FIRRMA Takes Form as CFIUS Enacts a New Pilot Program Targeting “Critical Technologies”

Brian WeimerReid WhittenDrew SvorEnumale AgadaBy Brian Weimer, Reid Whitten, Drew Svor and Enumale Agada on Posted in FCC
  • On October 10, 2018, the Committee on Foreign Investment in the United States put into effect the first mandatory filing requirement ever imposed by CFIUS. The Department of Treasury’s summary of the Pilot Program is available here.
  • Effective November 10, 2018, CFIUS will require reviews of critical technology investments – including certain non-controlling investments – from any country.
  • A failure to file notice or a new short form declaration to CFIUS may result in a civil monetary penalty up to the value of the transaction.
  • The requirements will not apply to any transaction that is completed prior to November 10, 2018 or any transaction for which the material terms were established prior to October 11, 2018.

Background

On August 13, 2018, President Trump signed FIRRMA into law. FIRRMA is a transformational expansion of the authority of the Committee on Foreign Investment in the United States (CFIUS) to review certain transactions that previously eluded the Committee’s jurisdiction (discussed in our blog, here). Congress left many critical aspects of the FIRRMA framework to be addressed through regulations promulgated by the Department of Treasury. Although we do not expect final rules to be forthcoming until late 2019 or early 2020, Congress empowered the Department of Treasury to “test-drive” parts of FIRRMA through Pilot Programs. Those programs can be implemented simply, taking effect 30 days after publication of the program requirements in the Federal Register. The adoption and implementation of the Pilot Program for critical technologies represents the Department of Treasury’s first attempt to implement substantive parts of FIRRMA prior to issuing formal regulations. Continue Reading

Expanding CFIUS: New Law Strengthens And Slows Investment Review

Reid WhittenBy Reid Whitten on Posted in FCC

This week, you have likely heard about FIRRMA, the Foreign Investment Risk Review Modernization Act, the law that will expand CFIUS. We have written about a number of aspects of the new law as it was being made, including the following:

In this alert, we provide a quick overview of the major points of that law. Continue Reading

Commerce Prioritizes Earth Selfies as It Seeks to Improve Remote Sensing Licensing

Brian WeimerAaron ShourieDrew SvorEamon TierneyBy Brian Weimer, Aaron Shourie, Drew Svor and Eamon Tierney on Posted in FCC

On June 25, 2018, the Department of Commerce (“Commerce”) released an advance notice of rulemaking through the National Oceanic and Atmospheric Administration (“NOAA”). As an initial step before Commerce drafts proposed regulations and issues a Notice of Proposed Rulemaking, the notice seeks input from stakeholders on key issues relating to potential revisions to the regulations currently governing how NOAA[1] administers licensing for commercial remote sensing space systems. The last update to the relevant regulations was in 2006 and significant technological developments, new business models, and increased foreign competition require regulatory updates in order to facilitate continued growth and U.S. leadership in this industry. Continue Reading

Lucia Is Likely To Have Little Impact On Waning FCC Adjudications

Paul WernerImad MatiniBy Paul Werner and Imad Matini on Posted in FCC

During its most recent Term, the Supreme Court held in Lucia v. SEC that the administrative law judges (“ALJs”) that preside over adjudications at the Securities and Exchange Commission (“SEC”) are “Officers of the United States” who must be appointed pursuant to the Appointments Clause of the Constitution. 138 S.Ct. 2044, 2055 (2018). This holding necessarily calls into question the validity of the appointments of ALJs across diverse federal administrative agencies and their rulings. In light of this anticipated fall out, the Trump Administration moved swiftly to issue an Executive Order retooling the hiring process for ALJs. But whether the Court’s holding in Lucia will impact adjudications before the Federal Communications Commission (“Commission”) remains to be seen. Continue Reading

FCC Seeks “Large Step” Toward Advancing Broadband Infrastructure Goals With Draft One-Touch Make-Ready Order

Dave ThomasPaul WernerAaron GeorgeRay RutngamlugAbraham ShanedlingBy Dave Thomas, Paul Werner, Aaron George, Ray Rutngamlug and Abraham Shanedling on Posted in FCC

Promoting infrastructure investment and broadband deployment has been a top priority for Chairman Ajit Pai’s FCC. On July 12, 2018, the Chairman took a significant stride in advancing his agenda by releasing a draft report and order that would enact, among other things, a “one-touch make-ready” (OTMR) process for most third-party communications-provider attachments to utility poles. Continue Reading

Back To The Future: FCC Returns To Light Touch Regulation Of The Internet

Aaron GeorgePaul WernerImad MatiniBy Aaron George, Paul Werner and Imad Matini on Posted in FCC

This week, the Federal Communications Commission’s (“FCC’s”) Restoring Internet Freedom Order took effect, rolling back the public-utility style regulation of Internet service providers (“ISPs”) pursuant to title II of the Communications Act, imposed during the prior administration by the FCC’s 2015 Open Internet Order (“2015 Order”). The agency’s return to a light touch regulatory approach has sparked public debate since FCC Chairman Ajit Pai proposed it more than a year ago. And while the FCC’s action is already the subject of several judicial challenges consolidated in the D.C. Circuit, a number of states have also sought to impose their own state-specific net neutrality legislation. But it remains to be seen whether individual states can impose net neutrality obligations on ISPs, particularly in light of the FCC’s invocation of its preemption authority in the Restoring Internet Freedom Order. Continue Reading

Once Bitten, Twice Shy: FCC Revisits Its Telemarketing Regulations In Light Of The DC Circuit’s Decision Striking Down Core Requirements

Brian WeimerPaul WernerHannah WiggerBy Brian Weimer, Paul Werner and Hannah Wigger on Posted in FCC

On March 16, 2018, the United States Court of Appeals for the District of Columbia Circuit issued its long awaited decision in ACA International v. FCC, in which a group of petitioners across a spectrum of industries sought review of various aspects of the Federal Communications Commission’s (FCC’s) 2015 Omnibus Declaration Ruling and Order (2015 Order). The controversial 2015 Omnibus Order adopted further regulations to implement the Telephone Consumer Protection Act (TCPA) – which was enacted more than twenty-five years ago to address certain issues with automated telemarketing calls. Continue Reading

FCC Sets Sights on China

Brian WeimerDrew SvorEamon TierneyBy Brian Weimer, Drew Svor and Eamon Tierney on Posted in FCC

As yet another example of the U.S. government’s ongoing concerns about the potential vulnerability of U.S. telecommunications networks and supply chains, the FCC recently released a Notice of Proposed Rulemaking (NPRM) proposing to prohibit the use of funds disbursed from the Universal Services Fund (USF) to purchase equipment or services from any providers posing a national security threat to the U.S. The USF distributes funds and subsidies to companies who provide service to unserved and underserved locations and low-income consumers. The NPRM dovetails with recent governmental actions targeting perceived Chinese threats to U.S. telecommunications infrastructure, including the passage of the National Defense Authorization Act (NDAA) for Fiscal Year 2018 (which prohibits the Department of Defense from using the equipment or services of certain Chinese telecommunications companies), the Committee on Foreign Investment in the United States’ (CFIUS) blocking of chipmaker Broadcom’s hostile takeover bid for Qualcomm, and the Department of Commerce’s denial of export privileges against a Chinese telecommunications manufacturer for seven years. It also precedes a recent report by the Wall Street Journal on May 2, 2018 detailing the possibility of executive action by the Trump administration to restrict Chinese companies’ ability to sell telecommunications equipment in the U.S. Chinese companies have already taken action as a result of this increased focus on Chinese telecommunications equipment, including one firm’s request for a stay of a U.S. order banning American companies from selling to the firm. Continue Reading

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