Unsealed China Telecom Decision Finds No Fault in FCC Order

The U.S. Court of Appeals for the D.C. Circuit unsealed and released its full December ruling upholding the FCC's revocation of China Telecom Americas’ domestic and international authorities (see 2111150025). The government supported unsealing the 24-page decision Thursday, but the provider opposed that (see 2301090051). “China Telecom argues that the Revocation Order is arbitrary, capricious, and unsupported by substantial evidence,” the unsealed opinion said: “It dismisses as speculative the Commission’s concern that China Telecom will be used as a vector of cyberwarfare against the United States and disputes the Commission’s conclusion that its conduct constituted breaches of the Letter of Assurances.” The court found “no merit in China Telecom’s claims.” The opinion, by Judge Harry Edwards, fully upheld the FCC (docket 21-5215). He was joined by Judges Karen Henderson and Greg Katsas. “The Commission’s determinations that China Telecom poses a national security risk and breached its Letter of Assurances are supported by reasoned decisionmaking and substantial evidence in the unclassified record,” the court said. “In addition, we hold that no statute, regulation, past practice, or constitutional provision required the Commission to afford China Telecom any additional procedures beyond the paper hearing it received.” The court said “contrary to China Telecom’s suggestion, the Commission need not wait for a risk to materialize before revoking a [Communications Act] section 214 authorization.” Nothing in the law, or regulation, required the FCC to do more than it did, the opinion said. “China Telecom insists that it is entitled to discovery, a live hearing before a neutral adjudicator, and an opportunity to demonstrate or achieve compliance,” Edwards wrote: “Given the record in this case, however, we hold that none of the additional procedures sought by China Telecom is required by statute, regulation, FCC practice, or the Constitution.” The FCC issued the first international authorization for the company to its parent China Telecommunications in 2001. “Since that time, the national security landscape has changed significantly, with the focus shifting from terrorism to Chinese cyber threats,” the court said. After a nearly yearlong process, the FCC voted 4-0 in October 2021 to revoke the company’s international authorizations (see 2110260060), which the company appealed to the D.C. court (see 2111150025).