For decades, parts of the Federal government have examined transactions that introduce and increase foreign investment in United States telecommunications businesses. Transactions that implicate reviews by the Departments of Justice, Defense, and Homeland Security (collectively, “Team Telecom”) and/or by the Committee of Foreign Investment in the United States (“CFIUS”) can face procedural hurdles and delays
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
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
Highlighting recent network security and corporate espionage issues involving foreign-owned carriers, the FCC plans to take the unprecedented step of denying a Chinese telecommunications provider’s application to offer service in the United States based on law enforcement concerns at its next open meeting on May 9, 2019. The agency would conclude that China Mobile USA, a Delaware corporation ultimately owned by the Chinese government, is vulnerable to foreign exploitation that could undermine the security and reliability of U.S. networks. The proposed denial is in line with the 2018 recommendation of the federal agencies commonly known as “Team Telecom,” which represented the first time the group called for the rejection of a carrier’s application due to security risks. The FCC also anticipates freeing up additional spectrum for commercial wireless operations by allowing shared use of the 1675-1680 MHz band currently allocated for federal weather monitoring operations. Rounding out the major actions on the May agenda, the FCC expects to seek comment on the procedures governing its long-awaited auction of “833” toll free numbers, adopt rules aimed at improving the Video Relay Service (“VRS”) used by individuals with hearing or speech disabilities, and propose the regulatory fees for fiscal year 2019.
You will find more details on the significant May meeting items after the break:
As Kelley Drye reported in an earlier post, the Federal Communications Commission (FCC) is moving quickly on efforts to expedite review of certain FCC applications, including, but not limited to, Section 214 and submarine cable-related applications, by the Executive Branch agencies known as Team Telecom. In a May 2016 request to the FCC, the…
The Federal Communications Commission (“Commission” or “FCC”) is looking to jump start the initial steps of the Executive Branch process of reviewing certain applications, including Section 214 and submarine cable-related applications. In a May 2016 request from the National Telecommunications and Information Administration (“NTIA”), NTIA proposed rule changes designed to facilitate more rapid opening stage review by the Executive Branch agencies known as Team Telecom (which includes the Departments of Justice, Homeland Security, Defense, Commerce, State, Federal Bureau of Investigation, and United States Trade Representative) of certain applications. Toward that end, last Friday, the FCC adopted a Notice of Proposed Rulemaking (“NPRM”) soliciting comments on rules to expand the information required when certain applications are filed. The proposed rules would potentially have broad applicability, including some rules extending to applications lacking traditional levels of reportable foreign ownership. Both domestic and international carriers and submarine cable operators should review the NPRM to determine if participation in the proceeding would advance their interests. Comments and reply comments will be due, respectively, within 30 and 45 days of NPRM publication in the Federal Register.
Continue Reading FCC Proposes Rules to Expedite Initial Stages of the Team Telecom Application Review Process
The “Team Telecom” review process of applications involving foreign ownership has long endured a reputation for excessive length and opacity. It appears change may be on the horizon. The National Telecommunications & Information Administration (NTIA) filed a letter (NTIA Letter) on May 10, 2016 with the Federal Communications Commission (FCC or Commission) requesting the Commission require applicants for certain authorizations, including international 214 authorizations and transfers, section 310 license ownership rulings, submarine cable landing licenses and satellite earth station authorizations, submit additional information and certifications with their applications. NTIA asserts that submitting this information and certifications upfront will streamline the Executive Branch agency review process. Today, those reviews are undertaken by the Departments of Justice, Homeland Security, Defense, Commerce, State, Federal Bureau of Investigation, and United States Trade Representative (Team Telecom).
In response to the NTIA Letter, the Commission released a Public Notice late last week seeking comments on NTIA’s request. The Commission suggested that any comments received would inform the Commission’s planned formal rulemaking proceeding. The FCC seeks comments on or before Monday, May 23, 2016.
On October 1, Chairman Wheeler announced that he has circulated a Notice of Proposed Rulemaking among his fellow Commissioners that would seek comment on simplifying the FCC’s foreign ownership approval process for broadcast licensees “by extending the streamlining rules and procedures that currently apply to other classes of licensees to broadcast licensees.” Certainly, the broadcasting community would welcome an updating of the filing and approval process to allow FCC review of applications to proceed on a more streamlined basis. But, unfortunately, FCC review is only part of the story when there is foreign ownership, and it is quite often the smaller part for many FCC authorization holders, which frustrates, at the end of the day, the Chairman’s goal of better adapting the filing and review process to the current business environment.
Continue Reading O’Rielly Paints Team Telecom As an “Inextricable Black Hole” for Applicants, but Will His Call for Reform Fare Better?