Howard Buskirk

An attempt by subsidiaries of two Chinese companies to raise deference questions in a recent filing at the U.S. Court of Appeals for the D.C. Circuit (docket 23-1032) on FCC equipment authorization rules may not work, legal experts said. Dahua USA and Hikvision USA raised deference issues as part of their arguments on why equipment they make and sell in the U.S. doesn’t belong on the FCC’s list of “covered equipment” deemed to pose a threat to U.S. security.

Dahua USA and Hikvision USA detailed their arguments for why the equipment they make and sell in the U.S. doesn’t belong on the FCC’s list of “covered equipment” deemed to pose a threat to U.S. security. The subsidiaries of larger Chinese companies appealed the FCC Nov. 25 order barring authorization of network equipment on the covered list (see 2304250043) in a pleading filed Thursday at the U.S. Court of Appeals for the D.C. Circuit (docket 23-1032).

The U.S. Supreme Court is difficult to predict, but lawyers see reason to believe the court will use an upcoming case, Loper Bright Enterprises v. Raimondo, to clarify the status of the Chevron doctrine, legal experts told us. The doctrine underlies the authority of independent agencies like the FCC and the FTC. The court last week agreed to hear the maritime case (docket 22-451). The court hasn’t cited Chevron for several years, though it continues to be cited by lower courts.

CTIA hailed a decision by Judge Alfred Irving of the Superior Court of the District of Columbia, who struck expert witnesses from a long-standing RF lawsuit filed against Motorola, Nokia, Qualcomm and other companies. Irving handed down an 83-page decision Tuesday that considered each of the experts and why he was dismissing their testimony.

The major questions doctrine, as laid out in July’s Supreme Court decision in West Virginia v. EPA (see 2206300066), is likely to play an increasingly important role in future decisions on actions by federal agencies like the FCC, experts said Wednesday during an FCBA webinar. In a 6-3 decision, justices didn’t overrule the Chevron doctrine but appeared to further clamp down on agencies' ability to regulate without clear direction from Congress.

The 3rd Circuit U.S. Court of Appeals upheld a lower court’s dismissal of a junk fax class-action lawsuit, seeking damages under the Telephone Consumer Protection Act. A concurring option examines the FCC's pretext language from 2003.

Challenges to the FCC’s USF program filed in three federal circuits by Consumers Research raise larger questions about the nondelegation doctrine and how the FCC interprets Section 254 of the Communications Act, lawyers said during an FCBA hybrid event Wednesday. The case could be headed to the Supreme Court, they said.

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).

Chinese companies appear likely to take the FCC to court with the commissioners approving, as expected, a draft order to further clamp down on gear from Chinese companies, preventing the sale of yet-to-be authorized equipment in the U.S. The order, circulated by FCC Chair Jessica Rosenworcel Oct. 5, bans FCC authorization of gear from companies including Huawei, ZTE, Hytera Communications, Hikvision and Dahua Technology.

The U.S. government charged two Chinese intelligence officers with attempting to obstruct a criminal case against Huawei, in the Eastern District of New York, DOJ said Monday. The charges against Guochun He and Zheng Wang were announced by Attorney General Merrick Garland, FBI Director Christopher Wray and other officials. The agents thought they recruited “an asset,” but the individual was “actually a double agent working on behalf of the FBI,” Garland said at a news conference: “The defendants paid a bribe to the double agent to obtain nonpublic information, including files from the U.S. attorney’s office in the Eastern District. They did so in the hope of obtaining the prosecution’s strategy memo, confidential information regarding witnesses, trial evidence and potentially new charges to be brought against” Huawei. The defendants, who are still at large, allegedly paid about $61,000 in Bitcoin bribes to the FBI agent, DOJ said. The complaint said the incident took place after January 2019. In 2020, the U.S. accused Huawei of conspiring to violate the Racketeer Influenced and Corrupt Organizations Act (see 2002130030). If convicted, He faces up to 60 years in prison, Wang up to 20 years, DOJ said. “Anyone still wanna make the case that concerns about Huawei are overblown?” tweeted Michael Sobolik, fellow at the American Foreign Policy Council. “Sorry not sorry, Huawei is a tech cancer,” tweeted Nathan Leamer, an aide to former FCC Chairman Ajit Pai: “We must secure our networks and kick them out.”