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The new executive order by President Donald Trump involving review of licensing for telecommunications companies that have "foreign participation" has raised a number of legal concerns.

Trump signed the Order on Establishing the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector on April 3 and almost immediately telecom attorney Brian Murray said general counsel started calling.

The order says the new committee can review the granting or transfer of licenses by the Federal Communications Commission for "risks to national security or law enforcement interests."

It also says the committee "may review existing licenses to identify any additional or new risks to national security or law enforcement interests of the U.S." In other words, any telecom network applying for a license, seeking to transfer a license or holding an existing license could be affected.

The U.S. Department of Justice said Tuesday that Attorney General William Barr would head the committee. "In the digital age, our telecommunications networks are more important than ever, and not just to the economy," Barr said in a statement. "This is a national security and public safety issue. That's why the federal government must be vigilant and ensure that a foreign adversary cannot undermine the networks our country depends on."

Still, the order has some general counsel worried. Murray, a partner at Wilkinson Barker Knauer in Washington, D.C., told Corporate Counsel, "If I were a general counsel, I would be concerned about the extent to which the FCC, aided and abetted by this committee, might start to reopen old business. Especially if I'm a company with some amount of foreign ownership or a foreign role in my business, such as equipment."

Two general counsel, he said, have already questioned him about that aspect of the order.

Other concerns mentioned to Murray include:

  • Will the reviewing of past licenses be broadened to include experimental licenses or licenses granting special temporary authority?
  • The order specifically puts the attorney general in charge of the committee, which includes the Secretaries of Homeland Security and Defense along with other interagency officials. "I have heard concerns that this [attorney general control] risks greater politicization of the process," Murray said.
  • Previously, the FCC used the phrase "foreign participation" to mean foreign investment or control. Will the committee expand the phrase to include use of foreign equipment in U.S. systems or other types of foreign influence on U.S. licensed companies?
  • The FCC has been trying to reform its rulemaking authority involving foreign ownership since 2016. Will the order resolve all the open issues discussed under that process?

FCC chairman Ajit Pai on Monday issued a statement applauding the order. Pai added, "Now that this executive order has been issued, the FCC will move forward to conclude our own pending rulemaking on reform of the foreign ownership review process. As we demonstrated last year in rejecting the China Mobile application, this FCC will not hesitate to act to protect our networks from foreign threats."

The executive order formalizes what was an informal interagency process in the past, dubbed Team Telecom. Murray calls the new committee Team Telecom 2.0.

The federal government has talked of formalizing the process for several years, he said, so the concept of the committee didn't surprise him. However, "certainly seeing it emerge from the shadows of the coronavirus on a Saturday afternoon did," he said.

The best-case scenario, Murray said, would be if the new committee "merely memorializes the unwritten protocols as they existed, but with more predictability."

Some of general counsel's concerns may be addressed soon because the order also mandates the committee, within 90 days, to reach a memorandum of understanding on how to implement the process.

"We don't know if the memorandum will be made public," Murray said. "We hope it will be. If not, the concerns will remain."