Protecting the U.S. telecommunications networks from security threats has long been an area of strong agreement at the FCC. Following several actions by the Pai Commission to ban Huawei and ZTE equipment deemed to pose a national security threat, Acting Chairwoman Rosenworcel has continued the effort. Indeed, in February, at the first meeting she led as acting chair, Rosenworcel called on the FCC to “revitalize” its approach to network security “because it is an essential part of our national security, our economic recovery, and our leadership in a post-pandemic world.”

At the FCC Open Meeting on June 17, 2021, the FCC took its most visible step yet toward Acting Chairwoman Rosenworcel’s vision. The Commission adopted a Notice of Proposed Rulemaking (“NPRM”) and Notice of Inquiry (“NOI”) to further address national security threats to communications networks and the supply chain. The NPRM and NOI sets its sights on the Commission’s rules relating to equipment authorization and competitive bidding. The Commission’s proposals have seeds of a much broader focus on Internet of Things (“IoT”) devices, cybersecurity and RF fingerprinting, to name a few. All participants in the telecommunications ecosystem should take notice.


Continue Reading FCC Begins Proceeding to Broaden its National Security Protections Beyond Universal Service Disbursements; IoT, Cybersecurity in its Sights

For years, there have been critiques about the lack of procedures surrounding the review, by a group of Executive Branch agencies commonly referred to as “Team Telecom”, of applications before the Federal Communications Commission (“FCC” or “Commission”) for licenses and transaction approvals involving foreign ownership, including the absence of timeframes for completing reviews. The FCC tried to implement limited changes within its jurisdiction by launching a rulemaking, but that never progressed to a conclusion. Now, by Executive Order (“EO”) on April 4, 2020, President Trump established a framework to govern such reviews and clearly include reviews of existing licenses and authorizations even where there are no current mitigations. There are still a lot of unknowns regarding the new “Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector” (the “Committee”). It is too soon to know whether the Committee will bring a welcome measure of regularity to a previously unshackled process or will prove to be an even greater bane to applicants and licensees than the Team Telecom process its work will replace.

Continue Reading President Formalizes Executive Agency Review of FCC Applications and Licenses; Quick Action on FCC License Revocation

In a strongly worded Report and Order, Further Notice of Proposed Rulemaking, and Order (the “Order”) released on November 26, 2019, the FCC adopted several measures to protect U.S. communications networks from potential national security threats. Likely coming as no surprise to anyone following the proceeding or current news, the FCC identified Huawei Technologies Company (“Huawei”) and ZTE Corporation (“ZTE”), both Chinese telecommunications equipment manufacturers, as national security threats based, in large part, on the companies’ close ties to the Chinese government. Adding to numerous recent federal actions addressing national security concerns, the Order takes three significant steps, within the context of the universal service fund (“USF”) program, to try to mitigate national security threats to the nation’s communications networks.

Continue Reading FCC Prohibits Carriers Receiving USF Support from Using Providers Deemed to Pose a National Security Risk; Further Notice to Explore Using USF to Replace Equipment Already Installed

Last week, the U.S. Bureau of Industry & Security (BIS) added Chinese telecommunications giant Huawei and its non-U.S. affiliates to the U.S. Entity List. The move by the U.S. export control regulator broadly prohibits U.S. and non-U.S. persons from providing the listed Huawei entities with any “items” that are “subject to” BIS’s Export Administration Regulations (EAR).

The sanctions could have a serious impact on Huawei and on companies that supply and do business with the firm. Similar sanctions temporarily imposed on ZTE, another Chinese telecommunications firm, last year were referred to as a “death penalty” ban due to the crippling impact it had on ZTE’s operations.


Continue Reading Department of Commerce Announces New Sanctions on Huawei

The FCC plans to bar a Chinese telecommunications provider from offering international telecommunications service between the United States and foreign points based on national security concerns at its next open meeting scheduled for May 9, 2019. Under a draft Order released last week, the agency would conclude that China Mobile International USA (“China Mobile USA” or the “Company”) is ultimately controlled by the Chinese government and subject to Chinese government exploitation, influence, and control that could undermine the security and reliability of U.S. networks. The denial of China Mobile USA’s application would mark the first time the FCC has rejected an application to access the U.S. market based on national security concerns raised by the group of federal Executive Branch agencies commonly known as “Team Telecom.” The denial also would represent another salvo in the FCC’s recent efforts to combat network security and corporate espionage issues involving foreign-owned carriers. While the proposed action against China Mobile USA likely will not affect foreign carrier investment or access to the U.S. telecommunications market overall, it serves as a reminder of the barriers foreign-owned telecommunications providers (and particularly those with ties to China) may face when dealing with the FCC.

Continue Reading FCC to Deny Chinese Telecom Provider Access to U.S. Market, Citing National Security Concerns

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
Continue Reading U.S. Charges Huawei with Theft of Trade Secrets; Risks for Carriers Using Huawei Equipment Increase