[House Report 118-489]
[From the U.S. Government Publishing Office]


118th Congress }                                               { Report
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                               { 118-489

======================================================================



 
           FOREIGN ADVERSARY COMMUNICATIONS TRANSPARENCY ACT

                                _______
                                

  May 7, 2024.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mrs. Rodgers of Washington, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 820]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 820) to direct the Federal Communications 
Commission to publish a list of entities that hold 
authorizations, licenses, or other grants of authority issued 
by the Commission and that have certain foreign ownership, and 
for other purposes, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     3
Committee Action.................................................     3
Committee Votes..................................................     4
Oversight Findings and Recommendations...........................     6
New Budget Authority, Entitlement Authority, and Tax Expenditures     6
Congressional Budget Office Estimate.............................     6
Federal Mandates Statement.......................................     6
Statement of General Performance Goals and Objectives............     6
Duplication of Federal Programs..................................     6
Related Committee and Subcommittee Hearings......................     6
Committee Cost Estimate..........................................     7
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     7
Advisory Committee Statement.....................................     7
Applicability to Legislative Branch..............................     7
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     8

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Foreign Adversary Communications 
Transparency Act''.

SEC. 2. LIST OF ENTITIES HOLDING FCC AUTHORIZATIONS, LICENSES, OR OTHER 
                    GRANTS OF AUTHORITY AND HAVING CERTAIN FOREIGN 
                    OWNERSHIP.

  (a) In General.--Not later than 120 days after the date of the 
enactment of this Act, the Commission shall publish on the internet 
website of the Commission a list of each entity--
          (1) that holds a license issued by the Commission pursuant 
        to--
                  (A) section 309(j) of the Communications Act of 1934 
                (47 U.S.C. 309(j)); or
                  (B) the Act of May 27, 1921 (47 U.S.C. 34 et seq.; 
                commonly known as the ``Cable Landing Licensing Act'') 
                and Executive Order 10530 (3 U.S.C. 301 note; relating 
                to the performance of certain functions vested in or 
                subject to the approval of the President); and
          (2) with respect to which--
                  (A) a covered entity holds an equity or voting 
                interest that is required to be reported to the 
                Commission under the ownership rules of the Commission; 
                or
                  (B) an appropriate national security agency has 
                determined that a covered entity exerts control, 
                regardless of whether such covered entity holds an 
                equity or voting interest as described in subparagraph 
                (A).
  (b) Rulemaking.--
          (1) In general.--Not later than 18 months after the date of 
        the enactment of this Act, the Commission shall issue rules to 
        obtain information to identify each entity--
                  (A) that holds any authorization, license, or other 
                grant of authority issued by the Commission (other than 
                a license described in subsection (a)(1)); and
                  (B) with respect to which a covered entity holds an 
                equity or voting interest that is required to be 
                reported to the Commission under the ownership rules of 
                the Commission.
          (2) Placement on list.--Not later than 1 year after the 
        Commission issues the rules required by paragraph (1), the 
        Commission shall place each entity described in such paragraph 
        on the list published under subsection (a).
  (c) Paperwork Reduction Act Exemption.--A collection of information 
conducted or sponsored by the Commission to implement this section does 
not constitute a collection of information for the purposes of 
subchapter I of chapter 35 of title 44, United States Code (commonly 
referred to as the ``Paperwork Reduction Act'').
  (d) Annual Updates.--The Commission shall, not less frequently than 
annually, update the list published under subsection (a), including 
with respect to any entity required to be placed on such list by 
subsection (b)(2).
  (e) Definitions.--In this section:
          (1) Appropriate national security agency.--The term 
        ``appropriate national security agency'' has the meaning given 
        such term in section 9 of the Secure and Trusted Communications 
        Networks Act of 2019 (47 U.S.C. 1608).
          (2) Commission.--The term ``Commission'' means the Federal 
        Communications Commission.
          (3) Covered country.--The term ``covered country'' means a 
        country specified in section 4872(d)(2) of title 10, United 
        States Code.
          (4) Covered entity.--The term ``covered entity'' means--
                  (A) the government of a covered country;
                  (B) an entity organized under the laws of a covered 
                country; and
                  (C) a subsidiary or affiliate of an entity described 
                in subparagraph (B), regardless of whether the 
                subsidiary or affiliate is organized under the laws of 
                a covered country.

                          PURPOSE AND SUMMARY

    H.R. 820, the ``Foreign Adversary Communications 
Transparency Act,'' requires the Federal Communications 
Commission (FCC or the Commission) to publish a list on its 
website of entities holding FCC authorizations, licenses, or 
grants of authority and that have ties to foreign adversaries.

                  BACKGROUND AND NEED FOR LEGISLATION

    Foreign adversaries of the United States pose a significant 
threat to American communications networks. These adversary 
governments, and the untrusted vendors affiliated with them, 
could use their presence in U.S. communications networks to 
``provide [an] intelligence advantage'' and to ``harm American 
national security and the privacy of Americans.''\1\
---------------------------------------------------------------------------
    \1\Securing Communications Networks From Foreign Adversaries, 
Hearing before the Sub. on Commc'n. and Tech., H. Comm. on Energy and 
Commerce, 118th Cong. (2024) (Written Testimony of James Andrew Lewis 
at 4).
---------------------------------------------------------------------------
    Congress has taken steps to address this threat. In 2020, 
Congress enacted the Secure and Trusted Communications Networks 
Act to remove communications equipment and services from 
untrusted vendors, such as Huawei and ZTE, from U.S. 
communications networks.\2\ The following year, Congress passed 
the Secure Equipment Act to prohibit the FCC from authorizing 
communications equipment from untrusted vendors.\3\
---------------------------------------------------------------------------
    \2\Secure and Trusted Communications Networks Act of 2019, P.L. 
116-124 (2020), codified at 47 U.S.C. 1601, et seq.
    \3\Secure Equipment Act of 2021, P.L. 117-55 (2021).
---------------------------------------------------------------------------
    Removing untrusted communications equipment and services 
from U.S. communications networks is an important first step, 
but adversaries and their affiliates also can be present in 
these networks in other ways. Their direct and indirect holding 
of licenses, authorizations, and other authorities granted by 
the FCC, such as spectrum licenses and cable landing licenses, 
allow these entities legally to access and use American 
communications networks.\4\
---------------------------------------------------------------------------
    \4\See, e.g., Federal Communications Commission, Order on 
Revocation and Termination, China Telecom (Americas) Corporation (Nov. 
2021) (GN Docket No. 20-109).
---------------------------------------------------------------------------
    Given the threat, transparency on whether an entity with 
ties to a foreign adversary holds licenses, authorizations, or 
other authorities granted by the FCC would assist the public, 
particularly the communications industry, in assessing 
potential security risks associated with partnerships or 
transactions involving those entities. Moreover, this 
transparency will allow other government stakeholders to 
identify national security threats posed by these entities, 
which can be used to strengthen communications networks in the 
United States.

                            COMMITTEE ACTION

    On January 11, 2024, the Subcommittee on Communications and 
Technology held a hearing on cybersecurity matters. The title 
of the hearing was ``Safeguarding Americans'' Communications: 
Strengthening Cybersecurity in a Digital Era.'' The 
Subcommittee received testimony from:
           Jim Richberg, Head of Cyber Policy, 
        Fortinet;
           Tobin Richardson, President and CEO, 
        Connectivity Standards Alliance;
           Clete Johnson, Senior Fellow, Center for 
        Strategic and International Studies; and
           Alan Butler, Executive Director and 
        President, Electronic Privacy Information Center.
    On February 15, 2024, the Subcommittee on Communications 
and Technology held a hearing on multiple bills, including H.R. 
820. The title of the hearing was ``Securing Communications 
Networks from Foreign Adversaries.'' The Subcommittee received 
testimony from:
           James Lewis, Senior Vice President, Center 
        for Strategic and International Studies;
           Craig Singleton, China Program Senior 
        Director and Senior Fellow, Foundation of Defense of 
        Democracies; and
           Lindsay Gorman, Senior Fellow for Emerging 
        Technologies, German Marshall Fund's Alliance for 
        Securing Democracy.
    On March 12, 2024, the Subcommittee on Communications and 
Technology met in open markup session and forwarded H.R. 820, 
with amendment, to the full Committee by vote of 22 yeas and 0 
nays.
    On March 20, 2024, the full Committee on Energy and 
Commerce met in open markup session and ordered H.R. 820, as 
amended, favorably reported to the House by a record vote of 44 
yeas and 0 nays.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII requires the Committee to list the 
record votes on the motion to report legislation and amendments 
thereto. The following reflects the record votes taken during 
the Committee consideration:


                 OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII, the Committee held hearings and made findings that 
are reflected in this report.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    Pursuant to clause 3(c)(2) of rule XIII, the Committee 
finds that H.R. 820 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII, at the time this 
report was filed, the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974 was not available.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to 
reauthorize the National Telecommunications and Information 
Administration.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 820 is known to be duplicative of another Federal program, 
including any program that was included in a report to Congress 
pursuant to section 21 of Public Law 111-139 or the most recent 
Catalog of Federal Domestic Assistance.

              RELATED COMMITTEE AND SUBCOMMITTEE HEARINGS

    Pursuant to clause 3(c)(6) of rule XIII, the following 
related hearings were used to develop or consider H.R. 820:
           On January 11, 2024, the Subcommittee on 
        Communications and Technology held a hearing on 
        cybersecurity matters. The title of the hearing was 
        ``Safeguarding Americans'' Communications: 
        Strengthening Cybersecurity in a Digital Era.'' The 
        Subcommittee received testimony from:
                   Jim Richberg, Head of Cyber 
                Policy, Fortinet;
                   Tobin Richardson, President and 
                CEO, Connectivity Standards Alliance;
                   Clete Johnson, Senior Fellow, 
                Center for Strategic and International Studies; 
                and
                   Alan Butler, Executive Director 
                and President, Electronic Privacy Information 
                Center.
           On February 15, 2024, the Subcommittee on 
        Communications and Technology held a hearing on 
        multiple bills, including H.R. 820. The title of the 
        hearing was ``Securing Communications Networks from 
        Foreign Adversaries.'' The Subcommittee received 
        testimony from:
                   James Lewis, Senior Vice 
                President, Center for Strategic and 
                International Studies;
                   Craig Singleton, China Program 
                Senior Director and Senior Fellow, Foundation 
                of Defense of Democracies; and
                   Lindsay Gorman, Senior Fellow 
                for Emerging Technologies, German Marshall 
                Fund's Alliance for Securing Democracy.

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(1) of rule XIII, at the time this 
report was filed, the estimate was not available.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 820 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    This section provides that the Act may be cited as the 
``Foreign Adversary Communications Transparency Act.''

Section 2. List of entities holding FCC authorizations, licenses, or 
        other grants of authority and having certain foreign ownership

    Subsection (a) would direct the FCC to publish, within 120 
days of enactment, a list of entities that hold a license 
issued by the Commission pursuant to:
           Section 309(j) of the Communications Act of 
        1934 (47 U.S.C. 309(j)); or
           The Act of May 27, 1921 (47 U.S.C. 34 et 
        seq., commonly known as the ``Cable Landing Licensing 
        Act'') and Executive Order 10530 (3 U.S.C. 301 note, 
        relating to the performance of certain functions vested 
        in or subject to the approval of the President);
and where:
           A covered entity holds an equity or voting 
        interest in the entity that must be reported to the 
        Commission under its ownership rules; or
           An appropriate national security agency has 
        determined that a covered entity exerts control over 
        the covered entity, regardless of whether such covered 
        entity holds an equity or voting interest that must be 
        reported to the FCC under its ownership rules.
    A covered entity is defined as the government of a covered 
country, which is defined as China, North Korea, Iran, and 
Russia; an entity organized under the laws of a covered 
country; and a subsidiary or affiliate of an entity organized 
under the laws of a covered country, regardless of where the 
subsidiary or affiliate is organized.
    Subsection (b) would direct the FCC to, within 18 months of 
enactment, issue rules to identify entities holding any 
authorization, license, or other grant of authority issued by 
the Commission (other than those described in subsection (a)) 
and where a covered entity holds an equity or voting interest 
in such entities that is required to be reported to the 
Commission under its ownership rules. It is the Committee's 
intent that these rules should not be duplicative of other 
reporting obligations and that the Commission should seek to 
minimize the burden imposed on entities subject to these rules.
    Not later than one year after these rules are issued, the 
Commission would be required to add the relevant entities to 
the list required under subsection (a).
    Subsection (c) would exempt any collection of information 
carried out or sponsored by the Commission for the purpose of 
implementing this section from the Paperwork Reduction Act.
    Subsection (d) would require the Commission to update the 
list published under subsection (a) no less than annually, 
including for the entities added by the process set forth 
subsection (b).
    Subsection (e) would define terms used in this section, 
including covered country and covered entity.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.