White House Clarifies and Expands Executive Branch Review of Foreign Participation in FCC Regulated Telecom Services

On Saturday, April 4, 2020, the President issued an Executive Order making changes to the process by which Executive Branch national security, law enforcement, trade and other agencies review FCC applications filed by telecommunications service providers. Significant portions of the Order restate or clarify the current “Team Telecom” review process, the vagueness of which has long been an issue, but there are some significant differences under the new Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (the “Committee”):

• The revised approach applies to existing FCC licenses in addition to applications, allowing review by majority vote of the Committee even in the absence of an application seeking FCC grant of a new license or a transfer or assignment of licenses, or a Section 214 authorization;

• The Order establishes for the first time some timeframes for the federal agencies’ review process, setting a 120-day time limit for “initial review,” a period that commences only after an applicant or licensee has provided all requested information in response to Committee inquiries; there is an additional up-to 90-day review period that is triggered at the end of initial review if the risks cannot be addressed through standard mitigation conditions, as well as additional shorter periods to assess, agree upon and request non-standard mitigation conditions or denial of an application or revocation of a license;

• The Order refers to foreign “participation” in the U.S. Telecom Sector, which appears to establish a broader explicit trigger for review than just foreign investment – extending, for example, to a service provider’s key equipment suppliers (an inquiry which Team Telecom may already undertake in foreign investment reviews);

• The new Committee is structured only to review matters in the Telecommunications Service Sector, which presumably would leave review of foreign investments in broadcast licensees to the existing process; and

• There is a 90-day period initiated by the Order for the Attorney General and Committee members to establish more detailed ground rules under a Memorandum of Understanding, which can be expected to apply to at least some pending applications, as well as those filed in the future.

If you have questions concerning the new review process, please contact any attorney in our office.