FCC Adopts Rules to Overhaul and Streamline “Team Telecom” National Security Review of Foreign Ownership in U.S. Carriers

On Wednesday, September 30th, the Federal Communications Commission (FCC) unanimously agreed to implement changes to the review process that foreign telecommunications companies undergo before doing business in the USA. The changes, first proposed via an Executive Order on April 4th, formalize and streamline the existing ad hoc system of review.

The DOJ, DHS, and AG – “Team Telecom”– conduct national security reviews of applications for international Section 214 authorizations and evaluated potential impacts on national security before recommending the FCC approve or reject the applications. Until this year, these reviews had taken place without defined guidelines as to what the agencies should look for, or how long the review should last. Under the new system, Team Telecom will operate as the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector, headed by the Attorney General.

Going forward, applicants will submit responses to a “standardized set of national security and law enforcement questions” developed by the Commission’s international bureau. The “Initial Review” of an application will last no more than 120 days, plus an optional 90 day “Secondary Assessment” before producing a recommendation for the FCC. Commission Chairman Ajit Pai announced his expectation that the new system will reduce the average review period from 261 days to 127.

Some Commissioners who supported the reform still have additional concerns about the entrance of foreign telecom companies into the US market and network. Commissioner Jessica Rosenworcel emphasized that “it is not enough to formalize a process for reviewing new foreign ownership at a single point in time” and that the government must monitor these companies even after they have passed through the application process.

Commissioner Geoffrey Starks drew attention to the importance and vulnerability of the undersea cables which make the internet and international communications possible, particularly those which land in “adversary countries” such as China. Relationships between Chinese telecoms and the Chinese government are likely to remain a matter of concern for both the FCC and Team Telecom regardless of the outcome of November’s election.

If you would like to know more about Team Telecom’s new structure and how this might affect your business, please contact Michael P. Donahue at mpd@commlawgroup.com or 703-714-1319.

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