Rule2021-24944
Process Reform for Executive Branch Review of Certain FCC Applications and Petitions Involving Foreign Ownership
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Published
December 2, 2021
Issuing agencies
Federal Communications Commission
Abstract
This document summarizes the Federal Communications Commission's (Commission) decision in the Second Report and Order in the Process Reform for Executive Branch Review of Certain FCC Applications and Petitions Involving Foreign Ownership proceeding, in which the Commission adopted Standard Questions that certain applicants with reportable foreign ownership will be required to answer as part of the Executive Branch review process of their applications.
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<title>Federal Register, Volume 86 Issue 229 (Thursday, December 2, 2021)</title>
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[Federal Register Volume 86, Number 229 (Thursday, December 2, 2021)]
[Rules and Regulations]
[Pages 68428-68441]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-24944]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1 and 63
[IB Docket No. 16-155; FCC 21-104]
Process Reform for Executive Branch Review of Certain FCC
Applications and Petitions Involving Foreign Ownership
AGENCY: Federal Communications Commission.
ACTION: Final action.
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SUMMARY: This document summarizes the Federal Communications
Commission's (Commission) decision in the Second Report and Order in
the Process Reform for Executive Branch Review of Certain FCC
Applications and Petitions Involving Foreign Ownership proceeding, in
which the Commission adopted Standard Questions that certain applicants
with reportable foreign ownership will be required to answer as part of
the Executive Branch review process of their applications.
DATES: The Commission adopted the Standard Questions on September 30,
2021.
FOR FURTHER INFORMATION CONTACT: Jocelyn Jezierny, International
Bureau, Telecommunications and Analysis Division, at (202) 418-0887 or
<a href="/cdn-cgi/l/email-protection#175d7874727b6e79395d726d7e7265796e5771747439707861"><span class="__cf_email__" data-cfemail="400a2f23252c392e6e0a253a2925322e39002623236e272f36">[email protected]</span></a>. For information regarding the PRA information
collection requirements contained in the PRA, contact Cathy Williams,
Office of the Managing Director, at (202) 418-2918 or
<a href="/cdn-cgi/l/email-protection#7f3c1e0b17065128161313161e120c3f191c1c51181009"><span class="__cf_email__" data-cfemail="521133263a2b7c053b3e3e3b333f21123431317c353d24">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second
Report and Order, FCC 21-104, adopted on September 30, 2021, and
released on October 1, 2021. The full text of this document is
available on the Commission's website at <a href="https://docs.fcc.gov/public/attachments/FCC-21-104A1.pdf">https://docs.fcc.gov/public/attachments/FCC-21-104A1.pdf</a>. To request materials in accessible
formats for people with disabilities, send an email to <a href="/cdn-cgi/l/email-protection#e3a5a0a0d6d3d7a3858080cd848c95"><span class="__cf_email__" data-cfemail="8fc9ccccbabfbbcfe9ececa1e8e0f9">[email protected]</span></a>
or call the Consumer & Governmental Affairs Bureau at (202) 418-0530
(voice), (202) 418-0432 (TTY).
Supplemental Final Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act of 1980, as amended
(RFA), the Commission has prepared a Supplemental Final Regulatory
Flexibility Analysis (Supplemental FRFA) of the possible significant
impact on small entities of the Standard Questions and procedures
addressed in this Second Report and Order.
Congressional Review Act
The Commission will include a copy of this Second Report and Order
in a report to be sent to Congress and the Government Accountability
Office pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).
Synopsis
I. Introduction
1. In this Second Report and Order, we adopt a set of standardized
national security and law enforcement questions (Standard Questions)
that certain applicants and petitioners (together, ``applicants'') with
reportable foreign ownership will be required to answer as part of the
Executive Branch review process of their applications and petitions
(together, ``applications''). In the Executive Branch Review Order, the
Commission adopted rules and procedures to facilitate a more
streamlined and transparent review process for coordinating
applications with the Executive Branch agencies (the Departments of
Justice, Homeland Security, Defense, State, and Commerce, as well as
the United States Trade Representative) for their views on any national
security, law enforcement, foreign policy, or trade policy issues
associated with the foreign ownership of the applicants. The Executive
Branch Review Order also established firm time frames for the Executive
Branch agencies to complete their review consistent with Executive
Order 13913, which established the Committee for the Assessment of
Foreign Participation in the United States Telecommunications Services
Sector (the Committee).\1\ To expedite the national security and law
enforcement review of such applications, applicants must provide their
answers to the Standard Questions directly to the Committee prior to or
at the same time they file their applications with the Commission. This
process would replace the current practice of the Executive Branch
seeking such threshold information directly from the applicants after
the Commission refers the applications.
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\1\ Executive Order No. 13913 of April 4, 2020, Establishing the
Committee for the Assessment of Foreign Participation in the United
States Telecommunications Services Sector, 85 FR 19643, 19643
through 44 (Apr. 8, 2020) (Executive Order 13913) (establishing the
``Committee,'' composed of the Secretary of Defense, the Secretary
of Homeland Security, and the Attorney General of the Department of
Justice, who serves as the Chair, and the head of another executive
department or agency, or any Assistant to the President, as the
President determines appropriate (Members), and also providing for
Advisors, including the Secretary of State, the Secretary of
Commerce, and the United States Trade Representative); id. (stating
that, ``[t]he security, integrity, and availability of United States
telecommunications networks are vital to United States national
security and law enforcement interests'').
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II. Background
2. For over 20 years, the Commission has referred certain
applications that have reportable foreign ownership to the Executive
Branch agencies for their review.\2\ In the Executive Branch Review
Order, the Commission formalized the review process and established
firm time frames for the Executive Branch national security and law
enforcement agencies to complete their review, consistent with
Executive Order 13913 that established the Committee in 2020. The types
of applications the Commission generally refers include applications
for international section 214 authorizations and submarine cable
landing licenses and applications to assign, transfer control or modify
such authorizations and licenses where the applicant has reportable
foreign ownership, and all petitions for section 310(b) foreign
ownership rulings.\3\
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\2\ In adopting rules for foreign carrier entry into the U.S.
telecommunications market over two decades ago in its Foreign
Participation Order, the Commission affirmed that it would consider
national security, law enforcement, foreign policy, and trade policy
concerns in its public interest review of applications for
international section 214 authorizations and submarine cable landing
licenses and petitions for declaratory ruling under section 310(b)
of the Act. Rules and Policies on Foreign Participation in the U.S.
Telecommunications Market; Market Entry and Regulation of Foreign-
Affiliated Entities, IB Docket Nos. 97-142 and 95-22, Report and
Order and Order on Reconsideration, 12 FCC Rcd 23891, 23919,
paragraph 63 (1997) (Foreign Participation Order), recon. denied, 15
FCC Rcd 18158 (2000).
\3\ Process Reform for Executive Branch Review of Certain FCC
Applications and Petitions Involving Foreign Ownership, IB Docket
No. 16-155, Report and Order, 85 FR 76360 (Nov. 27, 2020), 35 FCC
Rcd 10927, 10935-38, paragraphs 24 through 28 (2020) (Executive
Branch Review Order) (setting out which types of applications will
generally be referred to the Executive Branch, but noting the
Commission has the discretion to refer additional types of
applications if we find that the specific circumstances of an
application require the input of the Executive Branch); see also
Erratum (Appendix B--Final Rules), DA 20-1404 (OMD/IB rel. Nov. 27,
2020), 47 CFR 1.40001(a)(1); Numbering Policies for Modern
Communications, WC Docket No. 13-97; Telephone Number Requirements
for IP-Enabled Service Providers, WC Docket No. 07-243;
Implementation of TRACED Act Section 6(a)--Knowledge of Customers by
Entities with Access to Numbering Resources, WC Docket No. 20-67;
Process Reform for Executive Branch Review of Certain FCC
Applications and Petitions Involving Foreign Ownership, IB Docket
No. 16-155, Further Notice of Proposed Rulemaking, FCC 21 through
94, paragraphs 23 through 29 (2021) (seeking comment on referring
certain numbering applications to the Executive Branch). Pursuant to
the new rules, an applicant for an international section 214
authorization or submarine cable license is considered to have
``reportable foreign ownership'' when any foreign owner of the
applicant must be disclosed in the application pursuant to section
63.18(h) of the Commission's rules. 47 CFR 63.18(h); see Erratum, 47
CFR 1.40001(d).
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[[Page 68429]]
3. Among other requirements of the Executive Order, for
applications referred by the Commission, the Committee has 120 days for
initial review, plus an additional 90 days for secondary assessment if
the Committee determines that the risk to national security or law
enforcement interests cannot be mitigated with standard mitigation
measures.\4\ The Executive Order states that the 120-day initial review
period starts when the Chair of the Committee determines that an
applicant has provided complete responses to the Standard Questions.
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\4\ See Executive Order No. 13913, 85 FR at 19645, Sec. 5.
During the initial review or secondary assessment of an application,
``if an applicant fails to respond to any additional requests for
information after the Chair determines the responses are complete,
the Committee may either extend the initial review or secondary
assessment period or make a recommendation to the FCC to dismiss the
application without prejudice.'' Id. at Sec. 5(d).
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4. In the Executive Branch Review Order, the Commission required
(1) international section 214 authorization and submarine cable landing
license applicants with reportable foreign ownership and (2)
petitioners for a foreign ownership ruling under section 310(b) whose
applications are not excluded from routine referral, to provide
specific information regarding ownership, network operations, and other
matters when filing their applications. The Commission adopted the
following five categories of information that will be required by rule
from applicants, but did not adopt the specific questions: (1)
Corporate structure and shareholder information; (2) relationships with
foreign entities; (3) financial condition and circumstances; (4)
compliance with applicable laws and regulations; and (5) business and
operational information, including services to be provided and network
infrastructure. The Commission directed the International Bureau
(Bureau) to develop, solicit comment on, and make publicly available on
the Commission's website the Standard Questions. The Commission also
directed the Bureau to maintain and update the Standard Questions, as
needed. The rules require applicants to submit responses to the
Standard Questions directly to the Committee prior to, or at the same
time as, the filing of certain applications with the Commission.\5\ As
explained in the Executive Branch Review Order, responses to the
Standard Questions are only required to be submitted for applications
that the Commission refers to the Committee. If an application is not
subject to referral, or is subject to one of the exclusion categories
in section 1.40001(a)(2), then the applicant need not submit responses
to the Standard Questions to the Committee.\6\
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\5\ Executive Branch Review Order, 35 FCC Rcd at 10946,
paragraphs 48 through 49; see Erratum, 47 CFR 1.40003(a), 47 CFR
1.767(i), 1.5001(m), 63.18(p) (effective date delayed indefinitely,
see 85 FR 76360, Nov. 27, 2020). Currently, and consistent with the
national security and law enforcement agencies' practice prior to
release of the Executive Branch Review Order, the Committee
generally initiates review of a referred application by sending the
applicant a set of questions seeking further information (that is,
after an application has been filed). The applicant provides answers
to these questions and any follow-up questions directly to the
Committee, without involvement of Commission staff. The Committee
uses the information gathered through the questions to conduct its
review and determine whether it needs to negotiate a mitigation
agreement, which can take the form of a letter of assurances or
national security agreement with the applicant to address potential
national security or law enforcement issues. See Executive Branch
Review Order, 35 FCC Rcd at 10929 through 30, paragraph 5.
\6\ Since the Executive Branch Review Order specifically stated
that applicants whose application comes within the categories of
applications generally excluded from referral will not be required
to submit responses to the Standard Questions, we see no need to
make any changes to address MLB's suggestion that an applicant
submitting an application that fits within the referral exclusion
categories ``should only be required to complete a certification to
that effect and be able to forgo responding to the Standard
Questions.'' See Executive Branch Review Order, 35 FCC Rcd at 10942,
paragraph 40, n.107.
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5. Under the Commission's rules, the Committee has up to 30 days
after the Commission refers an application to send further specifically
tailored questions (Tailored Questions) to an applicant in the event
that additional information is needed to conduct the national security
and law enforcement review of the application. The initial 120-day
review time frame begins when the Committee Chair notifies the
Commission that it has determined that the responses to the national
security and law enforcement questions are complete.\7\
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\7\ 47 CFR 1.40004(e)(1) (``In the event that the Executive
Branch has not transmitted the tailored questions to an applicant
within thirty (30) days of the Commission's referral of an
application, petition, or other filing, the Executive Branch may
request additional time by filing a request in the public record
established in all applicable Commission file numbers and dockets
associated with the application, petition, or other filing. The
Commission, in its discretion, may allow an extension or start the
Executive Branch's 120-day review clock immediately. If the
Commission allows an extension and the Executive Branch does
transmit the tailored questions to the applicant, petitioner, or
other filer within the authorized extension period, the initial 120-
day review period will begin on the date that Executive Branch
determines the applicant's, petitioner's, or other filer's responses
to be complete. If the Executive Branch does not transmit the
tailored questions to the applicant, petitioner, or other filer
within the authorized extension period, the Commission, in its
discretion, may start the initial 120-day review period.'').
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6. Standard Questions Public Notice. On December 30, 2020, the
Bureau released a public notice seeking comment on six separate sets of
Standard Questions and a supplement for the provision of personally
identifiable information (PII), all of which are based on questions
that the Committee currently provides to applicants after our referral
of an application.\8\ Specifically, the Bureau invited comment on
specific suggested changes to language in the questions contained in
the following documents:
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\8\ International Bureau Seeks Comment on Standard Questions for
Applicants Whose Applications Will Be Referred to the Executive
Branch for Review Due to Foreign Ownership, IB Docket No. 16-155,
Public Notice, 35 FCC Rcd 14906 (IB 2020), 86 FR 12312 (Mar. 3,
2021) (Standard Questions Public Notice).
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<bullet> Attachment A--Standard Questions for an International
Section 214 Authorization Application.\9\ Standard Questions for an
international section 214 authorization application filed pursuant to
47 CFR 63.18, including a modification of an existing authorization;
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\9\ Standard Questions Public Notice, Attachment A--Standard
Questions for an International Section 214 Authorization
Application, 35 FCC Rcd at 14911 (Attachment A/International Section
214).
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<bullet> Attachment B--Standard Questions for an Application for
Assignment or Transfer of Control of an International Section 214
Authorization.\10\ Standard Questions for an assignment or transfer of
control of an international section 214 authorization application filed
pursuant to 47 CFR 63.24;
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\10\ Standard Questions Public Notice, Attachment B--Standard
Questions for an Application for an Assignment or Transfer of
Control of an International Section 214 Authorization, 35 FCC Rcd at
14924 (Attachment B/International Section 214 Assignment or
Transfer).
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<bullet> Attachment C--Standard Questions for a Submarine Cable
Landing License Application.\11\ Standard Questions for a cable landing
license application filed pursuant to 47 CFR 1.767 including a
modification of an existing license;
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\11\ Standard Questions Public Notice, Attachment C--Standard
Questions for Submarine Cable Landing License Application, 35 FCC
Rcd at 14938 (Attachment C/Submarine Cable Application).
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<bullet> Attachment D--Standard Questions for an Application for
Assignment or Transfer of Control of a Submarine Cable Landing
License.\12\ Standard
[[Page 68430]]
Questions for an assignment or transfer of control of a cable landing
license application filed pursuant to 47 CFR 1.767;
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\12\ Standard Questions Public Notice, Attachment D--Standard
Questions for an Application for Assignment or Transfer of Control
of a Submarine Cable Landing License, 35 FCC Rcd at 14951
(Attachment D/Submarine Cable Assignment or Transfer).
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<bullet> Attachment E--Standard Questions for a Section 310(b)
Petition for Declaratory Ruling Involving a Broadcast Licensee.\13\
Standard Questions for a petition for declaratory ruling for foreign
ownership in a broadcast licensee above the benchmarks in section
310(b) of the Communications Act (the Act) filed pursuant to 47 CFR
1.5000-1.5004;
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\13\ Standard Questions Public Notice, Attachment E--Standard
Questions for Section 310(b) Petition for Declaratory Ruling
Involving a Broadcast Licensee, 35 FCC Rcd at 14965 (Attachment E/
Broadcast Section 310(b) PDR).
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<bullet> Attachment F--Standard Questions for a Section 310(b)
Petition for Declaratory Ruling Involving a Common Carrier Wireless or
Common Carrier Earth Station Licensee.\14\ Standard Questions for a
petition for declaratory ruling for foreign ownership in a common
carrier wireless or common carrier earth station licensee above the
benchmarks in section 310(b) of the Act filed pursuant to 47 CFR
1.5000-1.5004; and
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\14\ Standard Questions Public Notice, Attachment F--Standard
Questions for Section 310(b) Petition for Declaratory Ruling
Involving a Common Carrier Wireless or Common Carrier Earth Station
Licensee, 35 FCC Rcd at 14979 (Attachment F/Common Carrier Wireless
or Earth Station PDR).
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<bullet> Attachment G--Personally Identifiable Information (PII)
Supplement.\15\ Each set of Standard Questions references a supplement
to assist the Committee in identifying PII.
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\15\ Standard Questions Public Notice, Attachment G--Personally
Identifiable Information (PII) Supplement, 35 FCC Rcd at 14993
(Attachment G/PII).
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III. Discussion
7. Based on the comments in the record, we adopt the Standard
Questions largely as proposed in the Standard Questions Public Notice,
with some important changes to more narrowly tailor and clarify the
instructions and certain questions that will decrease the burdens on
applicants. We find that the Standard Questions--with these changes and
clarified instructions--will ensure that the Committee has the
information it needs to conduct its national security and law
enforcement review, while also addressing concerns raised by commenters
that certain questions were unclear or overly burdensome.
A. Terminology
8. Clarification and Improvement of Definitions. The instructions
section in each questionnaire contains definitions of key terms. The
term ``Corporate Officer'' is defined in all attachments to encompass
``Senior Officers,'' a separately defined term. As proposed, each set
of Standard Questions included a definition of ``Senior Officer,'' but
only Attachment E/Broadcast Section 310(b) PDR included the term
``Senior Vice President'' in the definition as an example of a ``Senior
Officer.'' MLB states that ``the Standard Questions include separate
definitions for `corporate officer,' `senior officer,' and `director,'
even though the questions themselves do not distinguish between these
categories because they seek the same information from all individuals
in these managerial roles.'' With respect to Attachment E/Broadcast
Section 310(b) PDR, NAB states that by only including Senior Vice
President in this attachment's definition of ``Senior Officer,'' it
puts ``an undue and unjustified burden on broadcast petitioners''
because broadcasters assign the title of Senior Vice President to
numerous employees, many of whom have no ability to make executive
decisions at the company level. NAB recommends that the term ``Senior
Officer'' should be limited to those officers who have authority to
make executive decisions at the company level.
9. We agree that the definition of ``Senior Officer'' should be
modified to be consistent across all the Standard Questions.
Specifically, as suggested by NAB, we modify the definition of ``Senior
Officer'' to capture any individual with authority to act on behalf of
the entity, not by an individual's title. In the Standard Questions,
the definition of ``Senior Officer'' is modified to include: ``any
individual that has actual or apparent authority to act on behalf of
the Entity. Depending upon the circumstances, such individuals could
include the Chief Executive Officer, the President, Chief Financial
Officer, Chief Information Officer, Senior Vice President, Chief
Technical Officer, or Chief Operating Officer.''
10. We reject MLB's suggestion to eliminate separate definitions
for ``Remote Access'' and ``Managed Services.'' MLB questions why the
terms ``Remote Access'' and ``Managed Services'' are defined
separately, ``even though these features are functionally identical for
the underlying information sought by the questions.'' MLB suggests
condensing definitions in order to ``lessen the likelihood of confusion
over terms that can be used interchangeably. . . .'' The Standard
Questions define ``Remote Access'' as ``access from a point that is not
physically co-located with the Applicant's network facilities, or that
is not at a point within the Applicant's network.'' The term ``Managed
Services'' is also referred to as ``Enterprise Services'' both of which
are defined as ``the provision of a complete, end-to-end communications
solution to customers.'' While it is possible that there may be
situations in which an applicant's ``Managed Services'' could include
``Remote Access,'' we do not view the terms as synonymous. We therefore
retain the separate definitions of these two terms. For consistency
with the questionnaires, we correct an omission and add the definitions
of ``Remote Access'' and ``Managed Services'' to Attachment F/Common
Carrier Wireless or Earth Station PDR.
11. MLB adds that the terms ``Controlling Interest'' and
``Immediate Owner'' are defined but not used in any questions. Contrary
to MLB's claim, the term ``Controlling Interest'' is used in Attachment
C/Submarine Cable Application, Question 3.\16\ However, after review of
the other questionnaires, we observed that versions of this question
are used in all other attachments without using the term ``Controlling
Interest.'' For clarity and consistency, we modify this question in all
other attachments to add the term ``Controlling Interest.'' We remove
``Immediate Owner'' from the definitions section of all Standard
Questions as that term is not used in any subsequent questions.
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\16\ Attachment C/Submarine Cable Application, Question 3
states: ``Identify each Individual or Entity included as part of the
submarine cable system Applicant, specifically identifying any
foreign Entities or Foreign Government-controlled Entities,
including the Ultimate Parent/Owner of the Applicant and any other
Individuals/Entities holding an Ownership Interest in the chain of
ownership, including a Controlling Interest in the Applicant.''
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12. We also recognize that the Standard Questions used inconsistent
terms, and correct these inadvertent errors in each set of Standard
Questions. For example, we have revised all questionnaires so that they
are consistent in the use of the defined terms ``Ultimate Owner'' and
``Ultimate Parent.'' In addition, questions in the proposed
questionnaires inconsistently asked for information about Corporate
Officers, Senior Officers, and Directors, or occasionally just
Corporate Officers.\17\ We modify the questions
[[Page 68431]]
such that each time a question asks for Corporate Officer information,
the question will include Senior Officers and Directors.
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\17\ For example, compare Attachment A/International Section
214, Question 13, 35 FCC Rcd at 14916 (``Has the Applicant, any
investor with an Ownership Interest in the Applicant, any of its
Corporate Officers, or any associated foreign entities . . . ''),
with Attachment B/International Section 214 Assignment or Transfer,
Question 13, 35 FCC Rcd at 14929 (``Have any of the Relevant Parties
or any of their Corporate Officers, Senior Officers, Directors, or
any associated foreign entities . . . '') (emphases added).
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13. Five Percent (5%) Ownership Interest. We reject comments that
request we modify the definition of ``Ownership Interest.'' Each set of
Standard Questions defines an Owner as ``an Individual or Entity that
holds an Ownership Interest in the Applicant/Licensee'' and an
Ownership Interest in turn is defined as ``a 5% or greater equity (non-
voting) and/or voting interest, whether directly or indirectly held, or
a Controlling Interest in the Applicant, and includes the ownership in
the Ultimate Parent/Owner of the Applicant and any other Entity(ies) in
the chain of ownership. . . .'' Subsequent questions in each
questionnaire seek information, including PII, about applicant owners
and entities with ownership interests (i.e., the 5% or greater interest
holders).
14. MLB, NAB, and USTelecom argue that the Ownership Interest
definition is too expansive and requires applicants to submit
information for owners that have no influence or control over the
applicant, including as insulated interest holders. MLB argues that
``[s]ome of the information, including PII, requested from intermediate
or non-controlling investors should not be required if the applicant
can certify that the intermediate investor is truly passive and has no
ability to control or influence the operations of licensee, as is the
case with limited partners in a private equity fund.'' MLB also
believes that ``[c]ompiling and reviewing this information is a tedious
endeavor that has negligible bearing on the fundamental questions of
foreign ownership, control, and influence analyzed by the Committee.''
USTelecom urges the Commission to ``revise the Standard Questions to
apply only to the Commission's standard 10% ownership interest because
the 5% threshold would sweep in far too many owners, with little
influence per owner, and lead to unnecessary complications, delays and
burdens in responding to the standard questions,'' and adds that
``[l]arge, publicly traded companies may not have the level of
visibility into entities owning 5% stakes that would enable them to
complete the questions as proposed.'' C&B argues for using a 20%
ownership threshold or the ability to appoint Board members as the
basis for defining Relevant Parties. NAB contends that a publicly
traded company should be required to provide only publicly available
information about its shareholders. MLB states that the questions
should be revised to clarify that PII is sought from only those
individuals or entities in the ownership chain with control over the
applicant and who participate in ``operations or decision-making
related to the applicant or the licensee.''
15. The Committee staff, in response, advises that a 5% threshold
is appropriate because in some instances a less-than-ten percent
foreign ownership interest--or a collection of such interests--may pose
a national security or law enforcement risk. The Committee staff adds
that when ownership is widely held, five percent can be a significant
interest and is consistent with requirements imposed by other agencies
such as the Securities and Exchange Commission, which requires
disclosure beyond that threshold. The Committee staff states that a
group of foreign entities or persons, each owning nine percent and
working together, could easily reach a controlling interest in a
company without having to disclose any of their interests to the
Committee for certain FCC application types.\18\ In addition, the
Committee staff states that retaining the current threshold is
particularly important with respect to those foreign entities who have
been identified by the Commission and the Executive Branch as posing a
national security threat.\19\ Finally, the Committee staff adds that
Commission's ownership rules serve their own purpose--for the
Commission's analysis and for its referral threshold--while the
Committee reviews the applications for a different purpose, a
comprehensive national security and law enforcement analysis as
required under Executive Order 13913.
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\18\ FCC Staff/Committee Staff Sept. 7, 2021 Ex Parte Letter at
2, n.6 (citing 31 CFR 800.208(b) (2021) (noting for Committee on
Foreign Investment in the United States (CFIUS) reviews that in
``examining questions of control in situations where more than one
foreign person has an ownership interest in an entity, consideration
will be given to factors such as whether the foreign persons are
related or have formal or informal arrangements to act in
concert''); 31 CFR 800.256(d) (2021) (when determining voting
interests for CFIUS critical technology mandatory declarations,
providing that the individual holdings of multiple foreign persons
who are related or have arrangements to act in concert may be
aggregated)).
\19\ Id. at 2-3, n.7 (citing FCC, List of Equipment and Services
Covered by Section 2 of the Secure Networks Act, Mar. 12, 2021,
<a href="https://www.fcc.gov/supplychain/coveredlist">https://www.fcc.gov/supplychain/coveredlist</a>).
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16. While we recognize that requiring the submission of 5%
ownership information to the Committee is a lower threshold for
information than the 10% ownership threshold generally set out in our
rules, we agree with the Committee staff and reject commenters'
requests to modify the submission of 5% or greater ownership
information or otherwise change the definition to exclude insulated
interests. As indicated by the Committee staff, national security and
law enforcement analysis is separate and apart from the foreign
ownership analysis the Commission conducts under its statutory
authority.\20\ We also take into account the Committee's expertise in
assessing national security and law enforcement concerns and the
importance of collecting this information to assess any national
security or law enforcement risks under Executive Order 13913.
Additionally, consistent with the goal of this proceeding to streamline
and expedite consideration of these applications, we believe that a 5%
or greater bright line rule avoids the kinds of complex case-by-case
inquiries into, for example, the adequacy of insulation criteria that
the Commission conducts for section 310(b) reviews. Given our
experience, this could otherwise result in potentially extensive
Committee delays and may circumvent the Commission's timeframes and
streamlined processing we put in place in the Executive Branch Review
Order. Finally, in our experience, this information has been collected
in the past, and we expect applicants for Commission authorizations and
licenses to be in a position to exercise reasonable diligence in
securing important information from their investors required by the
Commission or the Committee.
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\20\ However, the Commission has employed a 5% ownership
standard in other contexts. For example, section 1.767(h)(2)
requires all entities owning or controlling 5% or greater interest
in a submarine cable system (and using U.S. points of the cable
system) to be applicants for, and licensees on, a cable landing
license. See 47 CFR 1.767(h)(2). In addition, the Commission uses a
5% standard in the foreign ownership review context. See 47 CFR
1.5001(i); Review of Foreign Ownership Policies for Broadcast,
Common Carrier and Aeronautical Radio Licensees under Section
310(b)(4) of the Communications Act of 1934, as Amended, GN Docket
15-236, Report and Order, 31 FCC Rcd 11272, 11284 through 85 & 11293
through 97, paragraphs 22-24 & 44-52 (2016) (2016 Foreign Ownership
Order), pet. for recon. dismissed, 32 FCC Rcd 4780 (2017); Review of
Foreign Ownership Policies for Common Carrier and Aeronautical Radio
Licensees Under Section 310(b)(4) of the Communications Act of 1934,
as Amended, IB Docket 11-133, Second Report and Order, 28 FCC Rcd
5741, 5767-72, paragraphs 47-54 (2013) (2013 Foreign Ownership
Second Report and Order).
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17. Definition of Relevant Parties. We agree that including the
current owners of an international section 214 authorization holder or
cable landing licensee within the definition of ``Relevant Parties''
goes beyond the
[[Page 68432]]
scope of the Committee's current triage questions and serves no
additional purpose. Attachment B/International Section 214 Assignment
or Transfer and Attachment D/Submarine Cable Assignment or Transfer
define ``Relevant Parties'' and use the term in a manner that would
require information from both the current owners and proposed owners of
authorization or license holders. Question 1 in these questionnaires
seeks broad information, such as ownership and PII about all Relevant
Parties. Several commenters urge the Commission to clarify that the
disclosures in these questions do not apply to transferors or
assignors. CTIA indicates that the current triage questions only
request information concerning the ``Prospective Owner(s)/Controller(s)
and Prospective Licensee(s).''
18. We amend Question 1 of the transfer and assignment
questionnaires in Attachments B/International Section 214 Assignment or
Transfer and D/Submarine Cable Assignment or Transfer. The Committee's
national security or law enforcement review is primarily focused on the
buyer or new entity obtaining the authorization or license. We
therefore remove transferors and assignors (the sellers) from the
definition of ``Relevant Parties.'' Accordingly, the term ``Relevant
Parties'' will only include ``the Proposed Authorization Holder(s) of
an international section 214 authorization or the Proposed Licensee(s)
of a cable landing license, and any individual or entity with an
ownership interest in the Proposed Authorization Holder(s) or Proposed
Licensee(s).'' This change focuses the Standard Questions on the
appropriate parties and decreases burdens on the applicants.
19. Domestic Communications Infrastructure. We reject USTelecom's
request to remove Network Operations Center (NOC) facilities from the
definition of ``Domestic Communications Infrastructure.'' USTelecom
notes that Domestic Communications Infrastructure includes any NOC
facilities, and argues this ``is inconsistent with the many cases where
the NOC is placed outside the U.S. (and thus not `domestic.')[.]''
USTelecom ``urge[s] the Commission to remove NOC facilities from the
definition of `Domestic Communications Infrastructure' and address
[sic] as a separate item.'' We disagree. Although a NOC can be located
outside of the United States, a foreign NOC can control an entity's
Domestic Communications Infrastructure, and is therefore appropriately
included within this definition. Information concerning a NOC located
outside the United States, including information regarding the
individuals and entities with access to that NOC, is critical
information to assess the national security and law enforcement
concerns of the foreign NOC. As a result, we reject USTelecom's
suggestion to remove NOC facilities located outside of the United
States from the definition of ``Domestic Communications
Infrastructure,'' or to address NOC facilities as a separate item.
Accordingly, we retain the current definition.
B. Protection of Submitted Information
20. We concur with MLB that all information submitted in response
to the Standard Questions should be treated as business confidential
and protected from disclosure and change the instructions accordingly.
As proposed, the Standard Questions stated that applicants must
``[s]pecifically identify answers or documents for which a claim of
privilege or confidentiality is asserted based on the information
containing trade secrets or commercial or financial information.'' MLB
notes that ``all of the information submitted by applicants to the
Committee should be automatically deemed as business confidential
information and properly exempt from disclosure under FOIA and Section
8 of Executive Order 13913.'' Based on our experience and understanding
of the responses to such questions from the Executive Branch agencies
in the past, we agree that most of the information supplied in response
to the Standard Questions is business confidential as it is ``extremely
sensitive and proprietary.'' Moreover, no commenter opposed MLB's
suggestion. Most importantly, however, the Committee staff--to whom the
information will be submitted--agrees that all responses to the
Standard Questions submitted to the Committee will be treated as
business confidential and the applicant(s) should not have to
specifically identify information for such treatment.\21\ Consequently,
we modify the instructions in all questionnaires to provide that all of
the submitted information will be treated as business confidential and
that applicants will not have to specifically identify information for
such treatment.
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\21\ Information submitted to the Committee may not be shared
except under the terms of Executive Order No. 13913.
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21. We decline, however, to take any specific action with regard to
MLB's request for ``heightened protection'' of PII and restrictions on
sharing it within Committee agencies. The Privacy Act already requires
federal agencies to protect PII \22\ and Executive Order 13913
explicitly addresses this issue, thereby ensuring the Committee
protects this information. In particular, Section 8 of the Executive
Order states that ``[i]nformation submitted to the Committee . . .
shall not be disclosed beyond Committee Member entities and Committee
Advisor entities, except as appropriate and consistent with procedures
governing the handling of classified or otherwise privileged or
protected information . . . .'' Therefore, we do not believe any
additional Commission action is necessary to address this concern.
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\22\ The Privacy Act generally applies to U.S. citizens and
legal permanent residents; however, in 2016 Congress enacted the
Judicial Redress Act of 2015, 5 U.S.C. 552a note, which extends the
right to pursue certain civil remedies under the Privacy Act to
citizens of designated countries or regional economic organizations.
Claims under the Judicial Redress Act are limited to those involving
``covered records,'' defined as a record that is transferred--(A) by
a public authority of, or private entity within, a country or
regional economic organization, or member country of such
organization, which at the time the record is transferred is a
covered country; and (B) to ``a designated Federal agency or
component'' for purposes of preventing, investigating, detecting, or
prosecuting criminal offenses. Id. Sec. 2(h)(4). The Attorney
General is responsible for designating covered countries or regional
economic organizations, as well as federal agencies and components
for purposes of the Judicial Redress Act. Id. Sec. 2(d), (e),
(h)(2), and (h)(5). A list of covered countries is available at 84
FR 3493 (Feb. 12, 2019). A list of designated federal agencies and
components is available at 82 FR 7860 (Jan. 23, 2017) and includes
members of the Committee.
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C. Filings Involving Multiple Applicants
22. Based on comments in the record, we decline to revise and
reorganize the Standard Questions with regard to filings involving
multiple applicants (joint applicants); however, we clarify and improve
the instructions on how applicants can submit joint filings
confidentially. USTelecom urges the Commission to make the
questionnaires clearer so that questions requiring joint responses can
be separated from questions where applicants must respond individually.
CTIA asks that the questions be organized so when there are multiple
applicants they can clearly see which questions can be answered jointly
and which can be separated so sensitive information is not shared.
USTelecom requests removal of questions that ask for a list of all
government customers and descriptions of services. We recognize that
joint applicants have a legitimate interest in preventing the sharing
of certain information and identifying which questions an applicant is
responsible for answering. Consequently, we will
[[Page 68433]]
clarify the instructions in the Standard Questions on how joint
applicants can file confidentially with the Committee, but we will not
reorganize or remove certain questions. This approach is consistent
with the instructions in the proposed questionnaires, which state,
``[i]f there are multiple applicants, each applicant should also
clearly mark any answers or documents that contain sensitive
information that should not be disclosed to the other applicants.''
23. When there are multiple applicants for a single application
(such as consortium applicants for a single submarine cable landing
license), each applicant should (1) provide a clear statement as to how
they have submitted their responses and (2) identify which applicants
have filed jointly and which applicants can view each other's business
confidential information.\23\ For instance, Committee staff recommend
that applicants clearly identify, in headings, the group of applicants
that have filed together, along with a case name and FCC file number,
and suggest that applicants use an applicant-specific identification
system, such as Bates Numbering, along with the identification of the
FCC file number and case/transaction name(s).\24\ We believe that this
approach would alert the Committee staff of which information should
not be shared and should prevent disclosure of customer lists between
joint applicants. We direct the International Bureau to provide, on an
as-needed basis, updated instructions on the Commission's website
regarding coordination of multiple applicant responses and other issues
based on feedback from interested parties.
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\23\ Applicants should provide this information in a cover
letter or email (if responses are submitted electronically).
\24\ The Committee staff indicated that if co-applicants decide
to submit separate Standard Question responses by email, co-
applicants should submit them on the same day, so the Committee may
easily assess if all expected Standard Question responses for an
application have been submitted.
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D. Cross-Referencing Previously Filed Materials
24. We reject commenters' request that applicants generally be
allowed to cite to previously filed information in their responses to
the Standard Questions rather than resubmit information that was
previously filed with the Commission and that remains unchanged. We
recognize that allowing applicants to cross-reference to previously
filed materials within their responses to questionnaires may ease
certain burdens on the applicants. We believe, however, that permitting
cross references to previously filed materials may delay Committee
staff review of applicants' submissions because Committee staff would
then have to locate materials that were previously filed with respect
to a different application. Accordingly, we require applicants to
provide full and complete responses to the Standard Questions in a
complete, self-contained document (or documents). This approach is
consistent with Commission staff practice for applications, and it
benefits applicants by focusing Committee staff resources on the review
of applicants' responses to the Standard Questions. We will, however,
allow internal cross-referencing of responses within a single document
to streamline the process for applicants. For example, if an applicant
provided a response to Question 15, and the applicant's response to
Question 27 contains the same information, the applicant may refer back
to its earlier response.
25. We also reject NAB's specific request that, for petitioners
that have previously been granted a declaratory ruling approving
foreign investment, the petitioner be permitted to respond to a
streamlined questionnaire that only seeks information on that new
investor, rather than having to complete the questionnaire with respect
to all Relevant Parties. We decline this request and note that we
continue to require petitioners to provide a full and complete Petition
for Declaratory Ruling to the Commission, and we similarly require
petitioners to submit full and complete responses to the Standard
Questions to the Committee. The Committee needs information regarding
all owners to conduct its review, including updated information, just
as the Commission requires a complete petition with information on all
owners, not just the new investors, when reviewing the petition.
Consequently, the responses must include the requested information with
respect to all Relevant Parties as defined by the Questionnaires.
E. Relationships With Foreign Individuals or Entities
26. Retain ``Prior Relationship'' in Attachment E/Broadcast Section
310(b) PDR and Remove it from Attachment F/Common Carrier Wireless or
Earth Station PDR. We reject NAB's recommendation ``to eliminate prior
relationships'' from Question 3 in Attachment E/Broadcast Section
310(b) PDR, or to ``establish a defined `look-back' period of six
months prior to the date a Section 310(b) petition is filed.'' We will
retain the request for information concerning broadcast petitioners'
prior relationships, with no time limit or ``defined look-back
period,'' as Committee staff advise that this information is necessary
for staff's national security and law enforcement review of broadcast
applications.\25\ Specifically, Committee staff states that this
information may identify situations where past agency relationships
with foreign principals, such as funding or employment arrangements,
may be relevant to an assessment of continuing foreign influence over
broadcast content. We note that the legislative history of Section
310(b) reflects particular concern regarding foreign influence over
broadcast licensees. However, Commission staff unintentionally added
language regarding prior relationships to Attachment F, Question 3.
Because Committee staff expresses a particular interest in prior
foreign relationships only with regard to broadcasters, we remove the
prior relationship language from Attachment F.
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\25\ Committee staff also indicated that this information helps
the Committee evaluate foreign influence concerns related to the
Foreign Agents Registration Act (FARA), 22 U.S.C. 611 et seq., that
are specific to broadcasters.
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27. Modify and Clarify ``Planned'' Relationships in Attachments A-
F. We agree with commenters that the question asking if applicants have
``planned'' relationships with certain foreign individuals and entities
can be improved, and we clarify this in each set of Standard Questions.
MLB argues that what constitutes a ``relationship'' outside of funding
or a contract is unclear and argues that there should be a timeframe
associated with the question. C&B proposes that the question should be
limited to relationships that confer foreign government influence over
the applicant's operations. C&B also asserts that the question should
exclude subscribers to the applicant's service and foreign employees of
the applicant who are covered in another question.
28. We clarify that ``planned relationships'' are ``current
relationships or those reasonably anticipated by negotiations or that
are identified under current business plans'' and clarify that this
includes any situations in which contracts have been signed or where
the parties are already in negotiations. We decline to place a time
limit on this question, as this question should capture any reasonably
anticipated future foreign relationships regardless of the timeframe.
We find that this change will clarify for applicants the scope of
reportable foreign relationships and will improve and facilitate
Committee review of applicants' responses to the Standard Questions.
[[Page 68434]]
29. Clarify Foreign Relationships Do Not Include Customers. As
requested by C&B, we clarify that existing or planned relationships/
partnerships, and prior relationships/partnerships in the case of
broadcast applicants, and funding or service contracts, do not include
foreign subscribers to an applicant's retail services. We also clarify
that, for the purposes of this question, these relationships do not
include foreign employees who are identified in other questions, such
as Senior Officers and Directors, and Non-U.S. Individuals with
physical access to certain facilities, records, networks, or electronic
interfaces.\26\ We decline, however, C&B's request to limit the
question to only relationships with foreign governments or foreign
government owned entities, as foreign individuals and entities also may
raise national security and law enforcement concerns.
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\26\ In their responses to the foreign relationship questions,
applicants may want to consider cross-referencing their response to
these other foreign employee questions to aid the Committee in its
review.
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30. Limit the Use of ``Foreign Party'' in Attachment E/Broadcast
Section 310(b) PDR. As proposed, the Standard Questions ask if the
Applicant or ``Relevant Parties'' have ``existing (or planned)
relationships'' with any foreign Individuals, foreign companies,
Foreign Governments, and/or any Foreign Government-controlled companies
or entities but only Attachment E/Broadcast Section 310(b) PDR
``contains an expansive definition of `Foreign Party' in Question 3 and
incorporates this term in numerous subsequent questions.'' NAB argues
that the inclusion of Foreign Party in the questions requires
broadcasters to gather extensive information on each Foreign Party even
if that party has a limited relationship with the applicant, ``such as
a one-time agreement for access to a location for the production of a
single program.'' NAB expresses concern about the burden imposed on
broadcaster petitioners by the expanded scope of the Standard
Questions.
31. We recognize that the broadcaster questionnaire alone seeks
detailed information about relationships with Foreign Parties.
Committee staff explain that questions 13-17 in Attachment E/Broadcast
Section 310(b) PDR are designed to identify situations in which the
applicant may be acting as an agent for a foreign principal and are
directly related to Committee concerns under FARA. As recommended by
Committee staff, we retain the Foreign Parties information requirement
in questions 13-17. However, since the Committee staff do not identify
the need for such information in connection with the remaining
questions, we conclude the burden of producing Foreign Party
information in other questions asked in Attachment E/Broadcast Section
310(b) PDR outweighs the benefit of this information to the Committee.
Therefore, we remove the reference to ``Foreign Party'' in certain
questions of Attachment E/Broadcast Section 310(b) PDR.\27\
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\27\ Committee staff did not object to the deletion of ``Foreign
Party'' from all other questions in this questionnaire.
Specifically, we remove the reference to ``Foreign Party'' from
questions 12, 18 through 21, 26, 31 through 34 in Attachment E/
Broadcast Section 310(b) PDR.
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F. Background Information Regarding the Applicant(s)
32. Based on the comments in the record, we modify the Standard
Questions to clarify the type of background information applicants
should provide. Currently, each set of proposed Standard Questions
includes several questions regarding the applicant's background and
asks if ``the Applicant, any Corporate Officers, Senior Officers,
Directors, or any Individual/Entity with an Ownership Interest in the
Applicant'' have ``ever been involved or associated with'' a previous
application to the Commission or a previous filing with the Committee
on Foreign Investment in the United States (CFIUS), or if these
individuals or entities have ``ever been convicted of any felony'' or
``been subject to any criminal, administrative, or civil penalties for
imposed for violating the regulations of'' a number of government
agencies.
33. With respect to prior Commission or CFIUS filings, USTelecom is
concerned that the phrase ``involved or associated with'' could include
``any level of activity associated with a filing from corporate officer
responsibilities to more mechanical involvement with accomplishing a
filing, which seems far outside the scope of concern.'' To clarify and
reduce burdens on the applicants, we amend this language to specify
that an ``involved'' or ``associated'' Individual or Entity was either
the Applicant in a prior Commission or CFIUS filing or listed as an
owner in such a prior filing. Modifying the questionnaires accordingly
would focus the inquiry to the parties most relevant to any prior
Commission or CFIUS filings.
34. We decline USTelecom's recommendation that the Commission
provide a two-year time limit for questions concerning previous filings
with the Commission or CFIUS, or that the Commission eliminate this
question with respect to prior Commission applications. We will not
impose any time limit for CFIUS filings as Committee staff state that
all information regarding prior CFIUS filings would be relevant to
their national security and law enforcement review. We find, however,
that we can adopt a ten-year time boundary regarding prior Commission
filings, which the Committee indicated would be acceptable. Although we
agree that imposing a time limit regarding previous Commission filings
is appropriate, we find that USTelecom's proposed two-year limit on
such filings is too short and would likely exclude many relevant
filings and information. The ten-year time limit will reduce the
burdens on the applicant while providing the Committee sufficient
relevant information concerning recent Commission filings it requires
for its review.
35. We are unpersuaded by USTelecom's argument that the questions
regarding criminal, administrative, or civil penalties are ``incredibly
broad . . . and could be extremely burdensome to even attempt to
answer,'' particularly taking into consideration the age of some
communications companies. We therefore reject USTelecom's
recommendation that the Commission set parameters on this question ``by
limiting the ownership interest threshold by 10% and creating a
definitive timeframe of interest, not to exceed two years.'' As we
explained above, we are not increasing the numerical ownership
threshold from 5% or greater to 10% or greater. As to the time frame,
we do not believe it would create an undue burden for applicants to
report as to such serious actions taken against them or their officers,
directors, or attributable owners, as we would expect them to have
records of such actions.\28\ Additionally, Committee staff state that
no time limits can be placed on the reporting period for this inquiry
due to the serious nature of the underlying question, as past felonies
or regulatory violations may be indicative of possible future behavior,
or may give the Committee staff insight on where to focus any
additional questions for the applicant.\29\ We agree with the
[[Page 68435]]
Committee staff's views on this matter and decline to accept
USTelecom's recommendations.
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\28\ To the extent that an applicant is unable to provide a
complete answer as to relevant criminal, administrative, or civil
penalties, as discussed below, it should explain this in its
submission to the Committee.
\29\ The Committee staff added that placing a time limit from
the date of conviction would allow for situations in which an
applicant would not be required to disclose a serious offense.
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G. Provision of Personally Identifiable Information (PII) by Applicants
36. We modify the Standard Questions in Attachment E/Broadcast
Section 310(b) PDR to clarify the set of individuals for whom
broadcasters must provide PII, as requested by NAB. Each set of
Standard Questions requires applicants to provide PII for several
categories of individuals involved in the ownership and management of
the applicant as well as non-U.S. individuals with access to the
applicant's facilities. This PII will be required to be submitted in a
separate attachment, Attachment G. This PII is required so that the
Committee can conduct investigations of individuals involved in the
ownership and operations of the applicant and those non-U.S.
individuals with access to facilities.\30\ NAB contends that Question
19 in Attachment E/Broadcast Section 310(b) PDR, which seeks
information concerning ``any non-U.S. Individual, owners, or
management, including independent or third-party Individuals/Entities
of the Relevant Party or Foreign Party'' that has access to ``physical
facilities or equipment under the Relevant Party's or Foreign Party's
control,'' is ``overly broad, unduly burdensome and intrusive.'' NAB
argues that Question 19 ``appears to sweep in virtually any non-U.S.
employee, all of whom presumably have access to `physical facilities'
of the Relevant Parties. . . .'' NAB suggests that we modify Question
19 ``to describe specific types of facilities or equipment that would
give rise to potential Committee concerns and to focus on U.S.
facilities only.''
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\30\ Pursuant to the process set out in the Executive Order, for
each application reviewed by the Committee, the Office of the
Director of National Intelligence shall produce a written assessment
of any threat to national security interests of the United States
posed by granting the application or maintaining the license.
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37. We agree with NAB that, as proposed, Question 19 is overly
inclusive and could be viewed as applying to any non-U.S. employee with
access to any facility of the broadcaster, including production
facilities located outside of the United States. Additionally,
Committee staff has clarified that it is only concerned with facilities
outside of the United States that store, process, or provide access to
U.S. person data (including data on current, past, and potential
customers) or that are used to broadcast into the United States. Based
on this, we believe that narrowing the scope of this question is
therefore warranted. Accordingly, we clarify that broadcasters must
provide the information listed in Question 19 for non-U.S. Individuals
with access to (1) all facilities and equipment in the United States,
(2) facilities outside the United States that are used to broadcast
into the United States, and (3) facilities both inside and outside the
United States that store, process, or provide access to U.S. person
data (including data on current, past, and potential U.S. customers).
38. We decline USTelecom's request that we change the PII reporting
requirements for individuals with access to submarine cable facilities.
USTelecom argues that Question 34 in Attachment C--which seeks
information on Non-U.S. Individuals' access to submarine cable
facilities, equipment, communications content, and customer records,
among other things, including PII concerning those Non-U.S. Individuals
with such access--``should be confined to the Domestic Communications
Infrastructure (except for the NOC), as it has been in practice in past
proceedings.'' USTelecom also argues that because this question
``applies to specific individuals, this will be a constantly changing
list given normal personnel activity over time'' and ``in certain
foreign jurisdictions, some of the required information may not be
legally obtainable from individuals or may be very difficult to provide
to the U.S government given the country's own limitations and privacy
laws.'' USTelecom urges the Commission to eliminate Question 34 or
revise the question to ask generally if non-U.S. individuals will have
such access ``without any requirement to identify specific
individuals.''
39. We reject USTelecom's suggestion. The Committee staff oppose
the modification of this question, stating that submarine cables are
U.S. critical infrastructure and that applicants should provide PII and
other details about non-U.S. individuals with access to either U.S. or
foreign facilities (e.g., cable landing stations, Network Operations
Centers, etc.) related to the submarine cable as it is necessary for
the Committee's national security and law enforcement analysis. We
agree. We also agree with Committee staff that submarine cable
operators should have in place access control policies for these
critical facilities that will enable them to provide details concerning
the individuals with access to their facilities, whether they are
located in the United States or in a foreign country. With regard to
USTelecom's contention that it would be difficult to answer this
question given the changes in personnel activity and limitations
imposed by foreign laws, the Standard Questions can only be answered
with information known at the time of submission. If there are future
changes, we anticipate that a mitigation agreement between the
applicant and the Committee could address how the applicant should
update the Committee with any necessary information.\31\
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\31\ Committee staff also state that if an applicant is unable
to provide this information, it can explain such limitations in its
response.
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40. We agree with USTelecom that questions that require the
applicant to identify an Individual to be the Licensee's authorized law
enforcement point of contact should be limited to the U.S. cable
landing party. This is consistent with the Commission's statement in
the Executive Branch Review Order that for consortium cables, the
consortium must ``identify one U.S. citizen or lawful permanent U.S.
resident as a point of contact for lawful requests and an agent for
legal service of process for each licensee of the consortium cable.''
H. Information About the Applicant's Services
1. Critical Infrastructure
41. Based on C&B's request, we will update the list of U.S.
critical infrastructure sectors outlined in the Standard Questions to
track Presidential Policy Directive 21 (PPD-21). Each set of Standard
Questions (excluding Attachment E/Broadcast Section 310(b) PDR) asks if
the applicant will serve any sectors of U.S. critical infrastructure
and includes a checklist of various sectors. C&B notes that ``the
listed sectors do not align with the current list of critical
infrastructure sectors identified under Presidential Policy Directive
21 (PPD-21).'' PPD-21 establishes a national policy on critical
infrastructure security and resilience, and identifies 16 critical
infrastructure sectors, not all of which overlap with the sectors
listed in the proposed Standard Questions' checklist. Upon closer
review and consultation with Committee staff, we agree with C&B that
the list of critical infrastructure sectors provided in the Standard
Questions should be revised to be consistent with PPD-21. Accordingly,
we have modified the Standard Questions to reflect the list of sectors
contained in PPD-21.
42. We agree with C&B that additional clarity is needed with
regards to the meaning of the word ``serve'' in questions pertaining to
serving sectors of U.S. critical infrastructure. C&B
[[Page 68436]]
contends that the intent of Question 36 in Attachment A/International
Section 214, which asks whether ``the Applicant [will] serve any
sectors of U.S. critical infrastructure,'' is unclear. C&B notes that
this question could be interpreted in different ways and asks the
Commission to provide clarity as to the meaning of ``serve'' to
``appropriately narrow the scope of the question.'' We modify the
question to be consistent between the Attachments to use the phrase
``provide services to,'' which includes situations where the applicant
provides service to, has customers in, or participates in the market in
certain sectors of U.S. critical infrastructure. We also note that if
applicants are unsure whether or to what extent they believe they are
providing service to a critical infrastructure sector, applicants
should provide an explanatory note in their answers to the Standard
Questions explaining to the Committee why they responded in a
particular way.
2. Proposed Services Checklist
43. We will not modify the list of services in the Reference
Question section in Attachments A/International Section 214, B/
International Section 214 Assignment or Transfer, and F/Common Carrier
Wireless or Earth Station PDR, but will rename this list to clarify the
information targeted by this question. Attachments A/International
Section 214, B/International Section 214 Assignment or Transfer, and F/
Common Carrier Wireless or Earth Station PDR as proposed included an
``Applicant Services Portfolio Checklist and Reference Questions''
section designed to gather detailed information regarding the types of
telecommunication services applicants intend to provide. Applicants
indicate with a checkmark the types of services and technologies they
intend to offer. C&B contends that some of the named proposed services
are not services (such as TDM) or are too generic (such as ``video'' or
``email''). C&B therefore suggests we revise the proposed services
checklist ``to add specificity and eliminate redundancies, or remove it
altogether.'' Although we agree with C&B that not all items included on
this list are strictly services, we find that the list will be useful
to the Committee, which has a specific interest in knowing if the
applicant will provide any of the items in the checklist, including
certain technologies and types of network infrastructure. To address
any confusion as to what the list includes, we will rename the list
from ``Proposed Services'' to ``Proposed Services/Technologies/Network
Infrastructure.'' We do not believe applicants will be unduly burdened
in determining how to fill out the checklist, and, as we have
discussed, we encourage applicants to explain to the Committee how they
interpreted a particular question in providing their response.
3. Reference Questions
44. We do not agree that the ``Reference Questions'' and Questions
35 in Attachments A/International Section 214 and B/International
Section 214 Assignment or Transfer and 38 in Attachment F/Common
Carrier Wireless or Earth Station PDR are duplicative, but we provide
clarification regarding the information sought by each question. MLB
believes that the ``Reference Questions'' are duplicative of an earlier
question that seeks information concerning the manner in which
applicants will deliver services to their customers. Specifically, MLB
argues that Reference Question 1 in Attachments A/International Section
214 and B/International Section 214 Assignment or Transfer, as
proposed, is nearly the same as Question 35 regarding delivery of
services. MLB also asserts that the Reference Questions ask for network
infrastructure information that would have already been provided in
response to Question 32(b) in Section V. MLB advises omitting the
Reference Questions altogether, suggesting they are redundant and
``needlessly expend the resources of applicants and the Committee.''
Although Question 35 and Reference Question 1 appear to be similar, the
Committee indicate that they are in fact meant to seek different,
albeit related, information. Importantly, Committee staff states that
Question 35 is intended to obtain a general description of the services
to be provided, whereas the Reference Questions are intended to obtain
finer technical detail on the way services are or will be provided with
specific reference to each service selected in the services checklist
table. Similarly, we find that Question 32(b) is intended to obtain a
more general description of the Applicant's network, whereas the
Reference Questions are structured to obtain specific technical
details, such as equipment models and software update plans. We give
deference to the Committee on their need for this information to inform
their national security and law enforcement review. Accordingly, we
will retain these separate questions but revise Question 35 (now
Question 36 in Attachment A/International Section 214) to indicate that
this question seeks a general description of the manner in which
services will be delivered to customers. To the extent that an
applicant believes that its responses to questions are the same, it can
cross-reference its responses as directed in the Standard Questions'
instructions.
4. Use of Interconnecting Carriers and Peering Relationships
45. We decline to make any changes to questions concerning
interconnecting carriers or peering relationships. Questions 33 in
Attachment B/International Section 214 Assignment or Transfer, 41 in
Attachment C/Submarine Cable Application, and 42 in Attachment D/
Submarine Cable Assignment or Transfer ask whether the Proposed
Authorization Holder(s) or Applicant(s) ``use interconnecting carriers
and/or peering relationships,'' and ask the Applicants to provide
details and list the carriers with whom they have these relationships.
USTelecom argues that these questions are ``misguided'' because ``it is
unclear as to how this information is useful to the determination of a
submarine cable's public interest, nor does it evince a clear
understanding of what `interconnecting carriers' do or what `peering
relationships' mean in this case.'' USTelecom contends that ``[t]his is
particularly true because [these questions] seek[ ] this information
only from the Applicants, not anyone who will purchase the capacity on
the system, which for some cables will represent the bulk, if not all,
of the traffic carried.'' These types of relationships are relevant to
the Committee's national security and law enforcement analysis of the
application, even if they do not reach everyone who may use the
submarine cable. With regard to CTIA's argument that ``[r]ather than
require a comprehensive, detailed list of peering and interconnection
relationships . . . the question should allow sufficient flexibility
for parties to determine the level of detail they are able and expected
to provide,'' we believe that the Standard Questions do provide
applicants with flexibility in how they choose to describe peering
relationships, and thus do not need to be changed or eliminated.
I. National Security/Law Enforcement Questions
46. We do not make any changes to the questions related to an
applicant's national security and law enforcement obligations. Question
19 in Attachments A/International Section 214 and B/International
Section 214 Assignment or Transfer asks whether the applicant, ``if
required by law, regulation, or license condition,'' would report
certain named incidents immediately upon discovery. USTelecom asks what
the effect of a
[[Page 68437]]
``no'' answer is to Question 19, expressing concern that the question
``appears to be an attempt to compel Applicants to provide information
they would not otherwise be legally required to provide'' and if so,
USTelecom says it should be made an explicit obligation through other
regulatory means. We do not share USTelecom's concerns regarding this
question. If Committee staff has any concerns with an answer of ``no,''
they may decide to follow up with Tailored Questions.
47. USTelecom also has concerns with the national security
implications of certain questions in the section 214 and submarine
cable questionnaires (Attachments A-D). Question 21 in Attachments A/
International Section 214 and B/International Section 214 Assignment or
Transfer asks if any non-U.S. individuals will have access to any of
the applicant's facilities, equipment, customer records, and network
control features, among other things, and if so, to provide their
identity and certain PII. Question 23 in these questionnaires asks for
information about encryption technologies that have been or will be
installed in the applicant's network. USTelecom believes that together,
Questions 21 and 23 require disclosure of too much network security
plan information, and this disclosure could amount to a security risk
in and of itself. We find that USTelecom's concern about over-
disclosure of network security plans through responses to Questions 21
and 23 is misplaced and we make no changes to these questions. The
disclosure in this case is solely to the U.S. government agencies most
involved in network security issues and for the purposes of assessing
risk to U.S. national security and law enforcement interests. To the
extent that an applicant has concerns about co-applicants seeing its
responses to Questions 21 and 23, it can mark those responses as
sensitive and ask that they not be shared with co-applicants.
48. USTelecom recommends ``greater clarity surrounding the security
expectations of applicants,'' citing Question 33 in Attachment C/
Submarine Cable Application, which asks ``[w]hat provision will be made
to monitor suspicious activity occurring over the paths of the
cables,'' as an example. USTelecom believes that the details regarding
``what an applicant can and cannot monitor from a practical standpoint
can vary widely depending on the arrangement and technical architecture
of the submarine cable equipment,'' and requests that the question be
modified to reflect these different arrangements. We understand
USTelecom's concern that Question 33 in Attachment C, as written, may
not capture the variations in different cable systems' monitoring
systems. The Standard Questions must be high-level to a certain extent
and applicants may want to consider providing additional details about
their monitoring capabilities as part of their response to the Standard
Questions to properly frame and explain their responses.
J. Legal Authority for Certain Questions Concerning Broadcasters
49. We reject NAB's argument that the Commission should eliminate
certain questions in Attachment E/Broadcast Section 310(b) PDR,
``because they concern issues outside of the scope of the Commission's
jurisdiction and are thus not properly the subject of Committee
review.'' Specifically, NAB raises concerns with Questions 29,\32\
30,\33\ 31,\34\ and 34.\35\ NAB argues that the ``Committee's review
should analyze whether the proposed transaction will implicate national
security, law enforcement, foreign policy or trade policy issues
arising from the assignment or transfer of the broadcast license, not
from other business lines a broadcaster may be involved in or
activities the FCC cannot lawfully regulate.'' NAB contends, among
other things, that ``the Commission does not regulate consumer data
privacy or security of broadcast audiences and has no authority to
review broadcasters' data privacy and security practices either
generally or in connection with proposed transactions.'' We disagree
with NAB that these questions should be excluded from Attachment E/
Broadcast Section 310(b) PDR. The Commission considers national
security, law enforcement, foreign policy, and trade policy concerns of
foreign ownership in excess of the 25% statutory benchmarks in its
public interest review of petitions for declaratory rulings under
section 310(b)(4) of the Act and refers applications with reportable
foreign ownership to the Committee, which has specific expertise in
these matters. In this regard, the information solicited by the
Standard Questions enables the Committee to assess potential foreign
influence of such foreign owners over a licensee as part of the
Committee's review of a particular application for national security
and law enforcement concerns. Thus, we are not regulating format or
content but are assessing whether the public interest would be served
by not permitting foreign ownership in accordance with section 310(b)
of the Act, and information provided to the Committee concerning the
nature of the broadcast services, for example, is relevant to the
Committee's review of the potential for such influence by foreign
owners.\36\ To the extent a broadcast applicant finds that a question
raises a particular concern, it should explain that in its response to
the Committee, which may send Tailored Questions to the applicant if
the Committee requires further explanation.
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\32\ Question 29 asks, ``Will programming be rebroadcast via
satellite or cable? If yes, provide details.''
\33\ Question 30 asks, ``Will programming be available online?
If yes, describe the streaming business operation (including what
platform(s) will be used to make the programming available
online.)''
\34\ NAB Comments at 9 through 10 (arguing that Question 31
implicates a Licensee's First Amendment rights as well as the Act's
prohibition on the Commission engaging in censorship and stating
that ``questions concerning a station's format, target audience, and
sources of advertising are not appropriate for Executive Branch
review''). Question 31 asks the Applicant to ``[d]escribe the
intended viewer/listener base of the Licensee's broadcasts, primary
language spoken of the target audience, and other demographics,
including: a) An explanation of how services are offered to each
category of viewers/listeners and platform; and b) Identification of
any specific business or economic sectors that supply advertising or
other assistance to either the Licensee or Petitioner.''
\35\ NAB Comments at 9, 10-11 (contending that ``the Commission
does not regulate consumer data privacy or security of broadcast
audiences and has no authority to review broadcasters' data privacy
and security practices either generally or in connection with
proposed transactions''). Question 34 asks the Applicant to
``[i]ndicate whether any Relevant Party or any of its subsidiaries
that offer application or web-based content collect, process, or
store any U.S. subscriber data. If so, identify what types of data
(e.g., name, address, email address, phone number, credit card
number, etc.) are collected, processed, or stored for each U.S.
subscriber.'' Among other things, Question 34 also seeks the
location of U.S. subscriber data storage, who serves as the
custodian and/or has access to such data and those individuals'
countries of citizenship, as well as whether U.S. subscriber data is
disclosed to third parties, and the security measures that are
intended to protect subscriber data from unauthorized access or
disclosure.
\36\ See, generally, 2013 Broadcast Clarification Order, 28 FCC
Rcd at 16245 through 46, paragraph 3 (stating that ``[t]he
Commission's approach to the benchmark for foreign investments in
broadcast licensees has reflected `heightened concern for foreign
influence over or control of [broadcast] licensees which exercise
editorial discretion over the content of their transmissions.''
(citing Market Entry and Regulation of Foreign-Affiliated Entities,
Notice of Proposed Rulemaking, 10 FCC Rcd 4844, 4884, paragraph 99)
(1995)).
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K. Additional Recommendations Concerning the Submission of the Standard
Questions to the Committee
50. By their very nature, Standard Questions that are meant to
address a broad range of situations will ask for information that an
individual applicant may not find to be specific to its own situation.
To the extent that a question is not applicable to an applicant's
[[Page 68438]]
situation, we encourage applicants to explain this in their responses
to the Standard Questions. Similarly, to the extent that an applicant
finds a question to be overly broad or unclear in its applicability to
the applicant's situation, it should explain that in its response. To
the extent the Committee requires further explanation, it can send
Tailored Questions to the applicant. Framing responses in this way will
help the Committee in its review and assessment of applicants'
responses and whether there will be a need for further information from
the applicants.
51. Along those lines, commenters also ask whether they can consult
with Committee staff regarding how to respond to certain questions, as
they currently do. The Committee staff have stated a strong preference
against negotiating the questions or responses with applicants before
the responses are filed with the Committee or prior to Commission
referral of an application. For instance, Committee staff state that
there could be situations in which an application might not be referred
at all. The Committee staff state that applicants should explain in
their submissions the scope of their responses and any limitations in
their responses. The Committee staff note that they can coordinate with
applicants regarding responses after the Commission refers the
application or when the Committee sends any Tailored Questions.
L. Other Revisions to Standard Questions
52. We also make several revisions to the Standard Questions to
correct spelling and grammatical mistakes, to correct formatting
issues, and to ensure that questions are standardized across the six
questionnaires. These revisions correct unintentional drafting errors
and do not change the substance of the Standard Questions beyond what
has been discussed in this Second Report and Order. We believe that
harmonizing the language across the Standard Questions will ease the
application process and facilitate Committee review of
applications.\37\
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\37\ CTIA, NAB, and USTelecom ask the Commission to clarify when
the 120-day clock starts. We believe that the Executive Branch
Review Order and the rules clearly state when the 120-day review
will begin. See Executive Order No. 13913, 85 FR at 19645, Sec.
5(b)(iii); Executive Branch Review Order, 35 FCC Rcd at 10958,
paragraph 82. See also 47 CFR 1.40004(e)(2) (providing that the 120-
day review will begin on the date of the Committee's deferral
request (under Section 1.40002(b), 47 CFR 1.40002) if it includes a
notification that tailored questions are not necessary).
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IV. Implementation
53. With the adoption of Standard Questions in this Second Report
and Order, we direct the International Bureau to work with the Media
Bureau and the Wireline Competition Bureau to seek approval from the
Office of Management and Budget (OMB) for the Standard Questions and
the rules adopted in the Executive Branch Review Order that are subject
to the Paperwork Reduction Act. Upon completion of OMB review, the
International Bureau shall issue a Public Notice informing the public
of the effective date of the requirements, including the requirement to
file responses to the Standard Questions with the Committee. The
International Bureau shall make the Standard Questions available on the
Commission's website no later than the time the Public Notice is
released. Once the rules are effective, all parties filing applications
subject to Executive Branch referral will be required to submit answers
to the Standard Questions to the Committee prior to or at the same time
that they file their applications with the Commission.
Supplemental Final Regulatory Flexibility Analysis
54. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), we have prepared this Supplemental Final Regulatory
Flexibility Analysis (Supplemental FRFA) of the possible significant
economic impact on small entities of the Standard Questions and
procedures addressed in this Second Report and Order to supplement the
Commission's Initial and Final Regulatory Flexibility Analyses in this
proceeding. The Commission previously sought written public comment on
the proposals in the Executive Branch Review NPRM, including comment on
the Initial Regulatory Flexibility Analysis (IRFA). The Commission did
not receive comments regarding the IRFA. Thereafter, in the Executive
Branch Review Order, the Commission issued a Final Regulatory
Flexibility Analysis (FRFA) conforming to the RFA. Subsequently, the
Commission's International Bureau released a public notice seeking
comment on specific proposed ``Standard Questions'' for applications
and petitions as prescribed by the Executive Branch Review Order
(Standard Questions Public Notice). As noted in the Executive Branch
Review Order, standardizing these questions should improve the
timeliness and transparency of the Executive Branch review process,
thereby lessening the burden on all applicants and petitioners,
including small entities. The Standard Questions Public Notice included
a Supplemental Initial Regulatory Flexibility Analysis (Supplemental
IRFA). This Supplemental FRFA supplements the FRFA to reflect the
actions taken in this Second Report and Order, which adopts a final set
of Standard Questions and conforms to the RFA.\38\
---------------------------------------------------------------------------
\38\ See 5 U.S.C. 604.
---------------------------------------------------------------------------
A. Need for, and Objectives of, the Second Report and Order
55. This Second Report and Order adopts a set of standardized
national security and law enforcement questions (Standard Questions)
that certain applicants and petitioners (together, ``applicants'') with
reportable foreign ownership will be required to answer as part of the
Executive Branch review process of their applications and petitions
(together, ``applications''). To expedite the national security and law
enforcement review of such applications, applicants must provide their
answers to the Standard Questions directly to the Committee for the
Assessment of Foreign Participation in the United States
Telecommunications Services Sector (Committee) \39\ prior to or at the
same time they file their applications with the Commission.
---------------------------------------------------------------------------
\39\ Executive Order No. 13913 of April 4, 2020, Establishing
the Committee for the Assessment of Foreign Participation in the
United States Telecommunications Services Sector, 85 FR 19643,
19643-44 (Apr. 8, 2020) (Executive Order 13913) (establishing the
``Committee'' composed of the Secretary of Defense, the Secretary of
Homeland Security, and the Attorney General of the Department of
Justice, who serves as the Chair, and the head of any other
executive department or agency, or any Assistant to the President,
as the President determines appropriate, and also providing for
Advisors, including the Secretary of State, the Secretary of
Commerce, and the United States Trade Representative).
---------------------------------------------------------------------------
56. The Executive Branch Review Order specified that the Standard
Questions should include the following categories of information: (1)
Corporate structure and shareholder information; (2) relationships with
foreign entities; (3) financial condition and circumstances; (4)
compliance with applicable laws and regulations; and (5) business and
operational information, including services to be provided and network
infrastructure. The adopted Standard Questions are based on the
Executive Branch Review Order and the sample questions previously made
available in this docket and the comments provided to the Commission
regarding those questions. The adopted Standard Questions consist of
the following:
<bullet> Attachment A--Standard Questions for an International
Section 214
[[Page 68439]]
Authorization Application. Standard Questions for an international
section 214 authorization application filed pursuant to 47 CFR 63.18,
including a modification of an existing authorization;
<bullet> Attachment B--Standard Questions for an Application for
Assignment or Transfer of Control of an International Section 214
Authorization. Standard Questions for an assignment or transfer of
control of an international section 214 authorization application filed
pursuant to 47 CFR 63.24;
<bullet> Attachment C--Standard Questions for a Submarine Cable
Landing License Application. Standard Questions for a cable landing
license application filed pursuant to 47 CFR 1.767 including a
modification of an existing license;
<bullet> Attachment D--Standard Questions for an Application for
Assignment or Transfer of Control of a Submarine Cable Landing License.
Standard Questions for an assignment or transfer of control of a cable
landing license application filed pursuant to 47 CFR 1.767;
<bullet> Attachment E--Standard Questions for a Section 310(b)
Petition for Declaratory Ruling Involving a Broadcast Licensee.
Standard Questions for a petition for declaratory ruling for foreign
ownership in a broadcast licensee above the benchmarks in section
310(b) of the Communications Act (the Act) filed pursuant to 47 CFR
1.5000-1.5004;
<bullet> Attachment F--Standard Questions for a Section 310(b)
Petition for Declaratory Ruling Involving a Common Carrier Wireless or
Common Carrier Earth Station Licensee. Standard Questions for a
petition for declaratory ruling for foreign ownership in a common
carrier wireless or common carrier earth station licensee above the
benchmarks in section 310(b) of the Act filed pursuant to 47 CFR
1.5000-1.5004; and
<bullet> Attachment G--Personally Identifiable Information (PII)
Supplement. Each set of Standard Questions references a supplement to
assist the Committee in identifying PII.
57. The Commission adopted the Standard Questions largely as
proposed in the Standard Questions Public Notice, with some important
changes to more narrowly tailor and clarify the instructions and
certain questions so as to decrease the burden on applicants. The
changes include:
<bullet> All Attachments: Modify the definition of ``Senior
Officer'' to capture any individual with authority to act on behalf of
the entity, rather than referring to specific individuals' titles.
<bullet> Attachment A/Question 2 Attachment B/Question 2;
Attachment D/Question 3; Attachment E/Question 2; Attachment F/Question
2: For clarity and consistency, modify these questions by adding the
term ``Controlling Interest.''
<bullet> All Attachments: Remove the term ``Immediate Owner'' from
the definitions section as that term is not used in any subsequent
questions.
<bullet> All Attachments: Correct inadvertent use of inconsistent
terms. For example, we have revised all questionnaires so that they are
consistent in the use of the defined terms ``Ultimate Owner'' and
``Ultimate Parent.''
<bullet> Attachment B/Question 1 and Attachment D/Question 1:
Remove transferors and assignors (the sellers) from the definition of
``Relevant Parties.''
<bullet> All Attachments: Modify the instructions in all
questionnaires to provide that all of the submitted information will be
protected from disclosure according to the provisions of Executive
Order 13913, Section 8, and that applicants will not have to
specifically identify information for such treatment.
<bullet> All Attachments: Clarify the instructions for multiple
applicants for a single application (such as consortium applicants for
a single submarine cable landing license).
<bullet> All Attachments: Modify the instructions to allow internal
cross-referencing of responses within a single questionnaire to
streamline the process for applicants. For example, if an applicant
provided a response to Question 15, and the applicant's response to
Question 27 contains the same information, the applicant may refer back
to its earlier response.
<bullet> Attachment F/Question 3: Remove language regarding prior
relationships from this question as it was unintentionally added to the
proposed questionnaire.
<bullet> Attachment A/Question 3; Attachment B/Question 3;
Attachment C/Question 8; Attachment D/Question 21; Attachment E/
Question 3; Attachment F/Question 3: Clarify that ``planned
relationships'' are ``current relationships or those reasonably
anticipated by negotiations or that are identified under current
business plans'' and clarify that this includes any situations in which
contracts have been signed or where the parties are already in
negotiations.
<bullet> Attachment A/Question 3; Attachment B/Question 3;
Attachment C/Question 8; Attachment D/Question 21; Attachment E/
Question 3; Attachment F/Question 3: Clarify that existing or planned
relationships/partnerships, and prior relationships/partnerships in the
case of broadcast applicants, and funding or service contracts, do not
include foreign subscribers to an applicant's retail services. Also
clarify that, for the purposes of these questions, these relationships
do not include foreign employees who are identified in other questions,
such as Senior Officers and Directors, and Non-U.S. Individuals with
physical access to certain facilities, records, networks, or electronic
interfaces.
<bullet> Attachment E: Remove the reference to ``Foreign Party'' in
questions 12, 18-21, 26, 31-34.
<bullet> Attachment A/Questions 7, 9; Attachment B/Questions 7, 9;
Attachment C/Questions 12, 14; Attachment D/Questions 13, 15;
Attachment E/Questions 5, 7; Attachment F/Questions 7, 9: Amend
language pertaining to an applicant's involvement or association with
prior Commission or Committee on Foreign Investment in the United
States (CFIUS) filings to specify that an ``involved'' or
``associated'' Individual or Entity was either the applicant in a prior
Commission or CFIUS filing or listed as an owner in such a prior
filing.
<bullet> Attachment A/Question 7; Attachment B/Question 7;
Attachment C/Question 12; Attachment D/Question 13; Attachment E/
Question 5; Attachment F/Question 7: Adopt a ten-year time boundary
regarding prior Commission filings that must be disclosed.
<bullet> Attachment E/Question 19: Clarify that broadcasters must
provide the information listed in Question 19 for non-U.S. Individuals
with access to (1) all facilities and equipment in the United States,
(2) facilities outside the United States that are used to broadcast
into the United States, and (3) facilities both inside and outside the
United States that store, process, or provide access to U.S. person
data (including data on current, past, and potential U.S. customers).
<bullet> Attachment C/Question 37; Attachment D/Question 39:
Clarify that for submarine cable applicants, only the U.S. cable
landing party need identify an authorized law enforcement point of
contact.
<bullet> Attachment A/Question 37; Attachment B/Question 36;
Attachment C/Question 45; Attachment D/Question 48; Attachment F/
Question 38: Update the list of U.S. critical infrastructure sectors
outlined in the Standard Questions to track Presidential Policy
Directive 21 (PPD-21).
[[Page 68440]]
<bullet> Attachment A/Section VI; Attachment B/Section VI;
Attachment F/Section VI: Rename the list of services in the Reference
Questions section from ``Proposed Services'' to ``Proposed Services/
Technologies/Network Infrastructure.''
<bullet> Attachment A/Question 36; Attachment B/Question 35;
Attachment F/Question 37: Revise questions so as to obtain a general
description of the manner in which applicants will deliver services to
customers.
<bullet> Attachment A/Question 37; Attachment B/Question 36;
Attachment C/Question 45; Attachment D/Question 48; Attachment F/
Question 38: Revise questions to use phrase ``provide services to'' and
add a statement clarifying that the phrase ``provide services to'' in
these questions includes situations in which the applicant provides
service to, has customers in, or participates in the market in sectors
of U.S. critical infrastructure.
<bullet> All Attachments: Advise applicants that in the event that
they find a question to be overly broad or unclear in its
applicability, they should explain that in their response.
<bullet> All Attachments: Make several revisions to the Standard
Questions to correct spelling and grammatical mistakes, to correct
formatting issues, and to ensure that questions are standardized across
the six questionnaires.
The Standard Questions--with these changes and clarified
instructions--will ensure that the Committee has the information it
needs to conduct its national security and law enforcement review,
while also addressing concerns raised by commenters that certain
questions were unclear or overly burdensome.
B. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
58. The Commission did not receive comments specifically addressing
the rules and policies proposed in the Supplemental IRFA. Nonetheless,
in adopting the Standard Questions reflected in this Second Report and
Order, the Commission has considered the potential impact of the rules
and procedures proposed in the IRFA on small entities in order to
reduce the economic impact of the rules and procedures enacted herein
on such entities.
C. Response to Comments by the Chief Counsel for Advocacy of the Small
Business Administration
59. Pursuant to the Small Business Jobs Act of 2010, which amended
the RFA, the Commission is required to respond to any comments filed by
the Chief Counsel for Advocacy of the Small Business Administration
(SBA), and to provide a detailed statement of any change made to the
proposed rules as a result of those comments.
60. The Chief Counsel did not file any comments in response to the
proposed Standard Questions in this proceeding.
D. Description and Estimate of the Number of Small Entities to Which
the Rules Will Apply
61. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that will be
affected by rules. The RFA generally defines the term ``small entity''
as having the same meaning as the terms ``small business,'' ``small
organization,'' and ``small governmental jurisdiction.'' In addition,
the term ``small business'' has the same meaning as the term ``small
business concern'' under the Small Business Act. A small business
concern is one which: (1) Is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Administration
(SBA). Initial and Final Regulatory Flexibility Analyses were
incorporated into the Executive Branch Review Order and the Notice of
Proposed Rulemaking associated with that Order. In this Second Report
and Order, we hereby incorporate by reference the descriptions and
estimates of the number of small entities, as well as the associated
analyses, set forth therein.
E. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements for Small Entities
62. This Second Report and Order adopts Standard Questions that
would affect reporting, recordkeeping, and other compliance
requirements for applicants who file for international section 214
authorizations, submarine cable landing licenses or applications to
assign or transfer control of such authorizations, and section 310(b)
petitions for declaratory rulings (common carrier wireless, common
carrier satellite earth stations, or broadcast). Applicants with
reportable foreign ownership will be required to submit responses to
standard national security and law enforcement questions and will need
to certify in their applications that they have submitted the Standard
Questions and will send a copy of their FCC application to the
Committee. As noted in the FRFA in connection with the Executive Branch
Review Order, all applicants for international section 214 authority
and submarine cable licenses, regardless of whether they have
reportable foreign ownership will be required to certify that they: (1)
Will comply with the Communications Assistance for Law Enforcement Act
(CALEA); (2) will make certain communications and records available and
subject to lawful request or valid legal process under U.S. law; (3)
will designate a point of contact in the United States who is a U.S.
citizen or lawful permanent resident; (4) will keep all submitted
information accurate and complete during application process and after
the application is no longer pending for purposes of section 1.65 of
the rules, the authorization holder and/or licensee must inform the
Commission and the Committee of any contact name changes; and (5)
understand that failing to fulfill any condition of the grant or
providing materially false information could result in revocation or
termination of their authorization and other penalties. Petitioners for
broadcast licensee petitions for a section 310(b) declaratory ruling
for broadcast licenses will make the last three certifications but will
not need to make the first two certifications.
F. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternative Considered
63. The RFA requires an agency to describe any significant,
specifically small business, alternatives that it has considered in
reaching its proposed approach, which may include the following
alternatives, among others: ``(1) the establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rules for such small entities; (3) the
use of performance rather than design standards; and (4) an exemption
from coverage of the rule, or any part thereof, for such small
entities.''
64. In this Second Report and Order, the adopted Standard Questions
will help improve the timeliness and transparency of the review
process, thus lessening the burden of the licensing process on all
applicants, including small entities. Requiring applicants to submit
responses to the Standard Questions prior to or at the same time that
they file their applications at the Commission (rather than after
filing the application at the Commission) should facilitate a faster
response by the Executive Branch on its national
[[Page 68441]]
security and law enforcement review and advance the shared goal of the
Commission and industry, including small entities, to make the
Executive Branch review process as efficient as possible. As discussed
in the FRFA in the Executive Branch Review Order, timeframes for review
of FCC applications referred to the Executive Branch have also been
adopted, which will help prevent unnecessary delays and make the
process more efficient and transparent, which ultimately benefits all
applicants, including small entities.
G. Report to Congress
65. The Commission will send a copy of the Second Report and Order,
including this Supplemental FRFA, in a report to be sent to Congress
pursuant to the Small Business Regulatory Enforcement Fairness Act of
1996.
Ordering Clauses
66. It is ordered that, pursuant to sections 4(i), 4(j), 214, 303,
309, 310 and 413 of the Communications Act as amended, 47 U.S.C.
154(i), 154(j), 214, 303, 309, 310 and 413, and the Cable Landing
License Act of 1921, 47 U.S.C. 34-39, and Executive Order No. 10530,
Section 5(a) reprinted as amended in 3 U.S.C. 301, this Second Report
and Order is adopted.
67. It is further ordered that as discussed herein, pursuant to 47
U.S.C. 155(c) and 47 CFR 0.261, the Chief of the International Bureau
is directed to administer and make available on a public website, a
standardized set of national security and law enforcement questions for
the Categories of Information set forth in Part 1, Subpart CC of the
Commission's rules.
68. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Second Report and Order to Congress and the Government
Accountability Office pursuant to the Congressional Review Act, see 5
U.S.C. 801(a)(1)(A).
69. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Second Report and Order, including the Supplemental Final
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer.
[FR Doc. 2021-24944 Filed 12-1-21; 8:45 am]
BILLING CODE 6712-01-P
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</html>Indexed from Federal Register on December 2, 2021.
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