USCA Case #21-1233 Document #1922414 Filed: 11/15/2021 Page 1 of 33
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`IN THE UNITED STATES COURT OF APPEALS
`FOR THE DISTRICT OF COLUMBIA CIRCUIT
`
`China Telecom (Americas) Corporation,
`
`Petitioner,
`
`v.
`
`Federal Communications Commission and
`United States of America,
`
`Respondents.
`
`Case No. 21-1233
`
`EMERGENCY MOTION TO STAY ORDER REVOKING AND
`TERMINATING CHINA TELECOM (AMERICAS) CORPORATION’S
`SECTION 214 AUTHORIZATIONS
`
`Andrew D. Lipman
`Russell M. Blau
`Raechel Keay Kummer
`1111 Pennsylvania Avenue, NW
`Washington, DC 20004
`T: (202) 739-3000
`F: (202) 739-3001
`andrew.lipman@morganlewis.com
`russell.blau@morganlewis.com
`raechel.kummer@morganlewis.com
`
`Counsel for China Telecom (Americas)
`Corporation
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`USCA Case #21-1233 Document #1922414 Filed: 11/15/2021 Page 2 of 33
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`I.
`
`TABLE OF CONTENTS
`STATEMENT OF FACTS .............................................................................. 2
`A. ChinaTelAmericas’ Section 214 Authorizations .................................. 2
`B. The Revocation Proceedings ................................................................. 4
`C. The Revocation Order ........................................................................... 7
`STANDARD .................................................................................................... 8
`II.
`III. ARGUMENT ................................................................................................... 9
`A. ChinaTelAmericas Is Likely to Prevail on the Merits .......................... 9
`1. The Commission ignored precedent ................................................. 9
`2. The hearing denial violated Due Process ....................................... 12
`3. The Commission denied ChinaTelAmericas an Opportunity to
`cure ................................................................................................. 18
`B. ChinaTelAmericas Will Be Irreparably Harmed Absent a Stay ......... 21
`C. No Harm Results from a Stay ............................................................. 24
`IV. CONCLUSION .............................................................................................. 25
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`USCA Case #21-1233 Document #1922414 Filed: 11/15/2021 Page 3 of 33
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`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Air N. Am. v. DOT,
`937 F.2d 1427 (9th Cir. 1991) ...................................................................... 20, 21
`Blackwelder Furniture Co. of Statesville, Inc. v. Seilig Mfg. Co., Inc.,
`550 F.2d 189 (4th Cir. 1977) .............................................................................. 21
`Bus. Options, Inc.,
`18 FCC Rcd. 6881 (2003) ................................................................................... 10
`Cal. Pub. Broad. Forum v. FCC,
`752 F.2d 670 (D.C. Cir. 1985) ............................................................................ 18
`Citizens Comm. to Save WEFM v. FCC,
`506 F.2d 246 (D.C. Cir. 1973) ........................................................................... 17
`Coosemans Specialties, Inc. v. Dep’t of Agric.,
`482 F.3d 560 (D.C. Cir. 2007) ............................................................................ 19
`Davenport v. Int’l Bhd. of Teamsters,
`166 F.3d 356 (D.C. Cir. 1999) .............................................................................. 9
`Goldberg v. Kelly,
`397 U.S. 254 (1970) ...................................................................................... 15, 16
`Hamdi v. Rumsfeld,
`542 U.S. 507 (2004) ............................................................................................ 16
`Hutto Stockyard, Inc. v. Dep’t of Agric.,
`903 F.2d 299 (4th Cir. 1990) ........................................................................ 19, 20
`Judicial Watch, Inc. v. DHS,
`514 F. Supp. 2d 7 (D.D.C. 2007) ........................................................................ 25
`Kirk v. Comm’r of Soc. Sec. Admin.,
`987 F.3d 314 (4th Cir. 2021) ........................................................................ 14, 15
`Kurtis J. Kintzel et al.,
`22 FCC Rcd. 17197 (2007) ................................................................................. 10
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`USCA Case #21-1233 Document #1922414 Filed: 11/15/2021 Page 4 of 33
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`LDC Telecomms., Inc.,
`File No.: ITC-214-20080523-00238, 31 FCC Rcd. 7228 (EB 2016), ................ 11
`Mathews v. Eldridge,
`424 U.S. 319 (1976) ...................................................................................... 13, 14
`Miss Am. Org v. Mattel, Inc.,
`945 F.2d 536 (2d Cir. 1991) ............................................................................... 21
`Nader v. Blair,
`549 F.3d 953 (4th Cir. 2008) .............................................................................. 12
`Nader v. FAA,
`440 F.2d 292 (D.C. Cir. 1971) ............................................................................ 21
`Nat’l Lifeline Ass’n v. Fed. Commc’ns Comm’n,
`No. 18-1026 & No. 18-1080, 2018 WL 4154794 (D.C. Cir. Aug. 10, 2018) .... 21
`Nken v. Holder,
`556 U.S. 418 (2009) ........................................................................................ 8, 24
`NOS Commc’ns, Inc.,
`18 FCC Rcd. 6952 (2003) ................................................................................... 10
`Procedural Streamlining of Admin. Hearings,
`35 FCC Rcd. (2020) ...................................................................................... 11, 12
`Publix Network Corp.,
`17 FCC Rcd. 11487 (2002) ................................................................................. 10
`In re Publix Network Corp.,
`Consent Order, EB Docket No. 02-149, File No. EC-01-TC-052 (Mar. 15,
`2005) ................................................................................................................... 10
`U.S. v. Heffner,
`420 F.2d 809 (4th Cir. 1969) .............................................................................. 12
`Washington Metro. Area Transit Comm’n v. Holiday Tours, Inc.,
`559 F.2d 841 (D.C. Cir. 1977) ............................................................ 9, 21, 24, 25
`WX Communications Ltd. Termination of Int’l Section 214 Authorization,
`Order, DA 19-130 (IB 2019) .............................................................................. 11
`
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`USCA Case #21-1233 Document #1922414 Filed: 11/15/2021 Page 5 of 33
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`Wypoint Telecom, Inc. Termination of Int’l Section 214 Authorization,
`Order, 30 FCC Rcd. (IB 2015) ........................................................................... 11
`Yanez-Marquez v. Lynch,
`789 F.3d 434 (4th Cir. 2015) .............................................................................. 12
`Statutes
`5 U.S.C. § 556(b) ..................................................................................................... 16
`47 U.S.C. § 312 .......................................................................................................... 9
`Other Authorities
`47 C.F.R. § 4.9 ......................................................................................................... 22
`47 C.F.R. § 63.01(a) ................................................................................................... 2
`47 C.F.R. § 63.18 ....................................................................................................... 2
`47 C.F.R. § 63.19 ..................................................................................................... 22
`47 C.F.R. § 63.71 ..................................................................................................... 22
`H.R. Rep. No. 1980, 79th Cong., 2d Sess. 275 (1946) ...................................... 19, 20
`S. Rep. No. 248, 79th Cong., 2d Sess. 35 (1946) .................................................... 20
`
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`USCA Case #21-1233 Document #1922414 Filed: 11/15/2021 Page 6 of 33
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`Pursuant to Circuit Rule 27(f), China Telecom (Americas) Corporation (“Chi-
`
`naTelAmericas”) moves this Court for an emergency stay pending review of the
`
`Federal Communications Commission’s (“Commission’s”) Order revoking and ter-
`
`minating its Section 214 authorizations (“Order”).1 Absent a stay, ChinaTelAmeri-
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`cas will be forced to cease significant operations, irreparably harming its business,
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`reputation, and relationships. This irreparable harm outweighs any conceivable harm
`
`caused by preserving the status quo pending judicial review.
`
`Absent relief, ChinaTelAmericas must notify its customers about the service
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`discontinuance by December 4, 2021. Accordingly, ChinaTelAmericas requests
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`Court action no later than Friday, December 3.2
`
`In support of its request, ChinaTelAmericas states as follows.
`
`Ex. A (In re China Telecom (Americas) Corp. (“ChinaTelAmericas”), GN
`1
`Docket No. 20-109, Order on Revocation and Termination (Nov. 2, 2021)). Exhibit
`A is a publicly available, redacted version of the Order. Contemporaneously here-
`with ChinaTelAmericas will file an unredacted version of the Order under seal. Chi-
`naTelAmericas also cites redacted versions of Exhibits C, D, F, and I, which will
`likewise be filed contemporaneously under seal.
`ChinaTelAmericas moved the Commission for a stay on November 5, 2021.
`2
`That motion has not been acted on as of the date of this Motion.
`
`1
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`USCA Case #21-1233 Document #1922414 Filed: 11/15/2021 Page 7 of 33
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`I.
`
`STATEMENT OF FACTS
`ChinaTelAmericas is a Delaware corporation headquartered in Virginia. Its
`
`parent is China Telecom Corporation Limited (“ChinaTelLimited”), a public com-
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`pany listed on the Hong Kong and Shanghai stock exchanges.
`
`ChinaTelAmericas’ Section 214 Authorizations
`A.
`Section 214(a) of the Communications Act of 1934 (“Act”) requires any “car-
`
`rier” seeking to provide interstate or foreign communications to first obtain “a cer-
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`tificate that the present or future public convenience and necessity require or will
`
`require” the proposed operations.3 The Commission automatically deems carriers
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`providing domestic interstate telecommunications services to hold such authority.4
`
`Parties seeking authority for telecommunications services “between the United
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`States … and a foreign point,” however, must formally apply.5
`
`In 2001, the Commission authorized ChinaTelLimited’s parent to provide fa-
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`cilities-based and resale services between the U.S. and all permissible points, except
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`China.6 ChinaTelLimited’s parent assigned this authorization to ChinaTelAmericas,
`
`3
`
`4
`
`47 U.S.C. § 214(a).
`47 C.F.R. § 63.01(a).
`47 C.F.R. § 63.18.
`See Int’l Authorizations Granted, Public Notice, DA 01-1794, Report No.
`6
`TEL-00423 (July 26, 2001).
`
`5
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`2
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`USCA Case #21-1233 Document #1922414 Filed: 11/15/2021 Page 8 of 33
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`then known as China Telecom (USA) Corporation, pursuant to applicable rules.7 On
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`August 21, 2002, the Commission granted ChinaTelAmericas an additional Section
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`214 authorization for services including China.8
`
`On July 25, 2007, ChinaTelAmericas notified the Commission of the pro
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`forma transfer of ownership of ChinaTelAmericas from ChinaTelLimited’s parent
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`to ChinaTelLimited.9 On August 9, 2007, the Department of Homeland Security no-
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`tified the Commission that there was no objection to the pro forma transfer subject
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`to ChinaTelAmericas’ July 17, 2007, letter of assurances (“Assurances”).10 The
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`Commission granted the pro forma transfer on August 15, 2007.11
`
`ChinaTelAmericas has long provided telecommunications and non-telecom-
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`munications services in the U.S., some of which are common carrier services under
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`Section 214. It provides resold mobile service as a Mobile Virtual Network Operator,
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`international Ethernet private line and leased circuits, wavelength, multiprotocol la-
`
`See Int’l Authorizations Granted, Public Notice, DA 02-2234, Report No.
`7
`TEL-00576 (Sept. 12, 2002).
`See Section 310(b)(4) Requests, Public Notice, DA 02-2060, Report No. TEL-
`8
`00567 (Aug. 22, 2002).
`See Section 310(b)(4) Requests, File No. ITC-T/C-20070725-00285, Public
`9
`Notice, DA No. 07-3632, Report No. TEL-01179 (Aug. 16, 2007).
`10
`Ex. B (Assurances (July 17, 2007)).
`See Int’l Authorizations Granted, File No. ITC-T/C-20070725-00285, Public
`11
`Notice, DA 07-3632, 22 FCC Rcd. 15266, 15268 (Aug. 16, 2007).
`3
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`USCA Case #21-1233 Document #1922414 Filed: 11/15/2021 Page 9 of 33
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`bel switching for virtual private networks, software defined wide area networks, vir-
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`tual private local area network services, data center and cloud services, and other
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`managed services including managed security and managed wide area networks.12
`
`ChinaTelAmericas’ customers include U.S. and Chinese enterprises, other telecom-
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`munications carriers, and consumers obtaining resold mobile services.13 ChinaTel-
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`Americas largely relies on other carriers’ facilities and services (including U.S.
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`carriers and non-affiliated service providers) to meet its customers’ needs.14
`
`The Revocation Proceedings
`B.
`On April 9, 2020, the National Telecommunications and Information Admin-
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`istration, on behalf of several Executive Branch agencies (the “Agencies”), recom-
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`mended that the Commission revoke and terminate ChinaTelAmericas’ international
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`Section 214 common carrier authorizations (“Recommendation”).15 The Recom-
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`mendation alleged that “substantial and unacceptable national security and law en-
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`forcement risks [are] associated with [ChinaTelAmericas’] continued access to U.S.
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`telecommunications infrastructure.”16 The Recommendation conveyed (1) alleged
`
`14
`
`See Ex. C (ChinaTelAmericas, GN Docket No. 20-109, Response to Show
`12
`Cause Order (June 8, 2020) (“Response”)) at Ex. 6 pp. 2–9.
`Id. at 1–2.
`13
`Id. at 2.
`Ex. D (Executive Branch Recommendation to Revoke and Terminate China
`15
`Telecom’s Int’l Section 214 Common Carrier Authorizations (Apr. 9, 2020)).
`Id. at 1.
`16
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`4
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`national security concerns, (2) ChinaTelAmericas’ “status as a subsidiary of a Chi-
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`nese state-owned enterprise under the ultimate ownership and control of the Chinese
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`government,” (3) alleged “inaccurate statements” made by ChinaTelAmericas to
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`U.S. government agencies and customers, and (4) alleged “opportunities” for “cyber
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`activities.”17 Further, the Agencies alleged that its concerns “cannot be mitigated.”18
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`On April 24, 2020, the Commission ordered ChinaTelAmericas to show cause
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`why it should not “institute a proceeding” to revoke and terminate its domestic and
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`international Section 214 authorizations, and to reclaim ChinaTelAmerica’s Interna-
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`tional Signaling Point Codes.19 ChinaTelAmericas’ response explained the lack of
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`grounds and facts to revoke ChinaTelAmericas’ authorizations, and argued that any
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`such proceeding must include an adjudicatory hearing before an Administrative Law
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`Judge (“ALJ”).20 In addition, ChinaTelAmericas submitted extensive evidence about
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`its independent operations in the U.S.;21 described its U.S. services;22 identified the
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`17
`
`Id.
`Id. at 2.
`18
`Ex. E (ChinaTelAmericas, GN Docket No. 20-109, Order to Show Cause
`19
`(Apr. 24, 2020) (“Show Cause Order”)).
`See Ex. C (Response).
`20
`See id. at Exs. 1–5 & 15.
`See id. at Ex. 6.
`
`21
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`22
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`5
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`USCA Case #21-1233 Document #1922414 Filed: 11/15/2021 Page 11 of 33
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`equipment used to provide telecommunications services,23 physical points of inter-
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`connection,24 and interconnection agreements;25 and provided detailed information
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`regarding its customers.26
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`ChinaTelAmericas also refuted the Recommendation’s misguided allegations
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`of untrustworthiness,27 explaining the context for prior statements about storage of
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`U.S. records,28 cybersecurity policies, and the timeliness of certain interactions with
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`the Executive Branch.29 ChinaTelAmericas provided evidence that it is not subject
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`to exploitation, influence, or control by the Chinese government and that its U.S.
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`operations do not provide opportunities to disrupt or misroute U.S. communications
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`traffic.30 Finally, ChinaTelAmericas reiterated its compliance with the Assurances
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`and its willingness to work cooperatively to mitigate any concerns.31
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`23
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`24
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`25
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`26
`
`27
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`28
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`29
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`30
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`31
`
`See id. at Ex. 7.
`See id. at Ex. 12.
`See id. at Ex. 13.
`See id. at Ex. 8.
`See id. at Ex. 16.
`Id. at 20–39.
`Id. at 39–45.
`Id. at 45–63.
`Id. at 63–72.
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`On December 14, 2020, the Commission instituted proceedings to revoke
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`and/or terminate ChinaTelAmericas’ domestic and international Section 214 author-
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`izations.32 The Instituting Order largely regurgitated the Recommendation and re-
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`jected ChinaTelAmericas’ hearing request.33 On January 14, 2021, the Agencies
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`filed comments with the Commission,34 to which ChinaTelAmericas replied on
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`March 1.35
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`The Revocation Order
`C.
`On November 2, 2021, the Commission released the Revocation Order, find-
`
`ing that ChinaTelAmericas is subject to exploitation, influence, and control by the
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`Chinese government and is “highly likely” to be forced to comply with Chinese gov-
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`ernment requests without procedures subject to independent judicial oversight.36
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`Also, “given the changed national security environment with respect to China,” it
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`found that the Chinese government’s ownership provided opportunities for ChinaTe-
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`Ex. F (ChinaTelAmericas, Order Instituting Proceedings on Revocation and
`32
`Termination and Mem. Op. and Order, 35 FCC Rcd. 15006 (2020) (“Instituting Or-
`der”)).
`Id. ¶¶ 1, 17, 71.
`33
`ChinaTelAmericas, GN Docket No. 20-109, Executive Branch Response (Jan.
`34
`14, 2021); Erratum (filed Jan. 19, 2021).
`See Ex. G (ChinaTelAmericas, GN Docket No. 20-109, Reply Comments
`35
`(Mar. 1, 2021) (“Reply Comments”)).
`36
`Ex. A (Order) ¶ 2.
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`lAmericas, its parent entities, and the Chinese government to access, disrupt, or mis-
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`route U.S. communications, which allow for espionage. Further, it “found” that Chi-
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`naTelAmericas’ conduct and representations demonstrate a lack of candor,
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`trustworthiness, and reliability that erodes the baseline level of trust that the Com-
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`mission and other U.S. government agencies require of telecommunications carriers.
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`It found mitigation futile.
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`The Commission consequently revoked ChinaTelAmericas’ domestic Section
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`214 authority and revoked and terminated ChinaTelAmericas’ international Section
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`214 authorizations. The Commission directed ChinaTelAmericas to discontinue ser-
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`vices pursuant to its Section 214 authority no later than sixty days from the release
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`of the Order—i.e., by January 3, 2022.37
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`II.
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`STANDARD
`In determining whether to grant a stay, this Court considers “(1) whether the
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`stay applicant has made a strong showing that he is likely to succeed on the merits;
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`(2) whether the applicant will be irreparably injured absent a stay; (3) whether issu-
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`ance of the stay will substantially injure the other parties interested in the proceed-
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`ing; and (4) where the public interest lies.”38 No single factor is dispositive, and the
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`37
`
`38
`
`Id. ¶ 3.
`Nken v. Holder, 556 U.S. 418, 434 (2009) (quotation omitted).
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`Court weighs each factor against the others.39 Thus, a stay may issue with a lesser
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`probability of success when the likelihood of irreparable harm is great.40 Here, each
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`factor favors a stay.
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`III. ARGUMENT
`A.
`ChinaTelAmericas Is Likely to Prevail on the Merits.
`By rejecting ChinaTelAmericas’ request for a hearing, the Commission ig-
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`nored decades of precedent, the Administrative Procedure Act (“APA”), and Chi-
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`naTelAmericas’ due process rights. ChinaTelAmericas is thus likely to succeed on
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`the merits because the Order is arbitrary and capricious and constitutionally infirm.
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`The Commission ignored precedent.
`1.
`As the Act is silent on revocation procedures, the Commission has consist-
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`ently borrowed the procedures for revoking radio licenses under Section 312(c) and
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`(d)41 of the Act, as implemented in Section 1.91 of the Commission’s rules. The
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`Commission has applied these procedures—which require an evidentiary hearing—
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`in all Section 214 revocation proceedings, except when respondents waived a hear-
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`ing.
`
`39
`
`See Davenport v. Int’l Bhd. of Teamsters, 166 F.3d 356, 361 (D.C. Cir. 1999).
`See Washington Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d
`40
`841, 844 (D.C. Cir. 1977) (“An order maintaining the status quo is appropriate when
`a serious legal question is presented, when little if any harm will befall other inter-
`ested persons or the public and when denial of the order would inflict irreparable
`injury. . . .”).
`41
`47 U.S.C. § 312.
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`In 2002, the Commission ordered Publix Networks to show cause why the
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`company should retain its Section 214 authorization.42 It designated eighteen issues
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`for a hearing, including determining “whether Publix Network’s authorization to op-
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`erate as a common carrier should be revoked.”43 It cited Section 1.91 for the hearing
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`procedures and Section 312 for the burden of proof.44 The Commission and the re-
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`spondents subsequently entered into a consent decree.45
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`In 2003, the Commission acted similarly in two revocation cases involving
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`telemarketing campaigns.46 In 2007, the Commission issued another similar show
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`cause order.47 In each of these proceedings, the Commission designated evidentiary
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`issues and the ultimate question of whether to revoke the respondents’ authority for
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`hearing.
`
`42
`
`Publix Network Corp., 17 FCC Rcd. 11487 (2002) (“Publix”)
`Id. ¶ 46(p).
`Id. ¶¶ 47, 48.
`In re Publix Network Corp., Consent Order, EB Docket No. 02-149, File No.
`45
`EC-01-TC-052 (Mar. 15, 2005).
`Bus. Options, Inc., 18 FCC Rcd. 6881, ¶¶ 36, 38 (2003), terminated by con-
`46
`sent, 19 FCC Rcd. 2916 (2004); NOS Commc’ns, Inc., 18 FCC Rcd. 6952 (2003),
`terminated by consent, FCC 03M-42 (2003).
`Kurtis J. Kintzel et al., 22 FCC Rcd. 17197, ¶ 1 (2007), terminated by consent,
`47
`2003 WL 22462083 (2009).
`
`43
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`44
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`The Commission has only revoked Section 214 authorizations without a hear-
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`ing in cases with defunct respondents or respondents that ignored Commission no-
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`tices. For example, in 2015, the Commission terminated, without hearings,
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`authorizations held by carriers that allegedly breached their agreements with the Ex-
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`ecutive Branch and did not respond to contact attempts.48 Unlike those cases, Chi-
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`naTelAmericas has not waived its opportunity for a hearing. ChinaTelAmericas
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`repeatedly responded to the Commission, opposed the proposed revocation, and re-
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`quested a hearing before an ALJ.49
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`The Commission dismisses these precedents as “nothing more than the Com-
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`mission’s lawful exercise of its discretion.”50 None of the cited cases, however, in-
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`dicates that the Commission took a discretionary action, and significantly, the
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`Commission cannot cite any instance of a contested revocation that proceeded with-
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`out a hearing.51
`
`See, e.g., Wypoint Telecom, Inc. Termination of Int’l Section 214 Authoriza-
`48
`tion, Order, 30 FCC Rcd. ¶ 4 (IB 2015); LDC Telecomms., Inc., File No.: ITC-214-
`20080523-00238, Order to Pay or to Show Cause, 31 FCC Rcd. 7228 (EB 2016),
`Revocation Order, 31 FCC Rcd. ¶ 5 (EB, IB & WCB 2016); WX Communications
`Ltd. Termination of Int’l Section 214 Authorization, Order, DA 19-130, ¶ 5 (IB
`2019).
`See Ex. G (Reply Comments), Sec. II.A; see also Ex. H (Procedural Stream-
`49
`lining of Admin. Hearings, 35 FCC Rcd. ¶ 12 (2020) (“Admin. Hearings Order”)).
`50
`Ex. A (Order) ¶ 21.
`51
`The Commission asserts that “even if [there were] a past policy of applying
`subpart B to all section 214 revocations, we no longer believe that such a policy is
`11
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`The Commission, however, cannot ignore inconvenient rules. When an
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`agency discards its procedures, “its action cannot stand and courts will strike it
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`down.”52 An administrative decision is invalid where there is: “(1) a violation (2) of
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`a regulation intended for the [individual’s] benefit, (3) that causes prejudice to the
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`[individual].”53 The Commission violated its own rules requiring a hearing, which
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`were intended to “safeguard[] the rights of parties to a full and fair hearing.”54 The
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`Commission’s failure to hold a hearing prejudiced ChinaTelAmericas by culminat-
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`ing in an Order that ignores material disputes of fact and applies an improper legal
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`standard for revocation.
`
`The hearing denial violated Due Process.
`2.
`The Commission’s hearing denial also violated ChinaTelAmericas’ due pro-
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`cess rights. Not surprisingly, the Commission has not disputed that ChinaTelAmer-
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`icas’ Section 214 authorizations are protected property interests, nor does it suggest
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`appropriate”—which falls short of the reasoned decision-making necessary to justify
`a change in policy. Id.
`U.S. v. Heffner, 420 F.2d 809, 811 (4th Cir. 1969) (citing U.S. ex rel. Accardi
`52
`v. Shaughnessy, 347 U.S. 260 (1954)); see also Nader v. Blair, 549 F.3d 953, 962
`(4th Cir. 2008) (“[W]hen an agency fails to follow its own procedures or regulations,
`that agency’s actions are generally invalid.”).
`Yanez-Marquez v. Lynch, 789 F.3d 434, 474 (4th Cir. 2015).
`53
`Ex. H (Admin. Hearings Order) ¶ 2. The Commission argues that the Admin-
`54
`istrative Hearings Order gives it flexibility to use procedures other than a live hear-
`ing (Order ¶¶ 20–21), but even those alternative procedures require that
`ChinaTelAmericas be afforded an opportunity for discovery and other protections
`that were withheld in this case.
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`that pre-deprivation processes were impossible. Instead, the Commission argues its
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`procedures were adequate. The Commission, however, has permitted an evidentiary
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`hearing in every other contested Section 214 revocation and has failed to justify its
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`about-face. Rather, it claims that such a hearing was unnecessary because “there are
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`no substantial and material questions of fact in this case warranting an adjudicatory
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`hearing”55 and thus, only written responses were allowed before revocation.56 But,
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`as explained below, that violates due process.
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`The Supreme Court requires agencies to consider various factors (the
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`“Mathews factors”) before depriving a person of their protected property interest.
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`The agency must consider: (1) “the private interest that will be affected by the offi-
`
`cial action”; (2) “the risk of erroneous deprivation of such interest through the pro-
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`cedures used, and the probable value, if any, of additional or substitute procedural
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`safeguards”; and (3) “the Government’s interest, including the function involved and
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`the fiscal and administrative burdens that the additional or substitute procedural re-
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`quirements would entail.”57 These factors strongly favor a hearing here.
`
`55
`56
`
`57
`
`Ex. A (Order) ¶¶ 39–43.
`Id. ¶ 24.
`Mathews v. Eldridge, 424 U.S. 319, 335 (1976).
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`First, as discussed in Section III.B below, the revocation of its Section 214
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`authorizations will severely impair ChinaTelAmericas’ business. Without the au-
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`thorizations, ChinaTelAmericas must cease providing telecommunications services
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`to tens of thousands of U.S. customers on a common carrier basis. The Commission
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`does not disagree and instead retorts that, while “revocation and termination will
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`have an impact on [ChinaTelAmericas] and its customers, private companies have
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`no unqualified right to operate interstate transmission lines.”58 However, wrongful
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`revocation of a license, even one subject to conditions, may still impair a constitu-
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`tionally protected interest.
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`Second, denying ChinaTelAmericas a hearing created an unacceptable risk of
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`(and resulted in) erroneous deprivation. In assessing the risk, the court considers “the
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`probable value, if any, of additional or substitute procedural safeguards.”59 “[T]he
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`Supreme Court has indicated that the risk of an erroneous deprivation is too high
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`where an individual is not provided ‘notice of the factual basis’ for a material gov-
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`ernment finding and ‘a fair opportunity to rebut the Government’s factual assertions
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`before a neutral decisionmaker.’”60 Indeed “‘these [safeguards] are among the most
`
`58
`Ex. A (Order) ¶ 25.
`59
`424 U.S. at 335.
`Kirk v. Comm’r of Soc. Sec. Admin., 987 F.3d 314, 325 (4th Cir. 2021) (cita-
`60
`tion omitted).
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`important procedural mechanisms for purposes of avoiding erroneous depriva-
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`tions.”’61
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`Although ChinaTelAmericas received notice of certain allegations, the Com-
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`mission denied it a fair opportunity to rebut those assertions at an evidentiary hear-
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`ing,62 the value of which the Commission implicitly acknowledges by authorizing a
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`hearing where due process requires.63 Although the Commission claims that Chi-
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`naTelAmericas has not shown any specific issue that would be elucidated by addi-
`
`tional process,64 the Commission’s own findings related to alleged violations of the
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`Assurances rely on contentious, disputed interpretations both of what the Assurances
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`required and whether ChinaTelAmericas violated those requirements. These issues
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`should not be resolved merely by reference to documents and instead require probing
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`the persons involved through discovery and cross-examination.
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`61
`
`64
`
`Id. (citation omitted).
`See Goldberg v. Kelly, 397 U.S. 254, 269 (1970) (“In almost every setting
`62
`where important decisions turn on questions of fact, due process requires an oppor-
`tunity to confront and cross-examine adverse witnesses.”).
`See Ex. H (Admin. Hearings Order) ¶ 12.
`63
`See Ex. A (Order) ¶ 26.
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`The lack of an impartial adjudicator also increased the risk of erroneous dep-
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`rivation.65 Before and during the revocation proceedings, past and present Commis-
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`sioners spoke publicly about their desire to strip ChinaTelAmericas of its operating
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`authority. Such statements challenge the Commissioners’ respective abilities to be
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`impartial and otherwise cast aspersions on due process protections for businesses in
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`similar circumstances.66 Coupled with Commission orders demonstrating willful
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`blindness to the many material disputed facts, not only is the risk to ChinaTelAmer-
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`icas great, but so too is the risk to all businesses with protected property interests.
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`Finally, the opportunity for ChinaTelAmericas to be meaningfully heard at a
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`hearing outweighs any burden on the Commission. The Commission’s procedural
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`rules acknowledge that while live hearings may impose burdens, due process is im-
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`portant enough to require a live hearing based on “the subject matter or circum-
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`stances of a particular proceeding, or the parties involved.”67 This is particularly true
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`when there are disputed facts.
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`See 5 U.S.C. § 556(b) (providing that “the taking of evidence …