conference & convention enabling the next generation of networks & services IMPACT OF NATIONAL SECURITY REVIEW ON SUBMARINE CABLES LANDING IN THE UNITED STATES LANDING IN THE UNITED STATES Andrew D. Lipman Bingham McCutchen LLP
conference & convention enabling the next generation of networks & services Presenter Profile Andrew Lipman is the practice leader of Bingham McCutchen’s Telecommunications, Media and Technology Group and has over 30 years experience in fields of domestic and international telecommunications law, international telecommunications law, policy and strategy. Andy was a founder and senior legal and regulatory VP for MFS Communications, and helped guide the company from start-up to its eventual sale for $14.4 billion to WorldCom. Andrew D. Lipman Partner Email: andrew.lipman@bingham.com Tel: (+1) 202.373.6000
conference & convention enabling the next generation of networks & services U.S. Cable Requires Multiple Authorizations � Environmental, Rights of Way and Building Permits from Local and State Authorities � License from Federal Communications Commission (FCC) - FCC reviews applications and issues licenses pursuant to authority delegated from President of the United States - FCC required to get State Department approval before issuing license - Other Executive Branch agencies (“Team Telecom”) seek to exert influence on licensing process to protect national security and address law enforcement concerns
conference & convention enabling the next generation of networks & services FCC Licensing Process Application requirements � � Description of cable including capacity Description of cable including capacity � Description and geographic coordinates of route and US and foreign cable landings � Election of common or non-common carrier status
conference & convention enabling the next generation of networks & services FCC Licensing Process (cont.) - Common carrier cables subject to FCC non- discrimination and reasonableness obligations - FCC may require common carrier status if cable route is not sufficiently competitive route is not sufficiently competitive � Ownership information � Application fee: $16,820
conference & convention enabling the next generation of networks & services FCC Licensing Process (cont.) � Required licensees/co-licensees - Any entity that owns/controls a U.S. landing station - Any entity with a 5% or greater interest in the system (but only if it will use the U.S segments) � Licensees must list all of their 10% or greater direct and indirect owners � All original owners of system must be named in application but are not licensees unless they meet the above criteria
conference & convention enabling the next generation of networks & services Team Telecom Review � FCC automatically sends applications with 10% or more foreign investment to Executive Branch and will not approve until they resolve national security issues security issues - Includes applications for new licenses and transfers of existing licenses
conference & convention enabling the next generation of networks & services Team Telecom Review (cont.) � “Team Telecom,” a subset of the Committee on Foreign Investment in the United States (CFIUS), takes lead on behalf of Executive Branch on foreign investment in communications transactions foreign investment in communications transactions - Members: Defense, Homeland Security, Justice/FBI � Focus is on improving national security – foreign ownership often merely a hook for extracting concessions desired of all carriers
conference & convention enabling the next generation of networks & services Team Telecom Modus Operandi � File letter with FCC requesting deferral of action on applications involving foreign ownership � Send letter to applicant requesting additional information related to network control, access to key data and sensitive equipment, equipment and key data and sensitive equipment, equipment and facilities used � Seek private voluntary commitments, and if significant concerns, require public Network Security Agreement that is incorporated by the FCC as a condition to the license grant � No deadline for review
conference & convention enabling the next generation of networks & services Network Security Agreements � Focuses on physical and logical security of network and information - Terms may vary depending on foreign points and entities involved entities involved � NSA involving TPE was more extensive than most � Typical requirements may include: - A NOC established within the US that is operated by Screened Personnel - Maintain ability to interrupt traffic to and from the United States
conference & convention enabling the next generation of networks & services Network Security Agreements (cont.) - NOC has ability to view status of entire system - List of equipment used in system and maintenance and security contracts provided to DHS • Changes to principal list of equipment requires 15 day advance notice unless emergency - Domestic communications infrastructure in US and under control of US-based personnel - Transactional data, subscriber information, billing records to be stored in US - Restricted access to domestic network and data by foreign persons and prohibition on disclosure of domestic communications and data to foreign persons
conference & convention enabling the next generation of networks & services Network Security Agreements (cont.) - Obligation to cooperate with US Law Enforcement Agencies - Implementation of personnel screening procedures - - Configuration of network to enable interception by Configuration of network to enable interception by USG - Annual reporting and USG inspection and audit rights - Insulate government contracting business and sensitive networks/equipment from foreign control and influence
conference & convention enabling the next generation of networks & services Strategies for Dealing with Team Telecom � Engage Team Telecom early � Seek Special Temporary Authority to commence construction of system while commence construction of system while negotiating with Team Telecom � Understand what network and contract issues may present biggest hurdles - USG contracting/defense work a big issue
conference & convention enabling the next generation of networks & services Strategies for Dealing with Team Telecom (cont.) � Be prepared to offer substantial and meaningful concessions � � Anticipate and promptly address agency Anticipate and promptly address agency concerns
2010 conference & convention enabling the next generation of networks & services The 7th International Conference & Convention on Undersea Telecommunications Pacifico Convention Plaza Yokohama & InterContinental The Grand Yokohama 11 ~ 14 May 2010 www.suboptic.org
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