China Telecom Americas Files Opening Brief in Revocation Appeal Before D.C. Cir.

In a redacted brief filed on Tuesday, China Telecom (Americas) Corporation (CTA) said that the Federal Communications Commission (FCC) bucked standard procedure when it voted to revoke CTA’s operating licenses over purported national security concerns. CTA’s opposition comes amidst a tide of federal action against Chinese telecom providers, with last week’s revocation of China Unicom’s (Americas) service authority being the latest.

For its part, CTA is fighting the FCC’s November 2 revocation order eliminating its domestic and international common-carrier authorizations. The company initially asked for an emergency stay, but the D.C. Circuit denied the request. 

Now, CTA argues that the FCC departed from standard procedures in violation of its own rules, the Administrative Procedure Act (APA), and its due process rights. In addition, the brief says that the agency’s bases for revocation were flawed, based primarily on suspicions about the company’s corporate owner, rather than on anything CTA did or failed to do.

Specifically, CTA takes issue with the FCC’s purported refusal to hold a live or written-record hearing before revoking CTA’s authorizations. The brief says that the FCC refused its repeated requests for such a hearing, thereby deviating from its practice of providing one. “By mischaracterizing its past practice at one moment and disavowing that practice the next, the FCC failed to engage in the reasoned decision making required by the APA,” the filing says.

The brief also argues that the FCC did not prove that CTA committed egregious misconduct, the standard that must be met in order for revocation. The FCC allegedly relied on Executive Branch agency recommendations to support its finding that CTA’s “corporate structure provided the Chinese government with opportunities to access, disrupt, or misroute U.S. communications that may allow for espionage.” These representations fall short of establishing the egregiousness required for revocation, the brief says, rendering the decision arbitrary, capricious, and unsupported by substantial evidence.

The FCC’s response is due February 17. CTA is represented by Morgan Lewis & Bockius LLP.