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Feb 15, 2005

The Legal Line

Ed Maldonado

Dear Legal Line:
Does the FCC just want U.S. citizens to have 214 Authority? I have just been granted my authority after almost 3 months of being in the application process when their posted guildelines say 4-5 weeks. The problem to me appears to have been that I am a US resident and not a US citizen. Let me explain. I have a prepaid business that sells my own cards, PINs, and prepaid cellular services in the Midwest through distributors and over the Internet. My carriers told me this past summer that I need the 214 and 499ID in order to continue business with them. Since they were major providers and I needed them, it was no problem and I applied.

I did the application myself through the FCC’s website and supplied all of the information they asked for on the website. A week or two after I applied I got an email from a lawyer in the Department of Justice. The email asked for more information about the nationalities of other shareholders in the company, if I used any variations on my name, what I intended to do in the prepaid business, and etc. So I answered the questions right away. The next week I got another email asking more information. This time it was about from whom I would get my services, if there were investors in my business and etc. I answered them completely as possible. I checked the FCC website every couple of days to see if the authority went through or not. There was no movement until almost two months later. Finally the license was granted.

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Since the time I applied, I have asked several people I know in the industry if they have had the same problem. Surprisingly it has been the reverse. A very good associate of mine in the prepaid business applied after me and got his 214 granted before me. He is a US citizen born here. Not even one Department of Justice lawyer contacted him in the entire process!! What is going on here? I saw no mention of the Department of Justice approving the 214 applications on the FCC website or requirements that information other than what is in the application be given to that Department. I thought that this was strictly a FCC authority not a Department of Justice authority. Do you know about what is going on here and will this be the way things are done when I file my 499 or other federal reports? Please let me know.

Midwest Prepaid

Dear MP:
My answer to your first question is no. There are no biases on the part of the FCC toward foreign nationals for surely such a bias would predicate a constitutional challenge. What is transpiring, however, are internal changes within the FCC to coordinate information related to national security with the Department of Justice and the Department of Homeland Security. This is largely due to the Patriot Act and has been going on for some time. For example, this past January the FCC held a bureau conference where the various divisions reported on the work of each bureau and the directions that would be advancing in the next-coming years. The FCC Enforcement Bureau and the International Bureau both referenced incorporation of feedback and coordination with the DOJ and Homeland Security in their presentations.

I agree with you that the DOJ has definitely taken interest in identifying foreign nationals that participate in international telecommunications services. I have handled several 214 applications where the DOJ has requested more details from the applicant who is a foreign national or foreign national how have ownership of 10% or more in the company. The process to date has been relatively informal. When requests are made they are no under specific perjury penalties citing a particular statute or regulation. While the process does extend the time in obtaining a 214 for a foreign national, I have not seen rejections based on the applicant being a foreign national or having 10% or more ownership by a foreign national.

A critical issue in claiming a bias, or discrimination, by an agency for government is having been impacted with some form of finality - in other words, a denial or a rejection. To date I have not seen this type of action. I have observed that the FCC is definitely changing the process that is used to approve the 214 Authority, but I have not personally observed a bias. However, this is just my experience. There may come an instance or an applicant that something different may occur. I think it is important to always be mindful of constitutional pitfalls. Should you experience a denial or rejection on that basis it is imperative that you speak to an attorney immediately, particularly one versed on constitutional claims. However, from what you have written, it appears that there is a question of a lack of judicial ripeness as to the treatment of foreign nationals applying for 214 Authority. As far as 499 reporting, nationality is not the basis for reporting, it is the classification of a contributing carrier. I have not seen any DOJ involvement in that process to date.
Good Luck and Success in the Industry.

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