Telecom and national security lawyers have complained vociferously for years about the “Team Telecom” process. More recently, an FCC Commissioner added his voice to these complaints, and many other government officials have acknowledged that the process is not nearly as efficient as it should be.
Team Telecom is an informal staff-level working group of the Departments of Justice (chairing the group), Homeland Security, and Defense. To safeguard national security, these departments generally review and make recommendations regarding FCC license applications; a Team Telecom review is triggered when there is a potential or actual foreign ownership stake of 10% or more (and in certain other circumstances).
While there is neither explicit statutory or regulatory basis for Team Telecom, the FCC generally defers to Team Telecom requests and recommendations. The most frequent request from Team Telecom is that the FCC defer a license or other approval until Team Telecom has resolved any national security concerns. Often, Team Telecom simply needs more time to review the facts of a license application, and sometimes Team Telecom requires the applicant to agree to certain conditions, such as maintaining a security plan, ensuring that data and records can be accessed from inside the United States, and having a dedicated contact for communications with the US government.
Unfortunately, many transactions have been delayed simply because Team Telecom does not have adequate resources to conduct a timely review; further, because Team Telecom operates informally, there are no real deadlines, and reviews can stretch for many months (and much longer, in unusual cases).
The pressure has been building over the last several years to reduce the frequency and average length of delay. Finally, on May 12, the FCC announced it is seeking comments on a set of proposals to streamline the Team Telecom process. Interested parties must submit comments by May 23. The FCC has indicated it is considering the following proposals:
First, parties undergoing a Team Telecom review would submit answers to a standardized set of questions. This proposal would codify what are already standard Team Telecom procedures.
Second, FCC applicants (not limited to those with foreign ownership) generally would be required to certify, as a routine matter, to many of the conditions that Team Telecom often requires when there are national security concerns. For example, the applicant would certify in the application process that the applicant will be able to access data and records from within the United States and provide government access to those records, and that the applicant will provide a point of contact who is a US citizen or permanent resident. This presumably would reduce the frequency with which Team Telecom requires a stand-alone agreement, which often takes months to effectuate.
Third — and this third part is not yet evident from any public document but it has been rumored for a long time, and we understand it likely will be part of a proposed FCC rule – a failure by Team Telecom to act on a matter within 90 days would be treated as a Team Telecom clearance. Although Team Telecom could request additional time to conduct a review, we understand that the FCC may require specific reasons from Team Telecom that additional time is needed.
These proposals are unlikely to make the Team Telecom process a well-oiled machine – efficiency is rarely the hallmark of national security review processes – but the proposals would significantly improve the process.
Of course, the proposals are, at this point, just proposals, and there is a long rulemaking process before implementation occurs. But at least it appears there is real movement toward a better process, and virtually everyone – government officials included – seems to be happy about that.