Expanding export administration regulation limits to further control foreign shipments to Huawei would have a “dramatic” impact on international supply chains, said Kevin Wolf, a trade lawyer with Akin Gump. The actions, which the Commerce Department is considering (see 1912110039), include expanding the direct product rule and broadening the de minimis rule. “This is a really, really big deal,” said Wolf Friday in Boston on a Massachusetts Export Center panel. “The collateral, psychological effect of this, I fear, is really going to be quite dramatic.” The changes could apply to foreign-made items that contain U.S.-origin content not controlled for national security reasons. They wouldn't apply to dual-use goods and sensitive technologies, just consumer goods, Wolf said. The rule may apply to “wholly formed made items that no other country controls, creating a jurisdictional rule for foreign companies” when selling to Huawei that would likely be difficult to comply with, he said. The rule would make dealing with foreign-made U.S. content and technology “very frustrating and difficult for foreign companies,” Wolf said, which may have a ripple effect.
Country of origin cases
Senate Majority Leader Mitch McConnell, R-Ky., set a Monday cloture vote on the FY 2020 National Defense Authorization Act (S-1790), which includes language targeting Chinese telecom equipment manufacturers Huawei and ZTE. The House approved the measure Wednesday 377-48. The House and Senate Armed Services committees released the conference text earlier this week after months of work to blend (see 1907220053) the Senate and House-passed (HR-2500) measures. The conference NDAA includes a modified version of House-side anti-Huawei language originally sought by Rep. Mike Gallagher, R-Wis., that would modify conditions for the Commerce Department to lift the Bureau of Industry and Security’s addition of Huawei to its entity list (see 1906190054). It would require Huawei to prove it “sufficiently resolved or settled” supply chain security issues that led to its inclusion on the BIS entity list (see 1905160081). Commerce has since approved export licenses (see 1911210027) for U.S. companies to have their products included in Huawei's equipment. The bill also includes Gallagher’s proposal to direct the president to report to Congress on ZTE's compliance with a 2018 agreement that lifted Commerce's ban on U.S. companies selling telecom software and equipment to ZTE (see 1807130048). The measure includes a Senate-cleared proposal from Intelligence Committee Chairman Richard Burr, R-N.C., and Vice Chairman Mark Warner, D-Va., that would require the director of national intelligence report the extent “global and regional adoption” of foreign-made 5G technology affects U.S. national security. The study would look at how the nation's “strategy to reduce foreign influence and political pressure in international standard-setting bodies” could help mitigate the threat. The NDAA includes language from the Authenticating Local Emergencies and Real Threats (Alert) Act, which would give the federal government sole authority to issue missile threat alerts and preempt state and local governments' role (see 1802070052). Senate Communications Subcommittee ranking member Brian Schatz, D-Hawaii, filed the bill in response to the January 2018 false missile emergency alert in Hawaii (see 1801160054). NDAA conferees agreed to remove Senate-cleared language telling DOD to work with the FCC and NTIA to establish a spectrum sharing R&D program. House Commerce Committee ranking member Greg Walden, R-Ore., and others raised concerns about the language because they believe it could undermine NTIA’s role in making spectrum allocation decisions for the federal government (see 1909180048). The conference text also doesn’t include House-cleared language from the 911 Supporting Accurate Views of Emergency Services (Saves) Act. HR-1629/S-1015 would change the federal government's classification of public safety call-takers and dispatchers to "protective service occupations" (see 1904050054).
Don't expect material changes to a draft remand and declaratory ruling on the VoIP symmetry rule when commissioners vote at Thursday's meeting, FCC officials said this week. Over-the-top VoIP providers disagree with national interexchange carriers about whether and how the former should be compensated for terminating calls they originate (see 1912050034). The agency ruled on functional equivalency for VoIP services in 2015, allowing them to be compensated for certain end-office billing elements for OTT or VoIP-originated traffic, with some exceptions (see 1502120030). David Aldworth, CEO of Teliax, said his company was in litigation with a national IXC over related tariff disputes after that. Courts referred the proceeding back to the FCC as a matter of primary jurisdiction. IXCs have dealt in self-help for years and chose not to pay end-office bills as they awaited the next decision, Aldworth said. If there's a silver lining in the declaratory ruling, even if commissioners side with IXCs, Aldworth said, it's that "if there is retroactivity, there are not a whole lot of refunds to be paid" from VoIP providers to IXCs because the IXCs hadn't been paying the OTT providers for call terminations. The draft addresses a CenturyLink petition (see 1805180073). CenturyLink, both an IXC and a VoIP services provider, argues the draft "is confused when it asserts that its approach better 'promotes competition in the voice marketplace' than the rule endorsed in 2015."
Senate Republicans are eager to pass the U.S.-Mexico-Canada Agreement, despite reservations about including language shielding the tech industry from content liability. House Speaker Nancy Pelosi, D-Calif., announced an agreement with the White House on USMCA Tuesday (see 1912100012). Senate Majority Leader Mitch McConnell, R-Ky., said that chamber will consider the trade pact in 2020 (see 1912100015).
Hill lawmakers' communications policy aspirations for a continuing resolution to fund the federal government past Dec. 20 took simultaneous steps forward and back Tuesday and Wednesday. Congressional leaders finalized an expected deal to attach language from two House-side Satellite Television Extension and Localism Act reauthorization bills into the funding extension measure (see 1912090051). A contentious Senate Commerce Committee markup of the 5G Spectrum Act (S-2881) and other factors, meanwhile, raised doubts about the prospects of using the CR to weigh in on a planned FCC auction of spectrum on the 3.7-4.2 GHz C band (see 1912100001).
As voice providers implement signature-based handling of asserted information using tokens/secure telephony identity revisited (Shaken/Stir) to combat robocalls, they should maintain customer service and other resources to help consumers and call originators on call labeling. That's among recommendations the FCC Consumer Advisory Committee unanimously approved Wednesday without discussion. The Caller ID Authentication Working Group also recommended the commission do studies with stakeholders, including industry and consumer groups, on what factors providers should consider in displaying caller ID information to consumers; collaborate with stakeholders to educate consumers “about how caller ID services, consumer display practices, and other measures can respond to evolving illegal and unwanted robocaller tactics”; continue evaluating how to encourage voice service providers to continue “innovating and improving caller ID services”; and develop webpages and educational campaigns using simple language for implementation. It recommended voice providers “clearly and proactively” inform consumers about caller ID services they offer. Commissioner Mike O’Rielly warned CAC about “unintended consequences” of government intervention. “Many robocalls are beneficial to the public,” he said in a recorded video. "No one should want to block” robocalls from doctors, pharmacies or schools, O’Rielly said. Chairman Ajit Pai still expects major voice providers to implement Shaken/Stir by year-end. “If they don’t, we will be taking action,” he said. He again noted “no silver bullet” exists to prevent all robocalls and “we have to take a multipronged and multistakeholder approach” (see 1907110023). The WG spent time gathering information, including researching reports of robocalls and hearing presentations from AARP, AT&T, CenturyLink, ATIS' Secure Telephone Identity Governance Authority, T-Mobile and TNS, said Michael Santorelli, the group’s co-chair, who's deemed a special government employee. The CAC meeting also featured bureau updates, including on 5G, consumer-related legislation and precision agriculture. Kristi Thompson, Enforcement Bureau Telecom Consumers Division chief, gave an update on consumer scams and “scumbag telemarketing.” Combating fraud "is not only a good idea, but it is a necessity,” she said. “If consumers no longer value their telephone voice services … that’s an existential threat to the service providers.” Noting “we tackled the cramming problems” of unapproved charges on consumer phone bills, “now a trickle of what they were,” she said there's room for hope in fighting scams: “We can succeed again.”
If Huawei equipment is enough of a threat to warrant barring USF funds to networks using it (see 1911220033), the FCC should look further into having that hardware removed even from networks where carriers aren't getting USF funds, Commissioner Brendan Carr said at Tuesday's Practising Law Institute conference. Legal issues could arise with that approach, but the topic should at least "be on the table," he said. He said the FCC is working "with other three-letter agencies" on such issues. Huawei didn't comment.
ICANN should delay the sale of the Public Interest Registry to a private equity firm until concerns about possible censorship, high domain name prices and other issues are addressed, more nonprofits are asking. The transaction, announced Nov. 13 (see 1911130029), involves the sale of PIR's assets to Ethos Capital. Despite assurances from the buyer and the seller, the Internet Society, opposition is growing. ICANN requested more information about the deal and urged the parties to act openly and transparently.
Congressional leaders appeared very close to an agreement Monday afternoon on Satellite Television Extension and Localism Act reauthorization legislation, Capitol Hill aides and lobbyists told us. Senate Judiciary Committee Chairman Lindsey Graham, R-S.C., and Senate Commerce Committee Chairman Roger Wicker, R-Miss., also confirmed to reporters Monday they were nearing a deal. The House is set to vote Tuesday on the House Commerce Committee-cleared Television Viewer Protection Act (HR-5035). That bill would make permanent STELA's good-faith retransmission consent negotiations requirement and continue to allow importing distant signals under the compulsory license (see 1911200048). The potential compromise between HR-5035 and other STELA bills draws language from the Satellite Television Community Protection and Promotion Act (HR-5140), which would make permanent STELA's distant-signal compulsory license language but limit its scope to cover only trucks, RVs and households in short markets. Graham and others said Hill leaders are seeking to jettison language added during House Judiciary Committee markup of HR-5140 by Rep. Zoe Lofgren, D-Calif., that expands beyond the originally proposed 120 days the limited extension of the distant-signal license for categories of subscribers that would be removed from the license (see 1911210052). Lofgren wanted the initial window to be six months. A satellite company could then apply for a theoretically unlimited number of 90-day extensions as long as it files a notice with the Copyright Office proving it acted “reasonably and in good faith” to provide coverage to all markets.
If the FCC intends to reverse a 2015 declaratory ruling on VoIP symmetry, Bandwidth said, make clear "tandem-switched transport functions provided in originating and terminating calls to 'over-the-top' VoIP customers are compensable as tandem switching and transport services in accordance with LEC switched access tariffs." The company, posting Friday in docket 10-90, agreed with CenturyLink's petition for a declaratory ruling on the matter (see 1912050034). Commissioners vote Thursday (see 1911210049).