International Markets & Team Telecom

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In a move certain to inflame the ongoing trade dispute between the United States and China, Justice Department officials announced criminal charges against Chinese telecommunications equipment manufacturer Huawei, several of its affiliates, and its chief financial officer for alleged theft of trade secrets from U.S. telecommunications providers, bank fraud, obstruction of justice, and other violations. The two indictments issued on January 28, 2019, represent just the latest pushback against foreign telecommunications interests by U.S. officials, citing national security concerns and unfair trade practice claims. The FCC already proposed rule changes last year that would prohibit the use of Universal Service Fund support to purchase equipment or services from foreign companies deemed national security threats, primarily targeting companies from China and Russia. Congress also recently passed legislation prohibiting federal agencies and those working with them from using components provided by Huawei and other Chinese manufacturers. With the Trump Administration reportedly poised to issue an executive order effectively barring American companies from using Chinese-origin equipment in critical telecommunications networks, domestic service providers should keep a close eye on their supply chain security and potential liability when working with foreign entities. A criminal conviction on these charges could lead to broader restrictions on trade in U.S. export-controlled products with the company. Given the presence of encryption in telecom equipment, export controls on such products are relatively widespread…
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International service providers likely celebrated when the Federal Communications Commission (“Commission”) eliminated the annual International Traffic and Revenue reporting requirement last year but may have forgotten about the Commission’s plan to issue targeted data requests, when necessary, to obtain information previously available from the annual report. Well the time has come and the Commission now is collecting the basic data that will allow it to tailor its information requests in the future. As required by Commission rule 63.22, international facilities-based service providers must file with the Commission, by November 14, 2018, lists of U.S.-international routes on which the provider has direct termination arrangements with a foreign carrier in the destination country (Route List).
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Almost six months after releasing its October 2017 Order streamlining, eliminating, and revising certain international reporting requirements, on April 25, 2018, the Federal Communications Commission (“Commission”) published a public notice in the Federal Register announcing that the international reporting rule changes were effective on April 25, 2018.  While, in practice, a Commission rule waiver had the effect of implementing one of the reporting changes, the Commission’s recent Federal Register notice publication establishes the official effective date of the reporting rule changes.  …
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Echoing concerns raised by other parts of the federal government over the past several years, the FCC, at its open meeting on April 17, 2018, adopted a Notice of Proposed Rulemaking (“NPRM”) to consider a rule which would prohibit Universal Service Fund (“USF”) support from being used “to purchase or obtain any equipment or services produced or provided by a company posing a national security threat to the integrity of communications networks or the communications supply chain.”  The NPRM seeks comment on issues such as how such a rule can be implemented and enforced, what types of equipment and services should be covered, and how manufacturers covered by the rule are to be identified and made known to USF recipients.  Although this is only the start of the proceeding, the FCC’s action could have a broad-reaching impact for some communications equipment manufacturers and create potential liabilities for entities participating in any of the federal USF programs.  All companies purchasing equipment from certain countries – principally China and Russia – may be affected, even if they don’t receive federal USF money.
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In 2016, the Federal Communications Commission (“FCC” or “Commission”) initiated a rulemaking proceeding proposing changes to the process of reviewing certain Section 214 and submarine cable landing license applications, conducted by the group of Executive Branch agencies commonly referred to as “Team Telecom.”  That proceeding largely stalled after the comment cycle ended later that year.  However, a Statement issued earlier this week by FCC Commissioner Michael O’Rielly endeavors to reignite movement on the long-pending issue of Team Telecom review process reform.
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In advance of its October 24, 2017 Open Meeting, the Federal Communications Commission (Commission) has released a Draft Report and Order (Draft Order) for Commission consideration that, if adopted, would eliminate the Section 43.62 annual International Traffic and Revenue Report  (International Traffic Report) and streamline the Section 43.62 annual Circuit Capacity Report (Circuit Capacity Report).  As we reported in March, the Commission previously released a notice of proposed rulemaking seeking comments on whether it should retain, modify or eliminate the annual International Traffic Report and Circuit Capacity Report filed by certain providers of international telecommunications.  The Draft Order is not final and may differ from the final item released after the Open Meeting.  However, if the Draft Order is adopted as currently drafted, it could offer some welcome relief for reporting international providers.
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As we reported in an earlier blog post, on May 1, 2017, the Federal Communications Commission’s (Commission) International Bureau (Bureau) issued an Order temporarily waiving the annual Section 43.62 International Traffic and Revenue Reporting (the Traffic and Revenue Report) requirement.  The Traffic and Revenue Report filing, normally due by July 31 each year, is…

World Global ConnectionsBy an International Bureau (Bureau) Order (Order) released yesterday that temporarily waives the International Traffic and Revenue Reporting (the Traffic and Revenue Report) requirement, the Federal Communications Commission (FCC) appears to be moving steadily toward its overhaul of the Section 43.62 international reporting requirements.  As Kelley Drye reported in recent posts (here and here…

World Global ConnectionsAs Kelley Drye reported in a post late last month, the Federal Communications Commission (FCC) is considering eliminating the FCC Rule 43.62(b) annual International Traffic and Revenue reporting obligation and streamlining the Rule 43.62(a) annual Circuit Capacity reporting requirements.  The FCC last overhauled these international reporting requirements a mere four years ago.  The FCC’s…