USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 1 of 88
`
`NO. 21-1233
`(oral argument not yet scheduled)
`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.
`
`On petition for review from
`the Federal Communications Commission
`
`PETITIONER’S BRIEF
`
`Andrew D. Lipman
`Russell M. Blau
`MORGAN, LEWIS & BOCKIUS LLP
`1111 Pennsylvania Ave., NW
`Washington, D.C. 20004
`T: 202-739-3000
`russell.blau@morganlewis.com
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 2 of 88
`
`i
`CERTIFICATE AS TO PARTIES AND AMICI,
`RULINGS UNDER REVIEW, AND RELATED CASES
`Pursuant to D.C. Circuit Rule 28(a)(1), Petitioner China Telecom
`(Americas) Corporation hereby states as follows:
`
`I.
`
`Parties and amici
`The following are the parties, intervenors, and amici in this Court and
`were the parties, intervenors, and amici to the proceedings before the
`Federal Communications Commission:
`Petitioner: China Telecom (Americas) Corporation
`Respondents: Federal Communications Commission and
`United States of America
`Intervenors: Not applicable
`Amicus curiae: Not applicable
`II. Order on review
`Petitioner seeks review of the opinion and order of the Federal Com-
`munications Commission, dated November 2, 2021, revoking China Tel-
`ecom (Americas) Corporation’s domestic 214 authority and revoking and
`terminating two international Section 214 authorizations.
`
`III. Related cases
`The case on review has not previously been before this Court. China
`Telecom (Americas) Corporation previously petitioned the United States
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 3 of 88
`
`ii
`Court of Appeals for the Fourth Circuit to review the Federal Communi-
`cations Commission’s denial of a hearing in the revocation proceedings at
`issue in this case. On May 10, 2021, the Fourth Circuit dismissed that
`petition because “[t]he order [China Telecom Americas] seeks to appeal
`is neither a final agency action nor an appealable interlocutory or collat-
`eral order.” Case No. 20-2365, Doc. 53.
`Currently pending before this Court as Case Number 21-5215 is
`China Telecom (Americas) Corporation’s appeal of the September 2,
`2021, order and opinion of the United States District Court for the Dis-
`trict of Columbia (Friedrich, J.) granting the United States’ Petition to
`Initiate a Determination that Certain [Foreign Intelligence Surveillance
`Act (“FISA”)] Surveillance Was Lawfully Authorized and Conducted. The
`FISA materials at issue in that appeal informed the Federal Communi-
`cations Commission’s revocation decision at issue in this appeal.
`
`
`
`/s/ Russell M. Blau
`Russell M. Blau
`MORGAN, LEWIS & BOCKIUS LLP
`1111 Pennsylvania Ave., NW
`Washington, D.C. 20004
`T: 202-739-3000
`russell.blau@morganlewis.com
`
`February 1, 2022
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 4 of 88
`
`iii
`CORPORATE DISCLOSURE STATEMENT
`Pursuant to Circuit Rule 28(a)(1)(A) and Federal Rule of Appellate
`Procedure 26.1(a), China Telecom (Americas) Corporation states that it
`is a wholly-owned subsidiary of China Telecom Corporation Limited, a
`corporation whose stock is publicly held. China Telecom Corporation
`Limited is a subsidiary of China Telecommunications Corporation, a
`state-owned enterprise of the People’s Republic of China. China Telecom
`Americas has no other direct or indirect parent companies.
`Pursuant to Circuit Rule 26.1(b), China Telecom Americas states that
`it is an international telecommunications company operating in the
`United States and other countries in the Western Hemisphere. It is a
`Delaware corporation that operates its U.S. business as an independent
`profit-making commercial enterprise.
`
`
`
`/s/ Russell M. Blau
`Russell M. Blau
`MORGAN, LEWIS & BOCKIUS LLP
`1111 Pennsylvania Ave., NW
`Washington, D.C. 20004
`T: 202-739-3000
`russell.blau@morganlewis.com
`
`February 1, 2022
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 5 of 88
`
`iv
`
`TABLE OF CONTENTS
`GLOSSARY ............................................................................................. xii
`JURISDICTION ...................................................................................... xii
`QUESTIONS PRESENTED ..................................................................... 2
`STATUTES AND REGULATIONS .......................................................... 3
`BACKGROUND ........................................................................................ 4
`I.
`Statutory Background ...................................................................... 4
`II. China Telecom Americas’ Section 214 Authority and
`Authorizations .................................................................................. 8
`III. China Telecom Americas’ Longstanding National Security
`Commitments ................................................................................. 10
`IV. The China Mobile Order
`and Team Telecom’s
`Recommendation ............................................................................ 14
`V. The FCC’s Revocation Order .......................................................... 19
`VI.
`Judicial Review .............................................................................. 20
`A. Foreign Intelligence Surveillance Act Appeal ...................... 20
`B. Revocation Appeal ................................................................. 21
`SUMMARY OF ARGUMENT ................................................................. 23
`STANDING ............................................................................................. 26
`ARGUMENT ........................................................................................... 27
`I. China Telecom Americas was entitled to a live or written-record
`hearing, with discovery and a neutral adjudicator, before the FCC
`revoked its common-carrier authorizations ................................... 27
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 6 of 88
`
`v
`
`TABLE OF CONTENTS
`II. China Telecom Americas was due—but did not receive—a
` hearing before a neutral adjudicator ............................................ 35
`A. Mathews Factor #1 – China Telecom Americas’ Interests ... 36
`B. Mathews Factor #2 – Benefits of Added Procedures ............ 39
`C. Mathews Factor #3 – Costs of Additional Procedures ......... 43
`III. The FCC arbitrarily and capriciously revoked China Telecom
`Americas’ Section 214 authorizations............................................ 44
`A. The FCC failed to demonstrate “egregious” misconduct by
`the regulated company .......................................................... 44
`B. The FCC arbitrarily and capriciously accepted unfounded al-
`legations regarding China Telecom Americas’ conduct ....... 52
`i. Executive Branch allegations regarding China
`Telecom Americas’ trustworthiness are inaccurate
`and misleading ............................................................. 53
`ii. China Telecom Americas did not violate the Assur-
`ances ............................................................................. 56
`C. The FCC improperly denied China Telecom Americas an
`opportunity to cure. ............................................................... 61
`CONCLUSION ........................................................................................ 65
`CERTIFICATE OF COMPLIANCE ........................................................ 66
`CERTIFICATE OF SERVICE ................................................................. 67
`STATUTORY AND REGULATORY ADDENDUM ........................ Add. 1
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 7 of 88
`
`TABLE OF AUTHORITIES
`
`vi
`
`Page(s)
`
`CASES
`3883 Conn. LLC v. District of Columbia,
`336 F.3d 1068 (D.C. Cir. 2003) ..................................................... 37, 38
`Aera Energy LLC v. Salazar,
`642 F.3d 212 (D.C. Cir. 2011) ............................................................. 41
`Air N. Am. v. DOT,
` 937 F.2d 1427 (9th Cir. 1991) ............................................................. 64
`
`Barry v. Barchi,
`443 U.S. 55 (1979) ............................................................................... 38
`Bus. Options, Inc.,
`18 FCC Rcd. 6881 (2003) .................................................................... 47
`Butz v. Economou,
`438 U.S. 478 (1978) ............................................................................. 41
`CCN, Inc., et al.,
`13 FCC Rcd. 13599 (1998) .................................................................. 46
`China Mobile Int’l (USA) Inc.,
`34 FCC Rcd. 3361 (May 10, 2019) ................................................ 14, 49
`China Unicom (Americas) Operations Ltd.,
` Order on Revocation, GN Docket No. 20-110,
`
`ITC-214-20020728-00361, ITC-214-20020724-00427,
` FCC 22-9 (adopted Jan. 27, 2022; not yet released). ......................... 50
`
`Colo. Interstate Gas Co. v. FERC,
`850 F.2d 769 (D.C. Cir. 1988) ............................................................. 35
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 8 of 88
`
`TABLE OF AUTHORITIES
`Concrete Pipe & Prods. of Cal., Inc. v. Constr.
`Laborers Pension Tr. for S. Cal.,
`508 U.S. 602 (1993) ............................................................................. 41
`Coosemans Specialties, Inc. v. Dep’t of Agric.,
` 482 F.3d 560 (D.C. Cir. 2007) ............................................................. 62
`
`vii
`
`Dep’t of Homeland Sec. v. Regents of Univ. of Ca.,
`140 S. Ct. 1891 (2020) ......................................................................... 33
`Dixon v. 80 Pine St. Corp.,
` 516 F.2d 1278, 1281 (2d Cir. 1975)..................................................... 51
`
`Enloe Med. Ctr. v. NLRB,
`433 F.3d 834 (D.C. Cir. 2005) ............................................................. 43
`FCC Enf’t Advisory,
`26 FCC Rcd. 16411 (2011) .................................................................. 46
`FCC v. Fox Television Stations, Inc.,
`556 U.S. 502 (2009) ............................................................................. 33
`FCC v. Fox Television Stations, Inc.,
`567 U.S. 239 (2012) ............................................................................. 40
`Fed. Mar. Comm’n v. S.C. State Ports Auth.,
`535 U.S. 743 (2002) ............................................................................. 41
`Finer Foods Sales Co. v. Block,
` 708 F.2d 774 (D.C. Cir. 1983) ............................................................. 62
`
`Fried v. Hinson,
`78 F.3d 688 (D.C. Cir. 1996) ............................................................... 38
`Green Country Mobilephone, Inc. v. FCC,
`765 F.2d 235 (D.C. Cir. 1985) ............................................................. 31
`Hutto Stockyards, Inc. v. Dep’t of Agric.,
` 903 F.2d 299 (4th Cir. 1990) ......................................................... 62, 63
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 9 of 88
`
`TABLE OF AUTHORITIES
`
`viii
`
`In re Al-Nashiri,
`921 F.3d 224 (D.C. Cir. 2019) ............................................................. 41
`Int’l Settlements Policy Reform,
`27 FCC Rcd. 15521 (2012) .................................................................. 45
`Kurtis J. Kintzel et al.,
`22 FCC Rcd. 17197 (2007) .................................................................. 46
`Lone Mountain Processing, Inc. v. Sec’y of Lab.,
`709 F.3d 1161 (D.C. Cir. 2013) ........................................................... 33
`Lopez v. FAA,
`318 F.3d 242 (D.C. Cir. 2003) ............................................................. 37
`Lujan v. Defs. of Wildlife,
`504 U.S. 555 (1992) ............................................................................. 26
`Marpin Telecoms. & Broad. Co. Ltd. v. Cable & Wireless, Inc.,
`18 FCC Rcd. 508 (2003) .......................................................... 25, 45, 46
`* Mathews v. Eldridge,
`424 U.S. 319 (1976) ....................................................................... 24, 36
`Mullane v. Cent. Hanover Bank & Tr. Co.,
`339 U.S. 306 (1950) ............................................................................. 16
`Nader v. FAA,
` 440 F.2d 292 (D.C. Cir. 1971) ............................................................. 64
`
`Nat’l Ass’n of Regul. Util. Comm’rs v. FCC,
` 525 F.2d 630 (D.C. Cir. 1976), cert. denied, 425 U.S. 992 (1976) ........ 4
`
`NOS Commc’ns, Inc.,
`18 FCC Rcd. 6952 (2003) .................................................................... 47
`Pac. Gas & Elec. Co. v. FERC,
`306 F.3d 1112 (D.C. Cir. 2002) ........................................................... 39
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 10 of 88
`
`ix
`
`TABLE OF AUTHORITIES
`Pac. N.W. Newspaper Guild, Local 82 v. NLRB,
`877 F.2d 998 (D.C. Cir. 1989) ............................................................. 51
`Physicians for Soc. Resp. v. Wheeler,
`956 F.3d 634 (2020) ............................................................................ 34
`Procedural Streamlining of Admin. Hearings,
` EB Docket No. 19-214, Report and Order,
` 35 FCC Rcd. 10729 (Sept. 14, 2020) ................................................. 7, 8
`
`Propert v. District of Columbia,
`948 F.2d 1327 (D.C. Cir. 1991) ........................................................... 24
`Protecting Consumers from Unauthorized Carrier
`Changes & Related Unauthorized Charges,
`33 FCC Rcd. 5773 ............................................................................... 45
`Publix Network Corp.,
`17 FCC Rcd. 11487 (2002) .................................................................. 47
`Ramaprakash v. FAA,
`346 F.3d 1121 (D.C. Cir. 2003) ........................................................... 52
`Rules and Policies on Foreign Participation in the
`
`U.S. Telecommunications Market;
` Market Entry and Regulation of Foreign-Affiliated Entities,
` 12 FCC Rcd. 23891 (1997) .................................................................. 45
`
`Sandwich Isles Commc’ns, Inc.,
`31 FCC Rcd. 12947 ............................................................................. 45
`Ward v. Monroeville,
` 409 U.S. 57 (1972) ............................................................................... 41
`
`Westar Energy, Inc. v. FERC,
`473 F.3d 1239 (D.C. Cir. 2007) ........................................................... 31
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 11 of 88
`
`x
`
`TABLE OF AUTHORITIES
`STATUTES
`5 U.S.C. § 558(c) ................................................................................ 61, 62
`5 U.S.C. § 706(2)(A) ................................................................................. 27
`28 U.S.C. § 2342(1) .................................................................................... 1
`* 47 U.S.C. § 214(a) ....................................................................... 4, 38, 49
`* 47 U.S.C. § 214(b) ................................................................................... 5
`47 U.S.C. § 214(d) ...................................................................................... 5
`* 47 U.S.C. § 312(c) ....................................................................... 6, 16, 23
`* 47 U.S.C. § 312(d) ....................................................................... 6, 23, 25
`47 U.S.C. § 402(b)(2).................................................................................. 1
`OTHER AUTHORITIES
`47 C.F.R § 0.51(t) ........................................................................... 7, 28, 34
`47 C.F.R § 0.91(q) .......................................................................... 7, 28, 34
`* 47 C.F.R. § 1.91 ......................................................... 6, 16, 23, 27, 28, 30
`47 C.F.R. § 1.91(b) ..................................................................................... 6
`47 C.F.R. § 1.91(d) ............................................................................... 6, 49
`47 C.F.R. § 1.91(d)(1) ............................................................................... 25
`* 47 C.F.R. § 1.92 ............................................................... 6, 23, 27, 28, 30
`47 C.F.R. § 1.92(a). .............................................................................. 6, 30
`47 C.F.R. § 1.201–1.364 ............................................................................. 6
`47 C.F.R. § 1.370 ....................................................................................... 6
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 12 of 88
`
`xi
`TABLE OF AUTHORITIES
`47 C.F.R. § 1.372(a) ................................................................................... 7
`47 C.F.R. §§ 1.311–1.325 ........................................................................... 7
`47 C.F.R. § 63.01 ....................................................................................... 5
`Exec. Order No. 13913,
` 85 Fed. Reg. 19643 .............................................................................. 11
`
`Letter Brief, Pacific Networks & ComNet (USA) LLC,
` GN Docket No. 20-111; ITC-214-20090105-00006;
`
`ITC-214-20090424-00199 (Jan. 13, 2022) .......................................... 42
`
`Notice of Proposed Rulemaking,
` Procedural Streamlining of Admin. Hr’gs,
` 34 FCC Rcd. 8341 (2019) .................................................. 5, 7, 8, 23, 28
`
`Authorities marked with an asterisk (*) are chiefly relied on.
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 13 of 88
`
`xii
`
`GLOSSARY
`
`administrative law judge
`
`Administrative Procedure Act, 5 U.S.C.
`§§ 551–559
`
`Department of Homeland Security
`
`Department of Justice
`
`Federal Bureau of Investigation
`
`Federal Communications Commission
`
`Foreign Intelligence Surveillance Act,
`50 U.S.C. §§ 1801 et seq.
`
`ALJ
`
`APA
`
`DHS
`
`DOJ
`
`FBI
`
`FCC
`
`FISA
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 14 of 88
`
`1
`
`JURISDICTION
`This Court has jurisdiction over China Telecom Americas’ petition for
`review under 28 U.S.C. § 2342(1) and 47 U.S.C. § 402(b)(2). The FCC
`adopted the order on review on October 26, 2021, and released it on No-
`vember 2, 2021 (JA__ (Revocation Order)). China Telecom Americas
`timely filed its petition for review on November 15, 2021 (JA __ (Pet.)).
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 15 of 88
`
`2
`
`QUESTIONS PRESENTED
`1. Before revoking China Telecom Americas’ common-carrier
`authorizations, did the FCC arbitrarily and capriciously re-
`fuse to hold a live hearing—with discovery and a neutral ad-
`judicator—despite having held such hearings in every past
`contested revocation proceeding?
`2. Did China Telecom Americas have a due-process right to
`an evidentiary hearing before a neutral adjudicator, where
`revocation of its licenses significantly impaired its ability to
`do business, issues of motive and intent were central to the
`FCC’s decision, and the additional burdens of providing a
`hearing would have been relatively modest?
`3. Was the FCC’s revocation of China Telecom Americas’ do-
`mestic and international common-carrier authorizations
`unlawful, arbitrary, capricious, and not supported by
`substantial evidence?
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 16 of 88
`
`STATUTES AND REGULATIONS
`The text of relevant statutes and regulations are set forth in an Ad-
`dendum at the end of this brief.
`
`3
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 17 of 88
`
`4
`
`I.
`
`BACKGROUND
`Statutory Background
`Under Section 214(a) of the Communications Act of 1934, 47 U.S.C.
`§ 214(a), a carrier needs a certificate of public convenience and necessity
`in order to construct, extend, acquire, or operate a line and to engage in
`transmission through a line—what are commonly known as common-car-
`rier services.1 The FCC administers Section 214, and the agency differ-
`entiates domestic Section 214 authorizations (to provide services between
`points within the United States) and international Section 214 authori-
`zations (to provide services between the United States and a point out-
`side the United States).
`An important difference between the agency’s regulation of domestic
`and international Section 214 authorizations is in how carriers obtain
`them. By FCC rule, carriers have blanket authority to provide domestic
`common-carrier services subject to standard terms and conditions. See
`
`1 As this Court has explained, a “carrier” for purposes of the Com-
`munications Act is a common carrier—i.e., a provider that “under-
`takes to carry for all people indifferently.” Nat’l Ass’n. of Regul.
`Util. Comm’rs v. FCC, 525 F.2d 630, 641 (D.C. Cir. 1976), cert.
`denied, 425 U.S. 992 (1976).
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 18 of 88
`
`5
`BACKGROUND
`47 C.F.R. § 63.01. By contrast, carriers must apply individually for inter-
`national Section 214 authorizations. See 47 C.F.R. § 63.18.
`On occasion, the FCC has revoked a carrier’s Section 214 authoriza-
`tion. In the FCC’s view, it may do so if the agency finds that allowing the
`carrier to continue providing domestic and/or international common-car-
`rier services is no longer in the public interest. See JA__ (Revocation Or-
`der ¶4). A focal point of this case is what kind of process the FCC must
`follow when revoking a Section 214 authorization.
`The FCC recognizes that revoking a Section 214 authorization re-
`quires hearings in many situations. See Notice of Proposed Rulemaking,
`Procedural Streamlining of Admin. Hr’gs, 34 FCC Rcd. 8341 ¶¶ 3, 4
`(2019) (“Streamlining Notice”) (citing 47 U.S.C. §§ 214(b), (d)). But Sec-
`tion 214 does not define precisely what kind of hearing the FCC must
`hold—that is, what procedures apply or what form the hearing must take.
`Congress left it for the FCC to implement Section 214’s hearing require-
`ment.
`Historically, the FCC has held Section 214 authorization revocation
`hearings the same way the agency holds hearings under Section 312 of
`the Act. See Streamlining Notice, 34 FCC Rcd. 8341 ¶ 1. In Section 312,
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 19 of 88
`
`6
`BACKGROUND
`Congress defined precisely what kind of hearing the FCC must hold be-
`fore revoking radio-station licenses. See 47 U.S.C. § 312(c), (d). Though
`neither Section 214 nor Section 312 requires the FCC to hold Section 214
`revocation hearings in accordance with Section 312, neither section for-
`bids it; and it is eminently reasonable for the agency, instead of inventing
`hearing procedures just for Section 214, to consider and follow Congress’s
`clearly articulated vision for hearing procedures as expressed in Section
`312.
`And so, for decades, the FCC has borrowed Section 312’s hearing
`rules—embodied in regulations codified at 47 C.F.R. §§ 1.91, 1.92—to
`govern Section 214 revocation hearings. See JA__ (Response, at 6 n.5 (col-
`lecting cases)). Under Section 1.91(b), a revocation is automatically set
`for a hearing unless the licensee waives the hearing pursuant to Section
`1.92. See 47 C.F.R. §§ 1.91(b), 1.92(a). If the licensee does not waive a
`hearing, a hearing is held subject to procedures detailed in subpart B of
`the FCC’s rules. Seeid. § 1.91(d) (cross-referencing subpart B); see also
`47 C.F.R. §§ 1.201–1.364 (subpart B rules). Such hearings can be in per-
`son or “on a written record,” id. § 1.370, but that does not mean that an-
`ything goes. Under the FCC rules, whether a hearing is held in person or
`on a written record, the licensee is entitled to a “discovery period,” id.
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 20 of 88
`
`7
`BACKGROUND
`§ 1.372(a), during which the licensee can take depositions and exercise
`other discovery rights before the FCC decides whether to revoke the li-
`cense, see id. §§ 1.311–1.325.
`Like the statute they implement (Section 312), Sections 1.91 and 1.92
`do not, by their express terms, apply to Section 214 revocation hearings.
`But precedent and other regulations confirm that the FCC has applied
`Sections 1.91 and 1.92 to Section 214 revocation hearings.
`Recently, in fact, the agency proposed and finalized rules to “stream-
`line” administrative hearings required under the Communications Act.
`Procedural Streamlining of Admin. Hearings, EB Docket No. 19-214, Re-
`port and Order, 35 FCC Rcd 10729 ¶ 1 (Sept. 14, 2020) (“Streamlining
`Order”). The upshot of these new rules is to decrease the number of live
`hearings and increase use of hearings on a written record for a variety of
`purposes, including Section 214. See id. ¶¶ 1–2, 14. The new rules do not
`purport to eliminate hearings before the FCC orders a carrier to discon-
`tinue service under Section 214. On the contrary, the FCC acknowledged
`its past practice of holding Section 214 revocation hearings in accordance
`with Sections 1.91 and 1.92. See Streamlining Notice, 34 FCC Rcd. 8341
`¶ 4 n.16. What’s more, two of the FCC’s new rules, 47 C.F.R §§ 0.51(t),
`0.91(q), are based on that practice: the two rules empower two bureaus
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 21 of 88
`
`8
`BACKGROUND
`to revoke Section 214 authorizations “in cases where the Chief Adminis-
`trative Law Judge, or the Presiding Officer designated, has issued a cer-
`tification order to the Commission pursuant to section 1.92(c) of our rules
`that the carrier has waived its opportunity for hearing under that sec-
`tion.” Streamlining Notice, 34 FCC Rcd. 8341 ¶ 12 (emphasis added)
`(quotation omitted); see Streamlining Order, 35 FCC Rcd. at 10741 n.106,
`10743–44. Those two rules make sense only if, and only because, carriers
`with Section 214 authorizations are entitled, pursuant to Section 1.91, to
`a live or written-record hearing, complete with discovery and decision by
`an ALJ, before the FCC revokes those authorizations.
`
`II. China Telecom Americas’ Section 214 Authority and
`Authorizations.
`China Telecom Americas is an American company, incorporated in
`Delaware and headquartered in Virginia, that has provided telecommu-
`nications, information, and related services in the United States for al-
`most twenty years. JA__ (China Telecom Americas’ Response to Order to
`Show Cause (“Response”) Ex. 1). Until January 3, 2022, China Telecom
`Americas also provided domestic and international common-carrier ser-
`vices by reselling mobile service as a Mobile Virtual Network Operator.
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 22 of 88
`
`9
`BACKGROUND
`JA__ (Id. Exs. 6, 8). In accordance with Section 214, China Telecom Amer-
`icas had a domestic Section 214 authorization (the blanket authorization
`issued under FCC regulations) and two international Section 214 author-
`izations.2
`The FCC issued the first international Section 214 authorization to
`China Telecommunications Corporation, China Telecom Americas’ indi-
`rect corporate parent company, on July 20, 2001. JA__ (Order to Show
`Cause ¶ 3). Then, as now, China Telecommunications Corporation was a
`state-owned enterprise of the People’s Republic of China. The initial au-
`thorization permitted China Telecommunications Corporation to provide
`communications services between the United States and all permissible
`foreign points, except China. In 2002, China Telecommunications Corpo-
`ration requested approval to assign that international authorization to
`China Telecom Americas.3 The FCC’s International Bureau approved the
`
`2 Although some of China Telecom Americas’ telecommunication
`capabilities are provided on a private-carrier basis and do not
`require Section 214 authority, its resold mobile services to
`consumers as a Mobile Virtual Network Operator were provided
`on a common-carrier basis.
`3 At the time, China Telecom Americas went by the name “China
`Telecom (USA) Corporation”—so both the June 7, 2002, assign-
`ment and August 21, 2002, issuance of Section 214 authorizations
`(footnote continued on next page)
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 23 of 88
`
`10
`BACKGROUND
`assignment, and China Telecommunications Corporation assigned the
`authorization to China Telecom Americas on June 7, 2002. JA__ (Id. ¶ 3).
`The FCC granted China Telecom Americas a second international
`Section 214 authorization on August 21, 2002. JA__ (Id.) That authoriza-
`tion permitted China Telecom Americas to provide telecommunications
`services between the United States and China, subject to additional reg-
`ulatory oversight to prevent anticompetitive conduct on the United
`States–China route. China Telecom Americas continued to operate using
`both its international and domestic Section 214 authorizations.
`
`III. China Telecom Americas’ Longstanding National
`Security Commitments.
`On July 12, 2007, China Telecommunications Corporation trans-
`ferred all of its stock in China Telecom Americas to China Telecom Cor-
`poration Limited, a publicly-traded company in which China Telecommu-
`
`listed China Telecom (USA) Corporation as the authorization
`holder. After the company changed its name in 2007, the FCC up-
`dated its records to reflect that “China Telecom (Americas) Corpo-
`ration” holds the authorizations. Id. ¶ 4. For consistency, this brief
`only refers to China Telecom Americas.
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 24 of 88
`
`11
`BACKGROUND
`nications Corporation holds a majority ownership interest. China Tele-
`com Americas notified the FCC of this pro forma transfer, pursuant to
`Section 63.24(f) of the FCC’s rules. See JA__ (id.).
`After the company filed this notice with the FCC, a federal inter-
`agency task force requested that the company agree to certain commit-
`ments as a condition of allowing the transfer of ownership.4 On July 17,
`2007, China Telecom Americas and the federal agencies entered into a
`Letter of Assurances (“Assurances”). See JA__ (Assurances). The Assur-
`ances focused on ensuring that U.S. law enforcement would have access
`to China Telecom Americas’ subscriber information for properly author-
`ized wiretaps, records of called and calling numbers, or other lawful de-
`mands. Relevant here, China Telecom Americas agreed not to destroy its
`
`4 This inter-agency task force, called “Team Telecom,” was formed
`in 1997. In 2007, it was composed of representatives from the De-
`partment of Justice (“DOJ”), the Homeland Security (“DHS”), and
`the Federal Bureau of Investigation (“FBI”). It currently includes
`representatives from DOJ, DHS, and the Defense, State, and Com-
`merce Departments, as well as the United States Trade Repre-
`sentative. In April 2020, then-President Trump issued an execu-
`tive order converting this informal group into a formally chartered
`entity, the Committee for the Assessment of Foreign Participation
`in the United States Telecommunications Services Sector. See
`Exec. Order No. 13913, 85 Fed. Reg. 19643–44. For purposes of
`this appeal, we refer to Team Telecom and its successor Commit-
`tee as “Team Telecom.”
`
`

`

`USCA Case #21-1233 Document #1933234 Filed: 02/01/2022 Page 25 of 88
`
`12
`BACKGROUND
`subscriber records and to take “all practicable measures to prevent un-
`authorized access to, or disclosure of, the content of its subscriber records
`in violation of any U.S. Federal, state, or local laws or the commitments
`set forth in [the Assurances].” JA__ (Id. at 2). The Assurances also pro-
`hibited China Telecom Americas from releasing data to a foreign govern-
`ment without first providing notice to relevant U.S. agencies. JA__ (Id.
`at 3).
`After Team Telecom reviewed the Assurances for national security
`concerns, the DHS, with the concurrence of DOJ and the FBI, filed a Pe-
`tition to Adopt Conditions to Authorizations and Licenses with the FCC.
`JA__ (Order to Show Cause ¶ 4 (citing Department of Homeland Security,
`Department of Justice, Federal Bureau of Investigation, Petition to
`Adopt Conditions to Authorizations and Licenses, File No. I