO.
Because this is a rescission of unobligated balances, the most important tracking question is not simply how much was originally appropriated. The key questions are:
- How much of the $1.5 billion had been obligated before the rescission.
- How much remained unobligated when Section 40011 took effect.
- How NTIA adjusted or canceled planned future funding opportunities.
- Whether any remaining unobligated balance survived after the $850 million rescission.
- How existing grants continue to disburse funds over time.
Public visibility is likely to be mixed. Awarded grants should be visible through NTIA announcements, grant records, and USAspending.gov entries, but the exact section-specific unobligated balance may be clearer in agency budget execution and Treasury records than in public-facing grant datasets. Rescissions may appear in Treasury and OMB budget execution materials at the account level, while individual canceled or foregone awards may be harder to isolate publicly.
flowchart TD
A[CHIPS Act funding] --> B[Treasury fund]
B --> C[NTIA]
C --> D[Grant awards]
C --> E[Future grant pipeline]
D --> F[Recipients]
F --> G[Grant reporting]
E --> H[Unobligated balances]
H --> I[Section 40011 rescission]
I --> J[Treasury cancellation]
C --> K[Agency budget execution]
K --> L[OMB and Treasury reporting]
G --> M[USAspending data]
K --> N[OIG and GAO oversight]
L --> O[Congress]
M --> P[Public visibility mixed]
N --> O
The statutory reporting requirement in 47 U.S.C. 906 requires annual reports to Congress describing how and to whom Innovation Fund amounts have been deployed, including recipient ownership information related to women-owned and minority-owned entities.[4] After Section 40011, those reports should still matter for funds that remain obligated or available, but they may no longer show a robust future award pipeline if the rescission removes most remaining balances.
Day-to-Day Government Process Changes
Section titled “Day-to-Day Government Process Changes”For NTIA, the main day-to-day change is that program staff must shift from planning a multi-year grant portfolio around a $1.5 billion fund to managing a much smaller remaining program after the $850 million rescission. That likely changes grant planning, internal budget controls, NOFO design, award timing, stakeholder engagement, and portfolio management.
NTIA had already issued multiple funding opportunities and was evaluating additional applications before the rescission. In May 2025, NTIA reported that more than 90 applications requesting nearly $3 billion had been submitted for the Innovation Fund’s third round and that the agency anticipated making awards later that year.[6] Section 40011 would constrain that pipeline by removing budget authority that otherwise could have supported additional awards.
For Department of Commerce budget officers, the section requires identifying unobligated balances, applying the permanent rescission, adjusting apportionment and allotment controls, and ensuring that no new obligations are made against canceled authority. For grants management staff, it likely means revising award plans, communicating funding constraints to applicants, and monitoring existing awards without the same level of future grant capacity.
For oversight bodies, the section changes the focus from whether NTIA can scale a $1.5 billion ten-year program to whether NTIA can preserve statutory objectives, performance measurement, recipient oversight, and supply chain goals after a major reduction in available funding. The Department of Commerce Office of Inspector General had already found that NTIA needed a stronger plan to ensure the program meets statutory objectives.[3]
Effects on Consumers
Section titled “Effects on Consumers”Section 40011 does not directly change household phone bills or impose new consumer fees. Its consumer effects are indirect and depend on whether reduced federal support slows the development, testing, commercialization, or deployment of open and interoperable wireless network technologies.
The original Innovation Fund was designed in part to promote competition and reduce reliance on concentrated or high-risk wireless equipment supply chains.[2] If fewer grants are available, consumers may see fewer long-term benefits from supplier diversity, network interoperability, and competitive pressure in wireless infrastructure markets. Those effects would not appear immediately on monthly bills, but they could influence long-term network costs, resilience, security, and service innovation.
The consumer impact is therefore best characterized as delayed and indirect. Consumers are unlikely to notice an immediate change, but the rescission may reduce public investment in technologies intended to make wireless networks more competitive, secure, interoperable, and resilient.
Effects on Businesses
Section titled “Effects on Businesses”The business impact is more direct. The Innovation Fund supports companies, universities, labs, consortia, and other entities working on Open RAN, interoperable wireless equipment, testing, integration, software, and deployment readiness. Section 40011 reduces the pool of money available for future awards, which may affect applicants that had planned around later funding rounds.
The most affected businesses include:
| Business group | Likely impact |
|---|---|
| Wireless equipment vendors | Fewer opportunities for federal support for Open RAN and interoperable equipment development |
| Software and systems integration firms | Reduced grant pipeline for network automation, integration, and commercialization work |
| Testing labs and research institutions | Less federal support for testbeds, standards validation, and interoperability testing |
| Smaller and emerging vendors | Potentially greater difficulty competing with incumbent suppliers without grant-backed demonstration opportunities |
| Mobile network operators | Fewer federally supported pilots or tools that could reduce integration risk for multi-vendor networks |
Industry stakeholders warned against rescinding the fund, arguing that it supports wireless supply chain security, next-generation wireless research, and public-private partnerships.[7] Those statements are advocacy positions, but they reflect a real business concern: Section 40011 reduces federal support for a technology ecosystem that had been relying on staged NTIA funding rounds.
Environmental and Climate Impact
Section titled “Environmental and Climate Impact”Section 40011 has no direct environmental permitting, emissions, conservation, land use, or climate program component. It does not directly alter greenhouse gas standards, clean energy incentives, transportation emissions rules, or environmental review requirements.
The indirect environmental effects are uncertain. More open and efficient network architectures could, over time, affect energy use in telecommunications infrastructure, but Section 40011 is not primarily an energy or climate provision. Any climate effect would be secondary to changes in wireless network technology development and deployment.
The most defensible environmental conclusion is that the section has minimal direct climate impact, with possible but uncertain indirect effects if reduced wireless innovation funding slows network modernization, software optimization, or more efficient infrastructure deployment.
Impact Summary
Section titled “Impact Summary”Section 40011 is a large, targeted rescission of federal wireless supply chain innovation funding. It permanently cancels $850 million from unobligated balances of the Public Wireless Supply Chain Innovation Fund, a program originally funded at $1.5 billion.[1][2]
The main policy effect is not the repeal of the Innovation Fund itself. The main effect is the removal of most remaining unawarded grant capacity. Existing obligations should generally continue, but future awards, planned funding rounds, and the broader grant pipeline are substantially constrained.
Consumers may experience only indirect and delayed effects. Businesses, research institutions, testing labs, and emerging wireless vendors face a more immediate reduction in federal support opportunities. For government operations, NTIA must shift from building out a ten-year $1.5 billion grant program to managing a reduced portfolio while preserving oversight, performance measurement, and statutory reporting duties.
Key References and Sourcing
Section titled “Key References and Sourcing”| Source | Relevance |
|---|---|
| One Big Beautiful Bill Act Senate text | Provides the Section 40011 statutory language permanently rescinding $850 million from unobligated balances. |
| NTIA Public Wireless Supply Chain Innovation Fund | Describes the Innovation Fund, original $1.5 billion investment, Open RAN goals, and program objectives. |
| Department of Commerce Office of Inspector General report | Provides oversight findings, award totals, remaining funds left to award, and program planning concerns. |
| 47 U.S.C. 906 | Provides the statutory structure for the Public Wireless Supply Chain Innovation Fund, competitive grants, availability, and annual reporting. |
| CBO estimate for Public Law 119-21 | Provides enacted-law budget context for Public Law 119-21 and identifies budgetary effects for the reconciliation law. |
| NTIA third-round application announcement | Shows the pre-rescission demand for Innovation Fund grants and the pending application pipeline. |
| ATIS statement on proposed rescission | Provides stakeholder perspective from a telecommunications standards and industry organization opposing the rescission. |
[1] Senate Budget Committee, “The One Big Beautiful Bill Act,” Section 40011, lines rescinding $850,000,000 from unobligated balances made available under section 106(a) of the CHIPS Act of 2022, https://www.budget.senate.gov/imo/media/doc/the_one_big_beautiful_bill_act.pdf.
[2] National Telecommunications and Information Administration, “Public Wireless Supply Chain Innovation Fund,” program description of the $1.5 billion Innovation Fund and Open RAN objectives, https://www.ntia.gov/funding-programs/public-wireless-supply-chain-innovation-fund.
[3] U.S. Department of Commerce Office of Inspector General, “NTIA Established the Innovation Fund Program but Needs a Plan to Ensure That the Program Meets Statutory Objectives,” April 9, 2025, reporting 35 grants totaling over $550 million and over $853 million left to award as of February 25, 2025, https://www.oig.doc.gov/wp-content/OIGPublications/OIG-25-017-I_SECURED_Final-Report.pdf.
[4] 47 U.S.C. 906, “Wireless supply chain innovation and multilateral security,” statutory provisions establishing the Public Wireless Supply Chain Innovation Fund, availability, competitive grants, and annual reporting to Congress, https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title47-section906.
[5] Congressional Budget Office, “Estimated Budgetary Effects of Public Law 119-21, to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14, Relative to CBO’s January 2025 Baseline,” July 21, 2025, enacted-law budget estimate and accompanying spreadsheet identifying Section 40011 budget authority effects, https://www.cbo.gov/publication/61570.
[6] National Telecommunications and Information Administration, “More than 90 Applications Requesting Nearly $3 Billion Submitted to Wireless Innovation Fund’s Third Round,” May 8, 2025, https://www.ntia.gov/press-release/2025/more-90-applications-requesting-nearly-3-billion-submitted-wireless-innovation-fund-s-third-round.
[7] ATIS, “ATIS Issues Statement on Proposed Rescission of CHIPS and Science Act Wireless Supply Chain Funds,” June 24, 2025, https://atis.org/press-releases/atis-statement-chips-act-rescission/.