FCC Further Limits Foreign Companies from US Telecommunications Markets

Commission Adds New Names to Its “Covered List” of Services and Equipment That Pose an Unacceptable Risk to US National Security and Its People

The Federal Communications Commission (FCC) recently added Pacific Networks Corp. (PacNet) and its wholly owned subsidiary, ComNet (USA) LLC (ComNet), and China Unicom (Americas) Operations Limited (China Unicom) to the list of foreign equipment and services banned from use in domestic communication networks. Following section 2 of the Secure and Trusted Communications Networks Act (Secure Networks Act), the executive branch identified these entities as posing unacceptable risks to national security for being “subject to the exploitation, influence and control of the Chinese government.”

For PacNet and ComNet, the FCC expressed concern with the potential “exploitation by the Chinese government to conduct or to increase economic espionage and collect intelligence against the United States, or otherwise provide a strategic capability to target, collect, alter, block, and re-route network traffic.” For China Unicom, the FCC noted that the company’s operations could “facilitate Chinese cyber activities including economic espionage, disruption and misrouting of American communications traffic, and access to US records and other sensitive data.”

Potential Impacts

Remember, if your company obtains any equipment or services on or after Saturday, November 19, 2022, from any of the newly designated entities on the Covered List, the new designations might affect your business in several ways. For example, the FCC prohibits using federal subsidies (USF, ACAM, etc.) to purchase, rent, or obtain any covered communications equipment or services published on the list. Another potential impact concerns the FCC’s annual Supply Chain reporting and certification filing. Companies using banned equipment or services must include this information with their annual certification. Finally, should Congress appropriate additional funding, equipment provided by these designated companies may be eligible for removal, replacement, and disposal under the FCC’s “rip and replace” program.

Restrictions apply to all subsidiaries and affiliates of these newly listed entities. If you want to learn more or would like help navigating the Covered List and the FCC’s requirements, please contact JSI’s Supply Chain expert Manager Jon Sessums.