FCC to toughen licensing of international carriers

FCC to toughen licensing of international carriers

Los Angeles, CA, USA - May 13, 2022: Homepage of the Federal Com

The US is to overhaul the way it regulates foreign operators, toughening up the rules affecting all international carriers.

The Federal Communications Commission (FCC) has published details of its plans in a 110-page document, to which it requires initial comments by this Thursday.

“The overarching objective of this proceeding is to adopt rule changes that will enable the Commission, in close collaboration with relevant Executive Branch agencies, to better protect telecommunications services and infrastructure in the United States in light of evolving national security, law enforcement, foreign policy, and trade policy risks,” says the document.

First, the FCC is to hold what is effectively a census of all foreign-owned telecoms carriers that have licences under section 214 of the Communications Act of 1934 – which is what governs the FCC.

The FCC calls this “a one-time collection of foreign ownership information”. But it wants each carrier to update the information every 10 years and to inform it of changes, such as ownership, services offered, geographic markets, cyber security provision and whether it uses certain suppliers – likely to be a way or harvesting information on whether a carrier uses equipment from Huawei, ZTE or other provider that the US has doubts about.

It also wants carriers to report relations with foreign network service providers and on cross-border facilities.

At the moment this Notice of Proposed Rulemaking (NPRM) is a draft, but the FCC is moving quickly.

The regulator explicitly draws carriers’ attention to its withdrawal of licences from China Telecom, China Unicom and two companies owned by CITIC – Pacific Networks and ComNet. Separately, the FCC refused a licence to China Mobile in 2019.

The changes will go further than a handful of Chinese operators wanting to offer service in the US. They will affect subsea cable operators, especially those that are jointly owned with non-US carriers, satellite operators, and even such companies as T-Mobile US, whose biggest shareholder in Deutsche Telekom.

But observers commented at the weekend that private equity investors and others investing in US telecoms will also be impacted by this proposed rule-change.

At the same time the FCC is proposing a series of other measures to toughen up the rules on foreign carriers. A licensee may hold only one authorisation at a time “except in certain limited circumstances”.

All new licence-holders must start service within a year of getting section 214 approval. They will have to tell the FCC if they discontinue any service.

And they will have to keep the FCC updated about details of services: “We propose to require authorization holders to provide updated ownership information, cross border facilities information, and other information every three years,” says the regulator.

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