Acting Chairwoman Jessica Rosenworcel has announced that at its next monthly public meeting on June 17, the Federal Communications Commission (“FCC”) will kick off a process to change its equipment authorization rules and competitive bidding procedures to address national security threats.

The draft Notice of Proposed Rulemaking (“NPRM”), released Thursday, proposes changes to the FCC’s rules on equipment authorization that could restrict and revoke the authorization of devices determined to pose a threat to national security—effectively banning them from the U.S. marketplace.  The NPRM also proposes updates that would effectively require parties bidding for spectrum licenses or FCC broadband funding to certify that they will not rely on financial support from entities designated by the FCC as a national security threat.

The FCC, Congress, and the Executive Branch each have adopted strategies designed to protect the supply chain for communications equipment and services from national security threats in recent years.  For example, over the past couple years the FCC has taken steps to prevent recipients of Universal Service Fund (USF) funding (e.g., for building and sustaining broadband networks in rural areas) from using these funds to purchase any equipment or services from suppliers deemed to pose an unacceptable risk to national security or the security and safety of U.S. persons (the “Covered List”).  The current version of the Covered List can be found here.

The NPRM seeks comment on actions that the FCC can take in its equipment authorization program, which currently considers the radiofrequency emissions capability of equipment, to reduce threats to the country’s communications system by equipment included on the Covered List.  Specifically, the NPRM proposes revising Part 2 of the FCC’s equipment authorization rules and procedures to prohibit authorization of “covered” equipment and revoke existing equipment authorizations of “covered” equipment.  This action would represent a substantial expansion of the FCC’s role in national security, enabling the agency to effectively bar certain foreign manufacturers from selling devices and equipment in the U.S. market—regardless of whether the manufacturer relies on U.S. government funding.

The NPRM also requests comment on whether parties that seek to bid for spectrum licenses or broadband funding in the FCC’s “competitive bidding” process should be required to certify that their bids do not, and will not, depend on the financial support of an entity that the FCC has designated as a national security threat to the integrity of the communications networks or supply chain.  The NPRM asks commenters to consider whether such support could influence the applicant or impact auction outcomes in ways that pose risks to national security.

The FCC also released a draft Notice of Inquiry (“NOI”) requesting comment on how it can use its equipment authorization program to incentivize manufacturers who are building devices that will connect to U.S. networks to consider cybersecurity standards and guidelines.  In particular, the FCC seeks comment on whether it should encourage manufacturers of Internet of Things (IoT) devices to follow the guidance of the NIST IoT Report as a standard.  The NOI would not directly lead to new rules, but it could generate ideas that would inform a future, formal rule proposal in this area.  Given that any such future rules would apply to all device manufacturers and not just those developed by parties deemed to pose a security threat, the adoption of the NOI in June would be a notable step.

The FCC will vote on the draft NPRM and NOI at its June 2021 open meeting.