FCC Proposes Limits on Section 214 Authority for Covered List and Foreign Adversary-Linked Entities

On May 1, 2026, the Federal Communications Commission (FCC or Commission) released a Notice of Proposed Rulemaking (NPRM) seeking comment on a broad set of potential reforms to its domestic telecommunications licensing requirements under Section 214 of the Communications Act. While a departure from more than a quarter century of deregulating domestic telecommunications services, the NPRM builds on a series of recent Commission actions targeting supply chain security, foreign ownership transparency, and an effort to align telecommunications policy with evolving national security concerns, particularly those involving foreign adversaries and entities identified on the FCC's Covered List, including a recent FCC update adding foreign-made routers to the Covered List. While the proposed rules would be limited to traditional telecom services and would not affect unlicensed services such as interconnected VoIP, the Commission is considering whether to prohibit interconnection of facilities exchanging telecommunications traffic with entities on the Covered List or entities deemed under control of foreign adversaries. The scope of this provision appears to be focused on traditional interconnection agreements between carriers under Section 251 of the Communications Act and does not specifically call out IP-to-IP or SIP interconnection arrangements. But such interconnection agreements could be brought under the scope of any final rules in the future.

Comments will be due 30 days after Federal Register publication, with reply comments due 60 days thereafter.

Key Proposals

• Preventing Covered List entities, as well as those owned, controlled, or directed by foreign adversaries, from automatically receiving blanket domestic authorization prospectively.
• Revoking existing blanket domestic Section 214 authority from Covered List entities and those owned, controlled, or directed by foreign adversaries.
• Prohibiting interconnection with Covered List entities or carriers controlled by foreign adversaries, including facilities (data centers, gateways, and Points of Presence) operated by these entities.

Background

Section 214 of the Communications Act, 47 U.S.C. § 214, requires telecommunications carriers to obtain FCC authorization before constructing or operating interstate communications facilities. Since 1999, however, the Commission has relied on "blanket" authority to automatically approve, without application or formal process, all common carriers seeking to provide domestic interstate telecommunications services. At the time, this streamlined approach promoted market entry and competition. But because the current Commission is increasingly focused on the promotion and protection of national security, it is revisiting this deregulatory approach in favor of greater oversight and restrictions on market entry in the name of national security.

To address growing national security concerns, Congress enacted the Secure and Trusted Communications Networks Act of 2019, 47 U.S.C. §§ 1601 et seq., and directed the FCC to maintain and regularly update a published list of communications equipment and services that pose an unacceptable risk to U.S. national security, known as the "Covered List." Most entries on the Covered List are equipment-related, although several Chinese carriers and their services are also on the list. In line with its recent Covered List action to address perceived foreign adversary risks, the FCC is now questioning in this NPRM whether its historically deregulatory framework for domestic carrier authorizations remains appropriate.

Excluding Covered List Entities From Blanket Authority

The FCC is proposing to tighten its rules by excluding companies on the Covered List, and their affiliates, from eligibility for automatic domestic Section 214 authority. Under this proposal, these companies would still be able to apply individually, but would face a more rigorous review that is similar to international 214 telecom approvals—including an evaluation by Team Telecom—on the presumption of "denial unless proven safe." This exclusion would be forward-looking and would also extend to entities seeking to acquire existing authorizations. Because the FCC has not ruled that interconnected VoIP services are common carrier telecommunications services requiring a section 214 license, this new licensing process would only apply to traditional telecommunications services—including voice and data—but not interconnected VoIP or unregulated broadband internet access. But, proposals on limiting interconnection could alter the environment for those services as well.

The Commission also proposes to expand these section 214 restrictions beyond Covered List entities to include companies and communications equipment or services "owned by, controlled by, or subject to the direction of a foreign adversary" or "directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in majority part by a foreign adversary" as defined in section 1.70001(g). Note that while there is a list of countries deemed foreign adversaries, there is no definitive list of which foreign-controlled carriers would be included.

Revocation of Existing Blanket Authority

Separately, the FCC is seeking comment on how best to revoke the authorizations of Covered List entities currently operating domestically under blanket 214 authority if the proposed rules are adopted.

The Commission outlines two potential approaches:

• A streamlined revocation process, modeled on recent proceedings involving foreign adversary control, involving notice, response, and revocation stages.
• Automatic revocation after a transition period (e.g., six months), with potential requirements for customer notification and service transition support.

The FCC also asks whether the impacted companies should get time to wind down their services and what protections should be in place to help customers switch providers smoothly.

Prohibiting Interconnection With Excluded Entities

The Commission seeks comment on its tentative conclusion that interconnection with entities on the Covered List or those entities controlled by foreign adversaries poses national security risks, and further proposes to restrict U.S. telecommunications carriers from interconnecting with these entities to exchange telecommunications traffic without Commission approval. The NPRM also suggests extending this prohibition to interconnection with facilities such as data centers and Points of Presence (PoPs) owned by Covered List entities. The Commission tentatively concludes that interconnection with providers that do not hold domestic 214 authority for national security reasons or whose authority has been revoked would constitute an unreasonable practice under the Communications Act and seeks comment on how these restrictions would affect network operations, contractual arrangements, and costs.

Which commercial arrangements for the interconnection and exchange of telecommunications traffic (e.g., peering, traffic exchange) would be included in this proposed prohibition are not identified. The Commission focuses on services provided under Section 251 of the Communications Act, which are carrier-to-carrier relationships. This framing does not specifically include SIP peering or IP-based interconnection agreements, but such services potentially could be part of any final requirement. Because some traditional telecommunications interconnection arrangements are also used to facilitate unregulated services such as VoIP or internet access as well, these rules could have wider implications for providers or consumers beyond traditional telecommunications services.

Potential Restrictions to Close Regulatory Gaps

The FCC is also exploring whether its current rules leave a loophole allowing high-risk companies to continue domestic operations by using licensed devices using unlicensed wireless spectrum. For example, the Commission calls out whether a high-risk company should be permitted to provide wireless broadband internet access using unlicensed spectrum, which would not otherwise require a license. Because these types of services don't require a license, entities without blanket 214 authority could potentially offer service to consumers without oversight. To close this gap, the FCC is considering changes that would limit or block these companies from using unlicensed wireless services to serve customers.

Looking Ahead

The FCC's NPRM could result in the most consequential change to the domestic telecommunications regulatory framework in decades, and entities operating in, or adjacent to, U.S. telecommunications markets, including carriers, equipment providers, infrastructure operators, internet-based voice and data services, and investors in the above should pay close attention as this proceeding unfolds. In particular, companies should carefully assess the potential effects on their operations based on potential:

• Exposure to Covered List or foreign adversary designations.
• Reliance on interconnection or similar arrangements with foreign entities.
• Use of foreign equipment or infrastructure that could trigger future restrictions.

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K.C. Halm and Doug Orvis are partners, and Kasey McGee is an associate in the Washington, D.C. office of DWT. For questions on the NPRM or more insights, please reach out to the authors or another member of our communications team and sign up for our alerts.