Type: Law Bulletins
Date: 01/25/2023

Team Telecom's Laser-Sharp Focus on China

Team Telecom — known formally as the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (the Committee) — is a U.S. interagency committee tasked with reviewing certain foreign investments to abate any national security risk they pose. Team Telecom often reviews telecommunications license applications filed before the Federal Communications Commission (FCC) by foreign-owned companies that are trying to operate in the United States or are endeavoring to connect the United States to foreign communications networks.

Team Telecom is focused on cybersecurity risks, threats, and vulnerabilities. Composed of the Department of Defense, the Department of Homeland Security, and the Department of Justice; the attorney general chairs Team Telecom. The secretary of state, secretary of the treasury, secretary of commerce, director of the office of management and budget, U.S. trade representative, director of national intelligence, administrator of general services, national security adviser, assistant to the president for economic policy, director of the office of science and technology, and chair of the council of economic advisers serve as advisers to Team Telecom.

Under federal law, the FCC is permitted to prevent common carriers from constructing new or extending preexisting telecommunications networks unless “public convenience and necessity” so “require.”1 The FCC gets to consider factors like national security, foreign policy, trade policy, and so on. Another legal provision entitles the FCC to “withhold or revoke” international submarine landing cable licenses in order to “maintain[] the rights and interests of the United States … or will promote the security of the United States.”2 Team Telecom frequently recommends to the FCC whether to approve the license application in question, reject it, or condition its approval on mitigation measure. Typically, FCC applicants seeking to supply international telecommunications service or submarine landing licenses are referred to Team Telecom if they have 10 percent or greater foreign investment. Additionally, applicants who exceed various FCC foreign ownership metrics are referred to Team Telecom.

On Nov. 30, 2022, Team Telecom recommended to the FCC that it deny ARCOS-1 USA Inc.’s and A.SurNet Inc. subsea cable system’s application to add a new segment directly connected to the United States through a Cuba landing station. This would have been “the only direct, commercial subsea cable connection between the United States and Cuba.” And in Team Telecom’s view, this application “raised national security concerns, as the cable-landing system in Cuba would be owned and controlled by Cuba’s state-owned telecommunications monopoly, Empresa de Telecommunicaciones de Cuba S.A. (ETECSA).” The Cuban state, the Committee feared, “could access sensitive U.S. data traversing the new cable segment through its control of ETECSA.”

Cuba, according to Team Telecom, “has long represented a significant counterintelligence threat to the United States by virtue of its espionage and other intelligence activities targeting the United States.” Thus, “[d]irectly connecting an undersea cable from the United States to Cuba, where a Cuban state-owned company would have exclusive use of the cable, control over that cable’s Cuban landing station, and remote access to traffic on it, could advance the Cuban government’s intelligence objectives by giving it direct access to the U.S. persons’ communications and sensitive data traversing the cable.”

In addition, “traffic destined for places outside Cuba, which otherwise would not traverse Cuban networks, could nonetheless be misrouted by ETECSA or otherwise re-routed over this cable into Cuban territory and the Cuban government’s hands.” And last but not least, Cuba’s friends and allies — China and Russia — were not reassuring to Team Telecom. In Team Telecom’s words, Cuba “could share any information collected from this cable with those foreign adversaries – thereby advancing additional counterintelligence efforts by foreign adversaries against the United States.”

That skepticism towards China has manifested itself in other Team Telecom endeavors too. And it shows no signs of lessening. For instance, last March, adhering to Team Telecom’s recommendation, the FCC revoked ComNet and its parent company Pacific Networks’ domestic authority and ended their international authority to provide telecommunications services.3 The FCC determined that these entities were “subject to exploitation, influence, and control by the Chinese government and are likely to be forced to comply with Chinese government requests without sufficient legal procedures subject to independent judicial oversight.”4 Chinese activities relating to network sabotage had increased significantly, according to the FCC. That being the case, continuing to authorize ComNet and Pacific Networks, the FCC said, would present “significant national security and law enforcement risks … .”5

Along a similar vein, in February 2022, the FCC followed Team Telecom’s recommendation in revoking China Unicom’s domestic and international authority to supply telecommunications services in the United States. The FCC feared that China Unicom was owned and controlled by the Chinese state. The FCC, in April 2020, had given China Unicom a chance to explain its side of the story. Ultimately, the FCC concluded that “the same national security and law enforcement concerns” that bedeviled the federal government in the China Telecom (Americas) Corporation (China Telecom) and China Mobile International (USA) Inc. (China Mobile) cases — there, too, the FCC had revoked and denied, respectively, the entities’ service-provider authorities — apply here.

With respect to China Telecom, notably, Team Telecom had recommended that the FCC revoke and terminate that company’s authorities because of the “substantial and unacceptable national security and law enforcement risks” that its “continued access to U.S. telecommunications infrastructure pursuant to its international Section 214 authorizations” presents.6 Despite the 2007 mitigation agreement between Team Telecom and China Telecom, the Committee deemed that the company had been a difficult partner in the mitigation efforts.7 And the FCC seconded this view because, among other things, China Telecom’s “ownership and control by the Chinese government raise significant national security and law enforcement risks by providing opportunities for [China Telecom] and Chinese state-sponsored actors to access, store, disrupt, and/or misroute US communications, which in turn allow them to engage in espionage and other harmful activities against the United States.”8 Finally, regarding China Mobile, the FCC heeded Team Telecom’s recommendation in denying that company’s application to provide international services because, in the FCC’s determination, China Mobile was “vulnerable to [China’s] exploitation, influence, and control and that [it] would likely comply with espionage and intelligence requests made by the Chinese government.”9

147 U.S.C. § 214(a); see also FCC v. RCA Communications, Inc., 346 U.S. 86, 90 (1953); Policy and Rules Concerning Rates for Competitive Common Carrier Services and Facilities Authorizations Therefor, CC Docket No. 79-252, First Report and Order, 85 FCC 2d 1, 40—44, ¶¶ 117—29 (1980); Streamlining the International Section 214 Authorization Process and Tariff Requirements, IB Docket No. 95-118, Notice of Proposed Rulemaking, 10 FCC Rcd 13477, 13480, ¶ 6 (1995).
247 U.S.C. § 35.
See In the Matter of Pacific Networks Corp. and ComNet (USA) LLC, 2022 FCC LEXIS 1010, at 13 (Mar. 23, 2022).
4Id. at 2.
6In the Matter of China Telecom (Americas) Corporation, 35 FCC Rcd 15006, at 9 (Dec. 14, 2020).
7See id. at 53.
8Id. at 27.
9China Mobile Int’l (USA) Inc., 34 FCC Rcd 3361, at 8.

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