Last week, Chairwoman Jessica Rosenworcel of the Federal Communications Commission (FCC) announced that she expects to circulate a proposal shortly that will authorize the FCC and/or certain national security agencies to periodically evaluate the foreign ownership of FCC licensees in light of national security considerations. She made this announcement in a speech that focused on security at the Center for Strategic and International Studies in Washington, D.C.
Today, the FCC and a group of national security agencies review the foreign ownership of FCC licensees only when licenses are first sought, or when transfers of control or assignments of those licenses are proposed. The perceived shortcomings of this approach arose recently in connection with the FCC’s review of certain China state-owned enterprise Section 214 licensees. That review, which was initiated in 2019, ultimately resulted in the revocation of those licenses. But, notably, most of the licensees involved in that action did not have a license transaction or application pending before the agency, and the FCC lacked clear procedures for evaluating foreign ownership and national security considerations outside of those contexts. Chairwoman Rosenworcel’s proposal presumably is intended to address this.
What Chairwoman Rosenworcel will propose is notable because it could affect an existing licensee’s ability to bring on foreign investors that do not otherwise trigger a transfer of control. It also could subject licensees to evolving thinking by national security agencies about which foreign owners and investors will trigger national security concerns – thinking that the agencies presumably will be able to act on more quickly under new rules.
Although Chairwoman Rosenworcel made her proposal in the context of Section 214 licensees, it is not clear whether her proposal will be limited to on these types of licensees or whether it will extend to other types of licensees, too, such as wireless and subsea cable licensees. It also is not clear whether the proposal will be in the form of a Notice of Proposed Rulemaking or Notice of Inquiry, which could affect the timing of any new rules.