US telecom players balk at foreign ownership reporting proposal

The FCC has proposed new rules that would recertify companies offering telecom services in the US. But several US telecom players aren't very happy with the proposal.

Mike Dano, Editorial Director, 5G & Mobile Strategies

September 11, 2023

4 Min Read
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A wide range of telecom companies and trade associations in the US are opposed to a new FCC proposal that would require regular reassessments of a foreign carrier's regulatory authorization to provide service in the US.

"T-Mobile appreciates the commission's attention to the important public policy considerations underlying this proceeding and supports reasonable efforts to ensure the accuracy of the commission's records. At the same time, however, T-Mobile cautions against enacting new, burdensome, unnecessary and legally vulnerable requirements," the company wrote to the FCC in a recent filing. "

The company's comments are noteworthy, given that Germany's Deutsche Telekom announced earlier this year it is now the majority owner of T-Mobile in the US. That development prompted no additional public reviews or filings, according to T-Mobile officials.

Under current regulations, any company seeking to offer international services originating or terminating in the US must first obtain authorization to do so, per Section 214 of the Communications Act of 1934. Earlier this year, the FCC proposed several changes to that rule, including requiring carriers to renew their authorization every 10 years.

T-Mobile isn't the only company sounding alarms over the proposal.

The FCC is proposing "sweeping, one-size-fits-all reporting and disclosure mandates by which the commission would regularly demand proprietary and confidential details about issues such as data storage, access to stored information, and cross-border facilities (and other matters) from all authorization holders, regardless of whether they pose any articulable risk," Verizon wrote in its own filing. "Such over-inclusive reporting requirements would inevitably yield information in amounts that are vast to the point of being unwieldy, which in many cases would be unrelated to any telecommunications services and thus outside the scope of Section 214 and also devoid of any national security value."

CTIA, the main trade association for big US wireless network operators, warned that aggressive rules in the area could stifle investment.

"Creating such an immense regulatory burden for the communications sector, as proposed, would hinder investment and innovation. This cannot be justified when the commission already has significant capabilities to account for national security considerations," CTIA wrote. "The best course of action is to allow the expert national security agencies to request sensitive data when needed ... instead of adopting the overbroad data collection regime" proposed by the FCC.

Concerns about espionage

The FCC's proposal comes several years after the Commission moved to block Chinese telecom providers including China Mobile, China Telecom, China Unicom and ComNet from operating in the US market. According to the agency, allowing the companies to operate in the US opened up the possibility of Chinese espionage into US telecom networks.

That action followed an earlier block on Chinese equipment vendors like Huawei and ZTE from selling their equipment into the US market.

The Chinese companies have argued that such actions are unwarranted.

Earlier this year, FCC Chairwoman Jessica Rosenworcel said the agency would take another step along this strategic line with a proposal to reevaluate all the foreign telecom companies in the US.

"The grant of authority to operate international communications in the United States is typically a one-and-done activity. In other words, once a commission license is granted, little is done to revisit the authority and safeguard our networks against evolving threats over time," Rosenworcel explained at the time.

She added that the US Senate's Committee on Homeland Security and Government Affairs Permanent Subcommittee on Investigations also recommended requiring some form of regular review of Section 214 authorizations "to account for evolving national security risks."

"This is just the latest step in our comprehensive approach to addressing network security in a modern way," Rosenworcel said. "It is fundamentally a strategy to deter, defend and develop: deter bad actors, defend against untrusted vendors, and develop a market for trustworthy innovation. By doing this, we are working to help improve communications security at home and shine as an example for the rest of the world."

In its lengthy filing on the topic, the FCC estimated that there are around 1,500 active international Section 214 authorization holders in the US today. And the agency calculated that approximately 375 of them have reportable foreign ownership. The agency did not name those 375 entities.

The CCA, a trade association that primarily represents small wireless network operators in the US, took issue with the FCC's proposal.

"This would suggest approximately 1,125 carriers raising little or no policy concern would be subjected to an ongoing renewal requirement. These carriers would be burdened by new regulatory requirements, particularly when they pose minimal risk," the group wrote. "Comprehensive changes to the Section 214 framework are not needed at this time."

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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