A common concern of telecommunications companies, their investors, and their counsel is that the Team Telecom process is unduly long—especially compared with the analogous process for the Committee on Foreign Investment in the United States (CFIUS), which tends to be shorter.
This concern was often directed partner David Plotinsky’s way both during his time at the US Department of Justice (DOJ) running the office that handles both Team Telecom and CFIUS and during his past year in private practice when representing clients whose ability to get deals done has been hampered by the Team Telecom process.
In this report, David proposes select targeted reforms to the Team Telecom process that, if adopted by the government, would streamline the procedure for transactions that are unlikely to pose a risk to national security and law enforcement interests while simultaneously preserving the government’s ability to fully protect those interests.
The need to streamline the Team Telecom process is likely about to become even more urgent. On March 30, 2023, the Federal Communications Commission (FCC) issued a notice of proposed rulemaking (NPRM) that, among other things, seeks comments on potential new rules that would require all holders of international Communications Act Section 214 authorizations—regardless of whether such holders currently have foreign ownership—to undergo a periodic review and renewal process conducted by the FCC in close consultation with Team Telecom.
It seems likely the NPRM will receive support from the FCC commissioners, and such rules would presumably lead to a significant increase in Team Telecom reviews as well as increased deal risk as licensees and investors will face heightened regulatory uncertainty not just at the application stage, but also in perpetuity.
This would create additional burdens for both the government and industry. Therefore, the time is ripe to discuss whether these additional burdens could be offset, at least to some degree, by separate efforts to streamline the Team Telecom process where possible.