At its September 30, 2021, Open Meeting, the Federal Communications Commission (the “FCC” or “Commission”) considered and approved a Second Report and Order that would adopt "Standard Questions," a set of national security and law enforcement questions that applicants with reportable foreign ownership must answer prior to or at the same time they file their applications with the Commission. The Commission developed and put in place these questions to expedite and make more transparent the Executive Branch review of telecommunications ownership for national security and law enforcement concerns (formerly known as the "Team Telecom review"). The new process would replace the current practice whereby the Executive Branch seeks this preliminary information directly from the applicants only after the Commission refers an application. The Standard Questions, while not yet effective, are nonetheless available on the FCC website.1
The adoption of the Standard Questions will complete the Commission's implementation of the November 2020 Executive Branch Review Order,2 which sought to streamline and make more transparent the process for coordinating the effort to review certain telecommunications-related applications with reportable foreign ownership by the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (the Committee).3
The "Standard Questions." Each set of Standard Questions is customized to address information applicable to the specific type of service provided—and there are six types of applications:
- International section 214 authorization applications filed pursuant to 47 CFR § 63.18, including for modification of an existing authorization;
- Applications for an assignment or transfer of control of an international section 214 authorization application filed pursuant to 47 CFR § 63.24;
- Cable landing license applications filed pursuant to 47 CFR § 1.767, including modification of an existing license;
- Applications for assignment or transfer of control of a cable landing license filed pursuant to 47 CFR § 1.767;
- Petitions for declaratory ruling for foreign ownership in a broadcast licensee above the benchmarks set forth in Section 310(b) of the Communications Act (the Act); and
- Petitions for declaratory ruling for foreign ownership in a common carrier wireless or common carrier earth station licensee above the benchmarks in Section 310(b) of the Act.
The Standard Questions seek information regarding applicant operations, applicant services and the type of technology or infrastructure being used, among other areas.
Analysis. The Second Report and Order notes that the Committee has stated a strong preference against negotiating the questions or responses to Standard Questions with applicants before either the Commission referral of an application or the filing of responses with the Committee. This represents a change from the current process. Under the updated procedure, instead of consulting directly with Committee staff, applicants are encouraged to explain in their initial responses the scope of their responses and any limitations. While this modification is intended to streamline the process, the new procedure may actually delay the Committee's ability to undertake a meaningful review of the application at the outset.
The action also illustrates the Commission's ongoing leadership in national security/protection of the supply chain. The Second Report and Order illustrates bipartisan interest in rooting out entities that pose a national security risk. FCC Commissioner Brendan Carr has noted the importance of ensuring that the Commission's equipment authorization identifies and renders ineligible equipment from entities that pose a national security risk. Likewise, FCC Commissioner Geoffrey Starks has called for an inter-FCC task force to establish a uniform process for reviewing national security issues. He suggests that a “whole of the FCC” approach would improve the FCC's abilities.
Finally, as to the practical import, the FCC will issue a public notice announcing the date on which the new Standard Questions will become effective, which we expect will occur sometime between December 2021 and February 2022. Meanwhile, the Standard Questions are publicly available even if not yet effective. We suggest that parties with transactions subject to the FCC’s Second Report and Order give thought as to how to prepare and when to submit applications to the FCC and the Executive Branch to ensure that they are able to benefit from the new procedure.
1 The questions for each type of transaction are provided in Attachments A-F of Appendix C beginning on page 35 of the order.
2 Process Reform for Executive Branch Review of Certain FCC Applications and Petitions Involving Foreign Ownership, IB Docket No. 16-155, Report and Order, 35 FCC Rcd 10927, 10927, ¶ 1 (2020) (Executive Branch Review Order); Erratum (Appendix B – Final Rules), DA 20-1404 (OMD/IB rel. Nov. 27, 2020).
3 Pursuant to Executive Order No. 13913, the Executive Branch agencies on the Committee include the Departments of Justice, Homeland Security, Defense, State and Commerce, as well as the United States Trade Representative.