D.C. Circuit Judges Appear Skeptical of Chinese Video Surveillance Manufacturers

A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit seemed skeptical of oral arguments Thursday that Congress didn’t intend for video surveillance gear from Chinese companies Hikvision and Dahua to be placed on the FCC’s “covered list” and barred from the agency’s equipment authorization program (see 2309210032) when lawmakers added those companies to a list of security threats and separately ordered the FCC not to authorize gear from companies on the list. “We can’t write an opinion that says we think Congress was just kidding,” said Judge Florence Pan.

The companies’ arguments would require the court to rule that Congress made a mistake, said Judge Raymond Randolph. “What do we do when the political branches have come together and decided, ‘those on the covered list shall not have their equipment authorized’?” Judge Patricia Millett asked HWG attorney and former FCC General Counsel Christopher Wright, representing Hikvision. “To rule for you, we’d have to say that they really didn’t mean the consequences of what they said.”

Wright argued that the video surveillance equipment wasn't determined to be dangerous to national security -- unlike routers and other products produced by covered list companies such as Huawei -- and that such equipment isn’t “essential” to the provision of broadband, as required for inclusion on the covered list by the language of the Secure and Trusted Communications Networks Act of 2019.

Hikvision’s and Dahua’s equipment is “improperly on the list,” Wright said. Congress wasn’t even prohibiting federal agencies from buying video surveillance equipment from the companies, he said. Morgan Lewis attorney Russell Blau, representing Dahua, said the FCC’s definition of critical infrastructure that could be threatened by covered list devices was so broad that it incorporated all commercial enterprises, including laundromats.

Millett appeared to agree that video surveillance equipment uses broadband but isn’t essential to providing broadband, and pushed back on FCC Counsel Matthew Dunne's argument that any device that originates or receives information over the internet is essential to providing broadband. “That’s anything that anyone does on their broadband,” Millet said. However, she later conceded that it seemed Congress based its legislation on the same definition espoused by Dunne. “It’s not like it was a 40-page list,” she said to Wright. “How do you assume Congress didn’t know what the composition of the list was?”

If Hikvision’s contention that only ISP equipment such as gateways and routers were intended to be on the covered list is correct, then items such as ZTE-made cellphones that were clearly targeted by Congress couldn’t be included, Wiley attorney Tom Johnson said on behalf of intervenor Motorola. “There's both a public and confidential record talking about how Chinese-state controlled companies must comply with the espionage law ... by building backdoor capabilities into equipment,” said Johnson, who is also a former FCC general counsel. “That's what Congress cared about, your honor.”

“One way we could resolve this case is just to read the Secure Equipment Act as saying there should be no equipment authorizations for people on the list, and these petitioners are on the list,” said Pan during the FCC’s portion of oral argument. Doing so would spare the court from having to research why Hikvision and Dahua were added to the covered list, Pan said. “Then we wouldn't have to get into any of these other statutes and what they say and who should be on the list and who shouldn’t.”

Wright disagreed in his rebuttal. “The easiest way to proceed is to address the threshold issue: determine that video surveillance equipment is simply not essential to the provision of broadband service and that's all you need to decide,” he said. “We as a court need to defer -- this is national security, not our wheelhouse.” Millett told Wright.