Last week, the Federal Communications Commission (“FCC”) released an Order and Notice of Proposed Rulemaking (“NPRM”) that could have significant compliance implications for all holders of international Section 214 authority (i.e., authorization to provide telecommunications services from points in the U.S. to points abroad), as well as all entities holding an ownership interest in these carriers. The item requires all holders of international Section 214 authority to respond to a one-time information request concerning their foreign ownership and proposes sweeping changes to the agency’s licensing rules for such licensees.
Although the FCC’s information request may be more relevant in the near term, it is a limited one-time requirement. By contrast, the rule changes on which the FCC seeks comment are far-reaching and, if adopted as written, could result in significant future compliance burdens, both for entities holding international Section 214 authority, as well as the parties holding ownership interests in these entities.
The FCC’s latest actions underscore the agency’s ongoing desire to closely scrutinize foreign ownership and involvement in telecommunications carriers serving the U.S. market, as well as to play a more active role in cybersecurity policy. These developments should be of interest to any carrier that serves the U.S. market and any financial or strategic investor focused on the telecommunications space, as well as other parties interested in national security developments affecting telecommunications infrastructure.