FCC Sets Timelines for Foreign Ownership Reviews

FCC seal
(Image credit: FCC)

The FCC has voted unanimously to take steps to "improve" the foreign ownership review process by which the FCC submits foreign communications outlet ownership proposals to executive branch agencies for national security reviews, a process that has historically been labeled the "team telecom" review.

The FCC billed the changes as improving timeliness and transparency. It came in response to President Trump's executive order on setting timelines for such reviews and rechristening the team telecom the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector.

The committee's aim is to help keep the telecommunications sector secure from foreign threats to national security, including by revoking existing licenses if necessary. The new committee will be chaired by Attorney General William Barr and funded by the Department of Justice.

The FCC's rules in response to the order sets a 120-day time frame for initial reviews, and a possible 90-day extension in some circumstances. It also requires certain certifications from applicants with reportable foreign ownership to protect national security and law enforcement.

The report and order also requires the committee to provide status reports on its reviews to the FCC, makes clearer what applicants need to be referred for a national security review, standardizes review questions, and more.  

The FCC's International Bureau will seek comment on those standardized questions.

FCC commissioner Michael O'Rielly said the item would go a long way to ensuring that applicants get and answer within "a reasonable time frame.

Commissioner Jessica Rosenworcel said the changes "which include strict timeframes and increased clarity about just which applications will be referred to this committee, will improve national security review. They also add much-needed transparency to the process.”

But while she applauded the new rules as progress, she wanted more: "We make a mistake if we stop here," she said. "We should establish a clear standard and process for revoking a foreign carrier’s existing authorizations on national security grounds. Right now we don’t have one and that means are hands are unnecessarily tied when it comes to national security. We also should require periodic review and renewal of foreign carrier’s FCC authorizations.”

FCC commissioner Geoffrey Starks approved the item, but said there is more work to be done on the issue of undersea cables. “While the Commission has been rightfully focused on removing threats within U.S. networks, whether through foreign-made equipment or via authorizations to operate within the United States, we can’t neglect a critical aspect of modern communications that is also subject to the Commission’s oversight -- the international carriage of traffic between the US and the rest of the world via undersea cables...These cables carry 99% of the world’s internet traffic," he said.

“Adversary states like China are seeking to tamper with, block, or access our communications on these cables by routing them through their territories, taking ownership interests, and controlling the companies that manufacture and install them. The FCC and Team Telecom need to work together to ensure that we have sufficient protections, including alternate routes, so we can keep our communications secure.”

FCC chairman Ajit Pai said the vote was a critical milestone, offering much-needed clarity on the rules of the road and fixing a broken review process. He said the U.S. benefits from both foreign and domestic investment and praised the influx of foreign capital, but said it must be balanced with national security, trade policy, foreign policy and law enforcement interests that may be implicated by foreign investment.

He said the FCC rules complement the executive order and provide clear direction to applicants and more efficient and effective reviews. In a press conference following the meeting, Pai said he has been concerned about those cables for a while and he wants to make sure the FCC works with all its partners to secure those undersea infrastructures.

Pai thanked commissioner O'Rielly for pushing for a revise of the team telecom reviews.

“As the Commission rightly scrutinizes certain foreign ownership transactions for national security, law enforcement and trade concerns, today’s action will help provide certainty in the process and appropriately limit regulatory and administrative burdens for run of the mill transactions," said USTelecom in a statement. "This order keeps Team Telecom resources directed squarely on its mission – identifying and evaluating foreign threats to our network services and infrastructure. The Commission should use its discretion to implement its reforms immediately in order to make the review process more efficient for applicants and Team Telecom.”

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.