In October 2020 and 2021, the FCC adopted a pair of Orders to streamline the processing of applications involving “reportable” foreign ownership that are referred to the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector—commonly known as “Team Telecom.” Team Telecom is tasked with assessing the national security, law enforcement, foreign policy, and trade policy concerns presented by FCC applications seeking licensing authority or approval for cross-border M&A transactions.

Before the adoption of these Orders, the process of referring the applications to Team Telecom— and the parties receiving the initial set of “Triage Questions” from Team Telecom—often took several weeks, if not months. To streamline this process, the FCC adopted “Standard Questions” that applicants would submit to Team Telecom prior to or contemporaneously with the filing of their FCC applications. 

However, this new process was subject to Office of Management & Budget Approval, which finally occurred last week. As a result, applicants must now prepare responses to the Standard Questions alongside their FCC application materials, as well as submit a copy of the completed FCC application to Team Telecom within three business days of filing. This new process should materially reduce the amount of time necessary for Team Telecom to start its initial 120-day review clock—streamlining the review process and benefitting the applicant.

As we summarized previously, the Standard Questions are sorted into five categories:

• Corporate structure and shareholder information;
• Relationships with foreign entities;
• Financial condition and circumstances;
• Compliance with applicable laws and regulations; and
• Business and operational information.

Similarly, applicants must submit certifications that they will:

• Comply with CALEA and other Commission rules;
• Make communications to, from, or within the United States, including records thereof, available to U.S. law enforcement officials;
• Designate a U.S. citizen or permanent U.S. resident as a point of contact for requests and as an agent for legal service of process;
• Affirm that all information submitted to the Commission and the Committee is complete and accurate, and provide notice of substantial and significant changes in such information; and
• Affirm the understanding that their failure to fulfill any conditions of the grant of their applications can result in license revocation or termination and criminal and civil penalties.

Going forward, applicants with reportable foreign ownership—currently, 10% or greater of an applicant, but the FCC has proposed to lower this threshold to 5%—should begin preparing responses to the Standard Questions as soon as possible in the M&A or FCC application process. Team Telecom reviews are often complex, and interfacing with investors in order to gather the extensive ownership information is often a time-consuming process.

Preparing fulsome responses to the Standard Questions simultaneous with the FCC application itself will likely mitigate licensing review times and help forestall any M&A closing anxiety.