What it does The opinion holds that the FCC reasonably concluded that Chinese ownership and control created opportunities to access, monitor, store, disrupt, or misroute U.S. communications and records, facilitating espionage and other harmful activities. It also upholds the Commission’s finding that the carriers provided misleading or incomplete ownership and operational information. The court rejected challenges to the FCC’s reliance on national-security considerations, its decision that mitigation agreements would not adequately address the risks, and its adjudicatory process.

Who it affects The decision directly affects Pacific Networks and its wholly owned subsidiary ComNet, which provided business networking and international calling-card services. It affirms the FCC’s authority to consider national-defense, public-convenience, espionage, and trustworthiness concerns when reviewing foreign-owned telecommunications carriers, with input from Team Telecom.

Why it matters The ruling confirms substantial judicial deference to the FCC’s reasoned national-security judgments in Section 214 proceedings. It also establishes that the Commission need not hold a live evidentiary hearing, obtain a formal Team Telecom recommendation, or use rulemaking when addressing the specific risks posed by individual carriers.

Key dates and numbers

• Argued September 20, 2022; decided August 15, 2023.
• D.C. Circuit docket No. 22-1054.
• FCC revoked the authorizations in FCC 22-22, adopted March 23, 2022.
• Section 214(a) of the Communications Act requires FCC authorization to operate a wire communications line.