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No. 10304069
United States Court of Appeals for the Ninth Circuit
China Unicom (Americas) Opera v. FCC
No. 10304069 · Decided December 24, 2024
No. 10304069·Ninth Circuit · 2024·
FlawFinder last updated this page Apr. 2, 2026
Case Details
Court
United States Court of Appeals for the Ninth Circuit
Decided
December 24, 2024
Citation
No. 10304069
Disposition
See opinion text.
Full Opinion
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHINA UNICOM (AMERICAS) No. 22-70029
OPERATIONS LIMITED,
Petitioner,
OPINION
v.
FEDERAL COMMUNICATIONS
COMMISSION; UNITED STATES
OF AMERICA,
Respondents.
On Petition for Review of an Order of the
Federal Communications Commission
Argued and Submitted February 15, 2023
Honolulu, Hawaii
Filed December 24, 2024
Before: Carlos T. Bea, Daniel P. Collins, and Kenneth K.
Lee, Circuit Judges.
Opinion by Judge Collins;
Dissent by Judge Bea
2 CHINA UNICOM (AMERICAS) OPS. V. FCC
SUMMARY *
Communications Act of 1934
The panel denied a petition for review brought by China
Unicorn (Americas) Operations Limited (“CUA”)
challenging the Federal Communications Commission’s
(“FCC”) revocation of certificates authorizing CUA to
provide domestic and international telecommunications
services.
In revoking the certificates, which were issued pursuant
to § 214 of the Communications Act of 1934, the FCC found
that CUA had failed to dispel the national security concerns
arising from its ultimate Chinese government ownership and
that CUA had demonstrated a lack of candor and
trustworthiness in its representations to the FCC.
Applying Loper Bright Enterprises v. Raimondo, 144 S.
Ct. 2244 (2024), the panel reviewed de novo whether the
FCC correctly interpreted its authority under the
Communications Act. The panel held that the statute’s grant
of authority to “issue” certificates to telecommunications
carriers must be understood as carrying with it an implied
incidental authority to revoke such certificates. Also, there
was no indication in the statutory text or structure that
Congress denied the FCC any relevant authority to revoke a
carrier’s § 214 certificate.
CUA contended that the revocation order should be set
aside under the Administrative Procedure Act. The panel
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
CHINA UNICOM (AMERICAS) OPS. V. FCC 3
held that the FCC’s decision to revoke CUA’s certificates
based on national security concerns was reasonable and
supported by substantial evidence, and was not arbitrary and
capricious. In addition, the FCC’s alternative ground for
revoking CUA’s certificates—that it had exhibited a lack of
candor and trustworthiness with the FCC—was also amply
supported and was not arbitrary and capricious. The panel
also rejected CUA’s contention that the FCC failed to follow
the requisite procedures prior to revoking CUA’s § 214
certificates.
Judge Bea dissented. He disagreed with the majority’s
view that the FCC’s statutory power to grant § 214
certificates under the Communications Act of 1934
necessarily implied the power to revoke such certificates
solely upon its own volition. He would grant CUA’s
petition, vacate the FCC’s order, and remand with
instruction for the FCC to reinstate CUA’s § 214 certificates.
COUNSEL
Keith Bradley (argued), Squire Patton Boggs LLP, Denver,
Colorado; Jeffrey M. Walker, Squire Patton Boggs LLP,
Columbus, Ohio; Robert E. Stup Jr. and Paul C. Besozzi,
Squire Patton Boggs LLP, Washington, D.C.; for Petitioner.
Matthew J. Dunne (argued), Counsel; Jacob M. Lewis,
Deputy General Counsel; P. Michele Ellison, General
Counsel; Federal Communications Commission, Public
Safety and Homeland Security Bureau, Washington, D.C.;
Casen B. Ross and Sharon Swingle, Attorneys, Appellate
Staff; Brian M. Boynton, Principal Deputy Assistant
Attorney General; Civil Division, United States Department
of Justice, Washington, D.C.; for Respondents.
4 CHINA UNICOM (AMERICAS) OPS. V. FCC
OPINION
COLLINS, Circuit Judge:
China Unicom (Americas) Operations Limited
(“CUA”), a California corporation ultimately owned by the
Chinese government, was authorized to provide domestic
and international telecommunications services pursuant to
certificates granted to it many years ago by the Federal
Communications Commission (“the Commission” or
“FCC”) under § 214 of the Communications Act of 1934. In
May 2019, however, the FCC denied an application for
§ 214 authorization submitted by a different Chinese
government-owned carrier, China Mobile. The latter denial
relied significantly on the views submitted by a number of
Executive Branch agencies, which concluded that Chinese
government control of a telecommunications carrier
presented significant national security concerns. Thereafter,
in April 2020, the FCC issued an order directing CUA to
show cause why the FCC should not revoke its § 214
certificates in light of the national security concerns
articulated during the proceedings involving China Mobile.
After receiving CUA’s response, the FCC solicited input on
the matter from a committee composed of the relevant
Executive Branch agencies. That committee identified
several concerns regarding CUA’s continued ownership of a
U.S. telecommunications carrier, and CUA thereafter
submitted a further response to the committee’s letter.
Finding CUA’s responses inadequate to resolve the
Executive Branch committee’s concerns, the FCC instituted
proceedings to revoke CUA’s § 214 certificates. Ultimately,
after further input from CUA, the FCC issued an order
revoking the certificates on the grounds that CUA’s retention
CHINA UNICOM (AMERICAS) OPS. V. FCC 5
of them presented an unreasonable national security risk and,
separately, that CUA had exhibited a lack of candor and
trustworthiness over the course of the proceedings.
CUA filed a petition for review of the FCC’s revocation
order in this court, arguing that the Commission lacked
statutory authority to revoke CUA’s certificates, that its
decision to do so was arbitrary and capricious, and that it
revoked the certificates without following proper
procedures. We reject CUA’s arguments on each of these
points and, accordingly, deny its petition.
I
To set the factual history in its proper context, we begin
with an overview of the relevant authorities governing the
FCC’s power to regulate telecommunications services. We
then summarize the relevant factual and procedural history
concerning the issuance and revocation of CUA’s
certificates.
A
The Communications Act of 1934 established the FCC
as an agency and granted it centralized authority over
“interstate and foreign commerce in wire and radio
communication.” 47 U.S.C. § 151. The Act states that
Congress conferred these powers on the FCC for the purpose
of “mak[ing] available,” on a non-discriminatory basis, “a
rapid, efficient, Nation-wide, and world-wide wire and radio
communication service with adequate facilities at reasonable
charges”; “for the purpose of the national defense”; and “for
the purpose of promoting safety of life and property through
the use of wire and radio communications.” Id.
As relevant here, the Communications Act regulates the
activities of any “carrier,” which is generally defined to be
6 CHINA UNICOM (AMERICAS) OPS. V. FCC
“any person,” other than a radio broadcaster, who is
“engaged as a common carrier for hire, in interstate or
foreign communication by wire or radio or interstate or
foreign radio transmission of energy.” 47 U.S.C. § 153(11).
Section 214(a) of the Act requires any “carrier” to obtain a
“certificate” from the FCC before it may construct, operate,
or acquire any “lines” used for telecommunications services.
Specifically, the Act provides:
No carrier shall undertake the
construction of a new line or of an extension
of any line, or shall acquire or operate any
line, or extension thereof, or shall engage in
transmission over or by means of such
additional or extended line, unless and until
there shall first have been obtained from the
Commission a certificate that the present or
future public convenience and necessity
require or will require the construction, or
operation, or construction and operation, of
such additional or extended line . . . .
Id. § 214(a) (emphasis added). 1 For purposes of this
provision, a “line” is generally defined to mean “any channel
1
There is arguably a literal mismatch between the sweep of § 214(a)’s
general prohibition and § 214(a)’s description of the permission granted
by the certificate. The prohibitory clause expressly covers both
“construction of a new line or of an extension of any line” as well as
“acquir[ing] or operat[ing] any line,” thereby prohibiting, absent a
certificate, any acquisition or operation of telecommunications lines by
a carrier (even without undertaking construction of a new or extended
line). 47 U.S.C. § 214(a). The clause describing the object of the
certificate, however, refers only to the “operation[] of such additional or
CHINA UNICOM (AMERICAS) OPS. V. FCC 7
of communication established by the use of appropriate
equipment.” Id. Section 214(a) further states that “[n]o
carrier shall discontinue, reduce, or impair service to a
community, or part of a community, unless and until there
shall first have been obtained from the Commission a
certificate that neither the present nor future public
convenience and necessity will be adversely affected
thereby.” Id. The Act, however, exempts from these
certificate requirements “any installation, replacement, or
other changes in plant, operation, or equipment, other than
new construction, which will not impair the adequacy or
quality of service provided.” Id. Thus, as a general matter,
authorization from the FCC is required for any carrier to
build, acquire, or operate any telecommunications lines and
for any carrier to discontinue, impair, or reduce services.
Notably, the Act further authorizes the FCC to “attach to the
issuance” of any such certificate “such terms and conditions
as in its judgment the public convenience and necessity may
require.” Id. § 214(c).
In furtherance of the Act’s purpose of supporting “the
national defense,” 47 U.S.C. § 151, the FCC must provide
notice and a copy of all applications for telecommunications
certificates to the Secretary of Defense and, if such
applications involve the provision of international services,
extended line,” rather than “any line” generally. Id. But it would be
absurd to read the statute as failing to allow the issuance of certificates
that authorize activities that are coextensive with the full range of
activities covered by the prohibitory clause. Neither party advocates
such a mismatched reading here. On the contrary, CUA expressly agrees
that § 214 controls any entry into the telecommunications market.
8 CHINA UNICOM (AMERICAS) OPS. V. FCC
to the Secretary of State as well, id. § 214(b). 2 The
Departments of Defense and State have the right “to be
heard” by the FCC on any such application. See id. Finally,
the FCC has ancillary authority to “perform any and all acts,
make such rules and regulations, and issue such orders, not
inconsistent with [the Act], as may be necessary in the
execution of its functions.” Id. § 154(i). This provision is,
in effect, a “necessary and proper” clause that enables the
FCC to carry out its statutory authorities; it “is not a stand-
alone basis of authority.” Motion Picture Ass’n of Am., Inc.
v. FCC, 309 F.3d 796, 806 (D.C. Cir. 2002) (citation
omitted).
As we will discuss further below, § 214 does not
explicitly address the subject of revoking certificates after
they have been granted. However, the FCC has construed
its authority to grant, refuse, and condition § 214 certificates
as including the power to revoke a common carrier’s
certificate either when the carrier has violated the
Commission’s rules or when the Commission concludes
that, for other reasons, the public interest so requires. 47
U.S.C. §§ 151, 214(a), (c); see, e.g., Pacific Networks Corp.
& ComNet (USA) LLC, 36 FCC Rcd. 6368, 6370 ¶ 3 (2021).
In the late 1990s, as the telecommunications industry
underwent substantial changes, the FCC decided to
significantly alter the process by which it grants § 214
certificates. With respect to applications seeking certificates
relating to domestic telecommunications lines and services,
the FCC replaced its prior practice of evaluating each
2
Section 214(b) also provides that the FCC must likewise supply notice
and a copy to the Governor of any affected State, but that notification
requirement would appear to be tied primarily to the declared purposes
of the Act other than the protection of the national defense.
CHINA UNICOM (AMERICAS) OPS. V. FCC 9
application individually with a general grant of blanket
authority for any common carrier to operate or transmit over
domestic lines. See Implementation of Section 402(b)(2)(A)
of the Telecomms. Act of 1996, 14 FCC Rcd. 11364, 11365
¶ 2 (1999) (hereinafter “Domestic Blanket Order”); see also
47 C.F.R. § 63.01(a). The agency stated that it had
considered adopting a policy of “forbearance”—i.e.,
abstention from enforcement of § 214’s certification
requirement altogether—but rejected that option as “not in
the public interest” because the statutory certification
requirement remained an important “enforcement tool” that
was necessary to prevent “abusive practices” and to protect
consumers. 3 Domestic Blanket Order, 14 FCC Rcd. at
11373 ¶ 14. The FCC instead opted to grant, on a blanket
basis, certification for domestic construction and operation
of telecommunications lines. Id. at 11374 ¶ 16. The FCC
based this blanket granting of certification on its general
determination that “the present and future public
convenience and necessity require the construction and
operation of all domestic new lines.” Id. However, in
adopting this approach, the FCC specifically stated that it
reserved the authority “to revoke a carrier’s section 214
authority when warranted in the relatively rare instances in
which carriers may abuse their market power or their
common carrier obligations.” 4 Id.
3
Under § 10 of the Communications Act, as added in 1996, the FCC is
specifically authorized to “forbear from applying any regulation or any
provision” of the Act if specified conditions are met, including that such
forbearance “is consistent with the public interest.” 47 U.S.C. § 160(a).
4
Although the general authority conferred under the Domestic Blanket
Order does not take the form of an individual “certificate” in the
10 CHINA UNICOM (AMERICAS) OPS. V. FCC
A few years prior to this modification of the domestic
authorization process, the FCC had also simplified its
process for reviewing applications from foreign carriers. In
1997, the FCC adopted a “presumption in favor of foreign
participation” in telecommunications services and “open
entry policies” for foreign-owned companies from countries
that are members of the World Trade Organization. Rules &
Policies on Foreign Participation in the U.S. Telecomms.
Mkt., 12 FCC Rcd. 23891, 23897 ¶ 13 (1997) (hereinafter
“Foreign Participation Order”). Given its “statutory
obligation to ensure that [a] grant of Section 214 authority is
consistent with the public convenience and necessity,” the
FCC stated that it would continue to “consider[] the overall
impact of the grant of authority on the public interest” when
assessing “all applications, from both foreign and domestic
applicants,” as it had since the enactment of the
Communications Act. Id. at 23910 ¶ 44.
The public interest factors that the FCC assesses relative
to foreign carriers include “national security, law
enforcement, foreign policy and trade policy concerns
brought to [the Commission’s] attention by the [relevant]
Executive Branch [agencies].” Foreign Participation
Order, 12 FCC Rcd. at 23917 ¶ 59. Recognizing that
“foreign participation in the U.S. telecommunications
market may implicate significant national security or law
enforcement issues uniquely within the expertise of the
Executive Branch,” id. at 23919 ¶ 62, the FCC has long
“worked closely with Executive Branch agencies to ensure
traditional sense, see 47 C.F.R. § 63.01, we will continue to refer to the
resulting authorization of service, in the context of a specific company
such as CUA, as that company’s “certificate,” because that is the
statutory term for the requisite authorization. See 47 U.S.C. § 214(a).
CHINA UNICOM (AMERICAS) OPS. V. FCC 11
that [its] actions and policies affecting international
telecommunications do not impede or thwart [those] of the
Executive Branch,” id. at 23917 ¶ 59. The Foreign
Participation Order affirmed that the FCC would continue
this longstanding practice. See id. at 23918 ¶ 61. While
national security concerns related to foreign carriers are
“quite rare,” the FCC stated that any input regarding them
“would . . . be important to [the Commission’s] public
interest analysis of a particular application” and affirmed
that it would “continue to accord deference to the expertise
of Executive Branch agencies in identifying and interpreting
issues of concern related to national security, law
enforcement, and foreign policy.” Id. at 23919 ¶ 63. In this
manner, the FCC has continued to evaluate whether a
carrier’s provision of telecommunications services in the
United States implicates national-security-related risks due
to the carrier’s foreign ownership. See id. at 23918 ¶ 61. In
the Foreign Participation Order, the FCC explicitly
“emphasize[d] that [it] ha[s] authority to enforce [its]
safeguards through fines, conditional grants of authority and
the revocation of authorizations.” Id. at 23900 ¶ 19; see also
id. at 24022 ¶ 295.
B
CUA is incorporated in California and headquartered in
Virginia. It is wholly owned by China Unicom Global
Limited (“CUG”), a Hong Kong company, which is in turn
wholly owned by China Unicom (Hong Kong) Limited
(“CUHK”), a company publicly traded on the Hong Kong
Stock Exchange. CUHK’s ultimate parent is China United
Network Communications Group Company Limited
12 CHINA UNICOM (AMERICAS) OPS. V. FCC
(“CU”), which is wholly owned by the Chinese
government. 5
In 2002, the FCC issued international § 214 certificates
to CUA’s predecessor entities, China Netcom USA
Operations Limited and China Unicom USA LLC. These
certificates were subject to the general conditions that the
FCC imposes on all international certificates. CUA, through
its predecessor entities, also began domestic
telecommunications operations in 2002 under the general
authorization that the FCC has provided to common carriers
since the 1999 Domestic Blanket Order. See 47 C.F.R.
§ 63.01. As noted earlier, we will continue to use the
statutory term “certificate” to refer to the authorization
provided to CUA under the Domestic Blanket Order, even
though no individualized formal certificate is issued under
that order. See supra note 4.
C
1
In recent years, the FCC, in consultation with other
Executive Branch agencies, has undertaken a reassessment
of the national security and law enforcement risks posed by
Chinese government-owned telecommunications companies
operating in the United States. For example, in May 2019,
the FCC denied an application for § 214 authorization
submitted by China Mobile, a different carrier that is also
owned by the Chinese government. See China Mobile Int’l
(USA) Inc., 34 FCC Rcd. 3361 (2019) (hereinafter “China
Mobile Order”).
5
A complete accounting of CUA’s ownership chain is outlined below.
See infra Section I(C)(1).
CHINA UNICOM (AMERICAS) OPS. V. FCC 13
In April 2020, President Trump signed Executive Order
No. 13913, which formally established an Executive Branch
committee, comprised of members from the Departments of
Defense, State, Justice, and Commerce, as well as other
relevant agencies, “to assist the FCC in its public interest
review of national security and law enforcement concerns
that may be raised by foreign participation in the United
States telecommunications services sector.” See Exec.
Order No. 13,913, 85 Fed. Reg. 19643, 19643 ¶ 3 (Apr. 8,
2020). Specifically, the Order authorizes the Committee for
the Assessment of Foreign Participation in the United States
Telecommunications Services Sector (“the Committee”) to
make recommendations to the FCC about whether to grant
or deny § 214 applications and whether to revoke existing
authorizations. See id. at 19645 ¶ 6, 19646 ¶ 9(b).
Shortly after the formal establishment of the Committee,
the FCC’s International, Wireline Competition, and
Enforcement Bureaus jointly ordered CUA on April 24,
2020 to show cause why the FCC should not initiate
proceedings to revoke its § 214 certificates. China Unicom
(Ams.) Operations Ltd., 35 FCC Rcd. 3721 (2020)
(hereinafter “Order to Show Cause”). The Order to Show
Cause explained that the FCC’s findings in the China Mobile
matter concerning the susceptibility of Chinese state-owned
enterprises, including subsidiaries, to Chinese government
influence, control, and exploitation raised questions about
CUA’s “ongoing qualifications to hold domestic and
international section 214 authorizations.” Id. at 3724 ¶ 7.
The order gave CUA the opportunity to file a written
response providing evidence as to its ongoing qualifications
to hold § 214 certificates and to explain why the FCC should
not initiate proceedings to revoke them. Id. at 3724–25 ¶ 8.
It also directed CUA to respond to specific questions about
14 CHINA UNICOM (AMERICAS) OPS. V. FCC
its ownership, operations, and corporate governance. Id. at
3725 ¶ 9. Specifically, the Order to Show Cause requested
that CUA include the following information in its response:
(1) “a detailed description of the current ownership and
control (direct and indirect) of the company and the place of
organization of each entity in the ownership structure”;
(2) an “identification of [CUA’s] officers, directors, and
senior management officials, their employment history
(including prior employment with the Chinese government),
and their affiliations with the Chinese Communist Party
[(‘CCP’)] and the Chinese government”; (3) “an
identification of all officers, directors, and other senior
management of entities that hold ten percent or greater
ownership interest in [CUA], their employment history
(including prior employment with the Chinese government),
and their affiliations with the [CCP] and the Chinese
government”; and (4) “a description of the extent to which
[CUA] is or is not otherwise subject to the exploitation,
influence and control of the Chinese government.” Id. at
3725–26 ¶ 9.
The FCC had also discovered that when an internal
reorganization transferred control of CUA from CUHK to
one of CUHK’s wholly owned subsidiaries, CUA failed to
file the required pro forma notification of this transfer in
compliance with FCC rules. See Order to Show Cause, 35
FCC Rcd. at 3726 ¶ 9 & n.31. The FCC requested in the
Order to Show Cause that CUA confirm whether there had
been an internal transfer of control and whether the FCC had
been properly notified. See id.
In its response to the Order to Show Cause, CUA argued
that revocation of § 214 certificates is a limited
“enforcement remedy” for serious misconduct, which it
claimed had not been alleged against CUA, and that the FCC
CHINA UNICOM (AMERICAS) OPS. V. FCC 15
could not initiate revocation proceedings on the basis of
unsubstantiated concerns about national security risks posed
by CUA’s ownership structure. CUA stated that, if such
proceedings were instituted, “the Commission was required
to conduct a full hearing under its formal adjudication rules
before taking any action.” CUA also provided its responses
to the FCC’s specific questions regarding its ownership,
corporate governance, and susceptibility to Chinese
government influence.
With regard to CUA’s ownership structure, the FCC’s
Order to Show Cause had specifically asked about direct and
indirect “control” of CUA. In response, CUA provided an
exhibit that outlined its ownership structure and purported to
explain the ownership percentages held by each entity as
follows:
CUA is 100% owned by CUG, a
registered Hong Kong company, which in
turn is 100% owned by CUHK;
CUHK, a registered Hong Kong
company listed on the New York and
Hong Kong Stock Exchanges, is 26.4%
owned by China Unicom Group
Corporation (BVI) Limited (“CUG
BVI”), 53.5% owned by China Unicom
(BVI) Limited (“CU BVI”), and 20.1%
owned by public shareholders;
CUG BVI, a registered British Virgin
Islands company, is 100% owned by CU;
CU BVI, also a registered British Virgin
Islands company, is 17.9% owned by CU
and 82.1% owned by China United
16 CHINA UNICOM (AMERICAS) OPS. V. FCC
Network Communications Limited (“CU
A-Share”); 6
CU A-Share, a registered Beijing
company listed on the Shanghai Stock
Exchange is 36.7% owned by CU, 35.2%
owned by “a group of strategic
investors,” 25.5% owned by public
shareholders, and 2.6% owned by
employees; and
CU, a registered Beijing company, is
98.45% owned by the State-owned Asset
Supervision and Administration
Commission of the State Council, a
Chinese government entity.
This exhibit, along with CUA’s statements, represented that
CU, “through its ownership in CU A-Share, CU BVI, and
CUG BVI[,] ha[d] an effective interest of approximately
52.1% of [CUHK’s] equity” (emphasis added). 7 Again,
CUHK wholly owns CUA through CUG.
Regarding corporate governance, CUA explained that,
as a California corporation, it is managed and controlled by
its board of directors. CUA’s bylaws provide that the
number of directors is fixed by CUG, which “appoints the
board members and management team, and approves the
annual business plan and budget of CUA.” CUA further
explained that CUHK, which wholly owns CUG, is
responsible for establishing and maintaining both CUG and
6
We adopt the abbreviation both parties use for this entity.
7
CUHK’s 2020 Form 20-F filing with the SEC, by contrast, stated that
CU indirectly owned 79.9% of CUHK. See infra at 46.
CHINA UNICOM (AMERICAS) OPS. V. FCC 17
CUA’s risk management and internal control systems, which
include financial, operational, and compliance controls.
As to the identities and government affiliations of the
officers and directors of CUA and its parent entities, CUA’s
response listed only the officers, directors, and senior
management for CUA and CUG, rather than for all entities
with more than a 10% indirect interest in CUA, as the FCC
had requested. CUA noted in its response that “certain
directors of CUG are [CCP] members,” but otherwise did
not identify the specific individuals, nor indicate whether
other parent entity officers and directors had government
affiliations.
With respect to the FCC’s inquiry about CUA’s apparent
failure to file a required notice of transfer of control, CUA
confirmed that it had indeed failed to notify the FCC of the
internal reorganization. It did not, however, retroactively
file the requisite notification at the same time it filed its
response.
Finally, regarding the FCC’s inquiry into the extent to
which CUA may be subject to exploitation, influence, and
control by the Chinese government, CUA argued that the
FCC had unfairly alleged “unspecified national security
concerns about ‘exploitation’ and ‘influence’” and did not
set out “specific facts or parameters” regarding Chinese
government “control” to which CUA could respond. CUA
represented that “none of the company’s senior management
or board members was appointed by the Chinese
government,” that CUA is required to operate in compliance
with U.S. laws and regulations, and that CUA “has never
received, and would not accept, any instructions on
regarding how to run its operations from the Chinese
government.”
18 CHINA UNICOM (AMERICAS) OPS. V. FCC
After CUA filed its response, the FCC International
Bureau requested that the Committee give its own response
to CUA’s arguments against revocation. The Committee
provided that response in the form of a letter submitted to the
FCC on November 16, 2020. 8 The Committee’s letter did
not make a formal recommendation regarding revocation of
CUA’s § 214 certificates, in part because of the “limited
time” the Committee had to offer a response. However, the
Committee’s letter explained that “changes in [Chinese] law
have resulted in [Chinese government]-owned
and -controlled companies presenting significant national
security and law enforcement risks that are difficult to
mitigate.” As a result, it said, “[t]he national security
environment has changed significantly since 2002,” when
CUA’s § 214 certificates were initially granted. The
Committee’s letter described assessments by several of its
agencies regarding the national security threats posed by
China, including economic espionage, threats to critical
infrastructure, and cyberattacks. With regard to
telecommunications specifically, the Committee’s letter
highlighted federal legislation enacted in 2017 that prohibits
the spending of loans or grants on telecommunications
equipment from entities connected to the Chinese
government. See National Defense Authorization Act for
Fiscal Year 2018, Pub. L. No. 115-91, § 1656, 131 Stat.
1283, 1762 (2017).
The Committee’s letter then addressed evidence that
CUA’s parent entities are led by board directors and
8
Throughout its letter, the Committee repeatedly referenced a June 9,
2020 report regarding threats posed by Chinese government-owned
carriers, which was prepared by the staff of the Permanent Subcommittee
on Investigations (“PSI”) of the Senate Committee on Homeland
Security and Governmental Affairs (“the PSI Report”).
CHINA UNICOM (AMERICAS) OPS. V. FCC 19
executive officers who are members of the CCP, arguing that
this made CUA “vulnerable to direct exploitation” by the
Chinese government, including through CCP directives. It
asserted that CUA’s ultimate parent company, CU, has
already demonstrated compliance with CCP and Chinese
government requests, including, notably, by providing
material assistance to the CCP’s mass surveillance initiatives
against the Uyghur population in Xinjiang. The letter also
discussed recent Chinese laws, including the 2017
Cybersecurity Law and the 2017 National Intelligence Law,
which “impose affirmative legal responsibilities on Chinese
and foreign citizens, companies, and organizations operating
in China to provide access, cooperation, and support for
Beijing’s intelligence gathering activities.” The Committee
noted that CUA’s corporate parents, CU and CUHK, “have
acknowledged being subject to” these laws.
The Committee letter described CUA as providing
global “telecommunications and [i]nternet services,” as well
as “data center and cloud-based services.” The Committee
expressed concerns that CUA’s capabilities, physical U.S.
infrastructure, and U.S. operations “provide opportunities
for [Chinese] state actors to engage in economic espionage,
to collect, disrupt, or misroute U.S. communications, and to
access U.S. customer data.” It claimed that such risks are
heightened by CUG’s management and storage of CUA’s
American customer records in Hong Kong, by CUA’s
various parent entities’ compliance with Chinese
cybersecurity and intelligence laws, and by CUG’s ability to
remotely configure CUA’s network.
Finally, the Committee letter stated that, based on the
above concerns, “as well as those identified in the
[Committee’s] recommendations for [other] . . . similarly
situated companies, it does not appear that a mitigation
20 CHINA UNICOM (AMERICAS) OPS. V. FCC
agreement with CUA would be feasible” to assuage the
national security risks associated with CUA’s ongoing
retention of its § 214 certificates.
The FCC afforded CUA an opportunity to respond to the
Committee’s letter. CUA filed a response, noting that the
letter did not specifically recommend revoking CUA’s § 214
certificates and contending that the letter only offered
general observations about Chinese law and policies, the
conduct of other Chinese government-owned companies,
and U.S. policy toward China. Furthermore, CUA argued,
the letter did not allege any specific misconduct by CUA and
therefore could not serve as the basis for revoking its § 214
certificates.
2
After assessing the responses received as a result of the
Order to Show Cause, the FCC on March 19, 2021 issued an
order instituting proceedings to determine whether to revoke
CUA’s § 214 certificates. See China Unicom (Ams.)
Operations Ltd., 36 FCC Rcd. 6319 (2021) (hereinafter
“Institution Order”).
In its order, the FCC stated that CUA’s responses thus
far had been insufficient to demonstrate that it was “not
susceptible to the exploitation, influence, or control of the
Chinese government.” Institution Order, 36 FCC Rcd. at
6335 ¶ 26. The FCC also stated that CUA’s “representations
to the Commission and to other U.S. government agencies”
raised additional concerns about its candor because CUA
had “omitted crucial information” in its responses to the
FCC “that was disclosed to the Senate [PSI] and published
in the PSI Report” and CUA had “failed to fully respond to
several questions posed by the Order to Show Cause.” Id. at
6353 ¶ 49; see also supra note 8. In light of these asserted
CHINA UNICOM (AMERICAS) OPS. V. FCC 21
discrepancies, the Institution Order specifically requested
descriptions of “policies or agreements concerning [CUA’s]
corporate governance,” information on the storage and
accessibility of U.S. customer records, descriptions of
policies to protect such information, and explanations of the
discrepancies and omissions in CUA’s statements.
Institution Order, 36 FCC Rcd. at App’x A. The Institution
Order also noted that, while CUA admitted in its response to
the Order to Show Cause that it had not filed the missing
transfer-of-control notification, CUA still had not yet taken
any steps to correct its error by retroactively filing the
notification. 9 See Institution Order, 36 FCC Rcd. at 6356
¶ 55.
The Institution Order set forth the following procedures
for the proceeding: (1) the FCC afforded CUA 40 days to
answer 13 additional questions the Commission asked, as
well as to provide arguments and evidence in written
submissions supporting its position that the § 214
certificates should not be revoked; (2) the Executive Branch
agencies and the public would have 40 days to respond to
CUA’s response; and (3) CUA would have an additional 20
days to provide further evidence or arguments in support of
its position. See 36 FCC Rcd. at 6320 ¶ 1. The order went
on to outline the FCC’s asserted grounds for revoking
CUA’s § 214 certificates, including national security
concerns specific to CUA as well as CUA’s alleged lack of
candor and trustworthiness before the Commission. See id.
at 6321–23 ¶¶ 3–4, 6334–57 ¶¶ 24–56. The FCC also
9
Indeed, even after the Institution Order again pointed out this omission,
it would take CUA until September 8, 2021—nearly a year and a half
after the FCC first informed CUA of the problem—to retroactively file
the necessary paperwork.
22 CHINA UNICOM (AMERICAS) OPS. V. FCC
explained that the procedures it was adopting complied with
due process and FCC regulations and that a formal hearing
before an administrative law judge (“ALJ”) was not
necessary and would not be helpful to the resolution of the
matter. See id. at 6328–33 ¶¶ 16–23.
CUA filed a 49-page response, in which it again
reiterated its arguments that the FCC lacked the authority to
revoke its § 214 certificates absent a demonstration of
serious misconduct and that CUA was entitled to a formal
hearing as to whether its certificates should be revoked.
Regarding the allegations that CUA had not been
forthcoming in its responses to certain questions posed in the
Order to Show Cause and that it had provided different
information regarding its ownership and management to the
Senate PSI, CUA argued that any discrepancies did not
reflect an intent to mislead the FCC, but were instead
attributable to the FCC assertedly having asked for—or
CUA having understood the FCC as asking for—different
information than what the Senate PSI had requested. Of
particular interest to the FCC was CUA’s failure to disclose
the existence of a confidentiality agreement between CUA
and CUG that governed access to American records and
network information. See Institution Order, 36 FCC Rcd at
6354 ¶ 51. CUA, for its part, argued that it had not
understood the FCC’s questions regarding ownership and
corporate governance to be soliciting information about this
agreement, which CUA had previously provided to the
Senate PSI during the drafting of the PSI Report.
3
In February 2022, the FCC issued an order revoking
CUA’s § 214 domestic and international certificates. See
China Unicom (Ams.) Operations Ltd., 37 FCC Rcd. 1480
CHINA UNICOM (AMERICAS) OPS. V. FCC 23
(2022) (hereinafter “Revocation Order”). The FCC found
that CUA had failed to dispel the national security concerns
arising from its ultimate Chinese government ownership and
that CUA had demonstrated a lack of candor and
trustworthiness in its representations to the Commission. Id.
at 1481 ¶ 2. The FCC therefore concluded that revocation
was warranted. See id. at 1480–81 ¶¶ 1–2, 1508–09 ¶ 49.
First, the Revocation Order affirmed that one of the
purposes of the Communications Act is to help protect “the
national defense,” and that therefore, as part of the “public
interest analysis” that the FCC undertakes to ensure that
§ 214 certificates comport with “the present or future public
convenience and necessity,” the FCC has long considered
“national security” and “foreign policy concerns” related to
a carrier’s foreign ownership. 37 FCC Rcd. at 1481–83,
¶¶ 3–5 (emphasis omitted). The FCC determined that
revocation of CUA’s § 214 certificates on the basis of
national security concerns was amply supported by the
record. See id. at 1494–95 ¶¶ 25–26, 1508–33 ¶¶ 49–77.
The FCC also “reject[ed] CUA’s various procedural
arguments,” finding that its approach was “consistent with
principles of due process and applicable law and provided
CUA with sufficient notice and several opportunities to be
heard.” Revocation Order, 37 FCC Rcd. at 1497 ¶ 29.
Specifically, the FCC determined that neither its own
regulations and precedent nor the dictates of due process
under Mathews v. Eldridge, 424 U.S. 319, 335 (1976),
required a formal evidentiary hearing and that a written
evidentiary record was sufficient to decide the case. See
Revocation Order, 37 FCC Rcd. at 1497–1500 ¶¶ 31–36.
The Revocation Order then discussed CUA’s ownership
and management in detail, ultimately concluding that CUA
24 CHINA UNICOM (AMERICAS) OPS. V. FCC
is indirectly owned by the Chinese government. See 37 FCC
Rcd. at 1484–86 ¶ 7, 1509 ¶ 50.
Next, the FCC summarized how the Executive Branch
agencies’ national security concerns regarding CUA’s
Chinese government ownership were amplified by certain
Chinese intelligence and cybersecurity laws 10 that
potentially could be used to obtain CUA’s compliance with
Chinese government requests for information, such as
communication intercepts and identifying information about
U.S. customers. See Revocation Order, 37 FCC Rcd. at
1521–22 ¶ 64, 1539–40 ¶¶ 83–85. Thus, the FCC concluded
“that CUA’s retention of section 214 authority presents
national security and law enforcement risks that warrant
revocation.” Id. at 1530 ¶ 74.
The FCC also revoked the certificates on the alternative
ground that CUA’s responses to the Commission throughout
the proceedings had demonstrated a lack of candor and
trustworthiness. See Revocation Order, 37 FCC Rcd. at
1555 ¶ 111. The FCC determined that, among other things,
“CUA failed to provide the Commission with crucial
information” regarding its ownership structure, board of
directors’ CCP membership, the involvement of its parent
and other related entities in its management and operations,
and the existence of a relevant confidentiality agreement,
despite specific requests for such information. Id. On the
record, the FCC concluded that “CUA cannot be trusted to
cooperate with the Commission or the Executive Branch
agencies, to comply with the Commission’s rules, and,
importantly, to assist with the Commission’s statutory
10
These laws included the 2017 Cybersecurity Law, the 2017 National
Intelligence Law, the 2018 Cybersecurity Regulation, and the 2019
Cryptography Law. Revocation Order, 37 FCC Rcd. at 1524 ¶ 67.
CHINA UNICOM (AMERICAS) OPS. V. FCC 25
obligations to act ‘for the purpose of the national defense
[and] for the purpose of promoting safety of life and
property.’” Id. at 1556 ¶ 111 (quoting 47 U.S.C. § 151).
Finally, the FCC found that mitigation measures,
including those proposed by CUA in its responses, “would
not address the significant national security and law
enforcement concerns present in this case.” Revocation
Order, 37 FCC Rcd. at 1563 ¶ 124. The FCC again noted its
“longstanding policy of according deference to the
Executive Branch agencies’ expertise in identifying and
mitigating risks to national security” and “in monitoring
carriers’ compliance with risk mitigation agreements.” Id.
The Revocation Order then explained that the FCC agreed
with the Committee’s assessment that, “given CUA’s
relationship with the [Chinese] government and the
significant national security and law enforcement concerns
resulting from that relationship,” “the underlying foundation
of trust that is needed for a mitigation agreement of this type
to adequately address national security and law enforcement
concerns is not present,” and so “the opportunity for
effective mitigation with CUA is illusory at best in the
current national security environment.” Id.
In light of the foregoing, the FCC ordered that CUA’s
domestic and international § 214 certificates be revoked and
that CUA discontinue all services provided pursuant to § 214
within 60 days. See Revocation Order, 37 FCC Rcd. at 1568
¶¶ 135–36.
D
CUA timely filed its petition for review of the FCC’s
revocation order, naming as respondents both the FCC and
the United States. We have jurisdiction under 28 U.S.C.
§§ 2342(1) and 2343. CUA subsequently filed an
26 CHINA UNICOM (AMERICAS) OPS. V. FCC
emergency request for a temporary stay and a motion to stay.
This court denied both the request and the motion on March
4, 2022.
II
At the outset, CUA argues that, as a matter of law, the
FCC lacks any statutory authority to revoke a § 214
certificate, except as a penalty imposed in connection with
adjudicated violations of applicable law. On that basis, CUA
asks us to set aside the FCC’s revocation order as being “not
in accordance with law” and “in excess of statutory
jurisdiction, authority, or limitations.” 5 U.S.C.
§ 706(2)(A), (C). In its answering brief, the FCC asked us,
in reviewing this issue, to defer to the FCC’s interpretation
of the Communications Act under Chevron U.S.A, Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 843
(1984). However, the Supreme Court recently overruled
Chevron in Loper Bright Enterprises v. Raimondo, 144
S. Ct. 2244, 2272–73 (2024), and we therefore “must
exercise [our] independent judgment in deciding whether
[the] agency has acted within its statutory authority.” Id. at
2273. Accordingly, we review de novo whether the FCC
correctly interpreted the scope of its authority under the
Communications Act. Id. at 2261.
A
As noted earlier, § 214 of the Communications Act
provides that no common carrier “shall acquire or operate”
or “construct[]” any telecommunications line without first
obtaining the necessary certificate from the FCC authorizing
the carrier to engage in such acquisition, operation, or
construction. 47 U.S.C. § 214(a). The FCC’s power to grant
such certificates is set forth in § 214(c), which provides, in
relevant part, as follows:
CHINA UNICOM (AMERICAS) OPS. V. FCC 27
The Commission shall have power to
issue such certificate as applied for, or to
refuse to issue it, or to issue it for a portion or
portions of a line, or extension thereof, or
discontinuance, reduction, or impairment of
service, described in the application, or for
the partial exercise only of such right or
privilege, and may attach to the issuance of
the certificate such terms and conditions as in
its judgment the public convenience and
necessity may require.
Id. § 214(c). In addition to this and other specific authorities,
the FCC has been given, in § 4(i) of the Act, a general
ancillary authority to “perform any and all acts, make such
rules and regulations, and issue such orders, not inconsistent
with [the Act], as may be necessary in the execution of its
functions.” Id. § 154(i).
CUA argues that, because § 214 expressly refers only to
a power to “issue” a certificate, to “refuse to issue” a
certificate, or to “attach” conditions to “the issuance of the
certificate,” the FCC has not been granted the power to
revoke a certificate. See 47 U.S.C. § 214(c). For multiple
reasons, we do not believe that this is a reasonable reading
of the statute. Rather, as we shall explain, the statute’s grant
of authority to “issue” certificates to telecommunications
carriers must be understood as carrying with it an implied
incidental authority to revoke such documents. See Haig v.
Agee, 453 U.S. 280, 290–91 (1981) (holding that the State
Department’s statutory authority to “grant and issue
passports” included an implied authority to revoke passports
(citation omitted)); cf. Myers v. United States, 272 U.S. 52,
164 (1926) (stating that “the President’s power of removal is
28 CHINA UNICOM (AMERICAS) OPS. V. FCC
further established as an incident to his specifically
enumerated function of appointment by and with the advice
of the Senate, but that such incident does not by implication
extend to removals the Senate’s power of checking
appointments”).
As an initial matter, CUA’s argument—that a power to
revoke certificates cannot be found to exist unless it is
specifically and expressly recited in the statute—completely
ignores the concept of implied ancillary authorities and, in
doing so, ultimately proves too much. If Congress’s failure
to include an express power to “revoke” a certificate truly
means that the agency lacks such a power, the result would
be that once a certificate is issued, it would be like the
proverbial edict under “the law of the Medes and the
Persians, which cannot be revoked.” Daniel 6:8 (RSV).
Even CUA does not endorse this extreme position, because
it acknowledges that the agency can revoke a certificate as
“an enforcement penalty for misconduct.” However, this is
a larger concession than CUA appears to realize, because
CUA does not identify any provision of the Act that
expressly allows revocation of certificates as a punishment
for misconduct. Section 214 contains provisions allowing
for judicial injunctive relief against violations of the Act and
for administrative imposition of monetary penalties, but it
says nothing about revoking a certificate as a penalty. See
47 U.S.C. § 214(c), (d). Indeed, when the FCC has had
occasion to explain the source of its authority to revoke a
certificate as a penalty, it has identified its general authority
under § 4(i) of the Communications Act. See CCN, Inc., 13
FCC Rcd. 13599, 13607 ¶ 12 (1998) (invoking its “authority
under Section 4(i) of the Act” in revoking the certificate of
carriers who engaged in “egregious actions and blatant
violation[s] of [FCC] rules and the Act”). But if the FCC’s
CHINA UNICOM (AMERICAS) OPS. V. FCC 29
power to revoke certificates as a penalty rests on its ancillary
authority to “perform any and all acts,” and “issue such
orders, . . . as may be necessary in the execution of its
functions,” 47 U.S.C. § 154(i), then it is hard to see why the
agency’s exercise of an ancillary revocation authority would
be strictly limited to only the penalty context. Nothing in the
language of the statute supports such a limitation, and, as a
result, CUA’s argument itself becomes atextual.
More generally, CUA errs to the extent that it attaches
talismanic significance to Congress’s omission of an express
power to revoke a certificate. The point is illustrated by
Haig v. Agee, in which the Supreme Court faced a
comparable interpretive issue. Specifically, the Court there
addressed whether the State Department “has authority to
revoke a passport on the ground that the holder’s activities
in foreign countries are causing or are likely to cause serious
damage to the national security or foreign policy of the
United States.” 453 U.S. at 282. After Agee, a former covert
CIA operative, engaged in a variety of activities overseas
that publicly opposed the CIA and that sought to “expose
CIA officers and agents,” id. at 283, the State Department
revoked his passport on the ground that Agee’s “activities
abroad are causing or are likely to cause serious damage to
the national security or the foreign policy of the United
States,” id. at 286. Agee sued the Secretary of State, and the
district court granted him summary judgment, ordering his
passport to be restored. Id. at 287–88. A divided panel of
the D.C. Circuit affirmed, holding that there was “no express
statutory authorization for the revocation,” nor any
“‘substantial and consistent’ administrative practice” of such
revocations. Id. at 288 (citation omitted). The Supreme
Court reversed. Id. at 310.
30 CHINA UNICOM (AMERICAS) OPS. V. FCC
The Court noted that the language of the Passport Act,
which had been unchanged since 1926 and materially
unchanged since 1874, Agee, 453 U.S. at 290 n.18, stated, in
relevant part, that the “Secretary of State may grant and
issue passports . . . under such rules as the President shall
designate and prescribe for and on behalf of the United
States,” id. at 290 (quoting 22 U.S.C. § 211a (emphasis
added)). Because the relevant language only referred to
“grant[ing] and issu[ing] passports,” the Court
acknowledged that the “Passport Act does not in so many
words confer upon the Secretary a power to revoke a
passport.” Id. (emphasis added). However, contrary to the
sort of simplistic argument that CUA makes here, the Court
concluded that this omission did not preclude recognition of
a revocation power generally or of a specific revocation
power based on national security concerns. Id. at 290–91.
For one thing, neither the Passport Act nor any other statute
“expressly limit[s]” the exercise of a power to revoke a
passport. Id. at 290. Moreover, giving decisive weight to
the statute’s omission of any express revocation power
would prove too much, the Court held, because the statutory
language also did not “expressly authorize denials of
passport applications.” Id. (emphasis added) (footnote
omitted). The Court stated that it had already “recognized
congressional acquiescence in Executive policies of refusing
passports to applicants” participating in a variety of illegal
conduct, and the Court perceived no basis for concluding
that a comparable revocation authority did not exist. Id.
Indeed, the Court noted that Agee ultimately “concede[d]
that if the Secretary may deny a passport application for a
certain reason, he may revoke a passport on the same
ground.” Id. at 291.
CHINA UNICOM (AMERICAS) OPS. V. FCC 31
Having thus recognized that the Secretary possessed
some measure of revocation authority, the Court turned to
the question whether the Secretary could exercise that
authority based specifically on national security grounds.
See Agee, 453 U.S. at 291–306. Exhaustively surveying the
administrative practices and policies on this point over many
decades, the Court held that the State Department’s assertion
that it possessed regulatory power to revoke passports based
on national security concerns had been “‘sufficiently
substantial and consistent’ to compel the conclusion that
Congress ha[d] approved it.” Id. at 306 (citation omitted).
That was true, the Court held, even though there were very
few examples that such a power had actually been exercised.
Id. at 301–03. The Court then proceeded to reject all of
Agee’s constitutional challenges to the revocation and to the
procedures by which it was accomplished. Id. at 306–10.
The Court therefore reversed the D.C. Circuit’s judgment.
Id. at 310.
Agee further confirms what common sense already
suggests, which is that a statutory grant of agency authority
to “issue” an authorizing document may carry with it an
implied ancillary grant of authority to “deny” and to
“revoke” such documents. Whether such an authority has
been granted generally, and if so whether it may be exercised
on particular grounds, will turn, as in Agee, on the details of
the statutory scheme and, perhaps, the relevant
administrative practice. See Gorbach v. Reno, 219 F.3d
1087, 1095 (9th Cir. 2000) (en banc) (“The formula the
government urges, that what one can do, one can undo, is
sometimes true, sometimes not.”). But the mere fact that the
Communications Act here refers only to an express power to
“issue” or to “refuse to issue” a certificate is not dispositive.
32 CHINA UNICOM (AMERICAS) OPS. V. FCC
B
We turn, then, to whether there is any other indication in
the statutory text or structure that Congress denied the FCC
any relevant authority to revoke a carrier’s § 214 certificate.
We find none.
1
Relying on United States v. Seatrain Lines, Inc., 329
U.S. 424 (1947), which held that the Interstate Commerce
Commission (“ICC”) lacked the authority to partially revoke
a certificate issued to a “water carrier” under Part III of the
Interstate Commerce Act (“ICA”), id. at 426–28, CUA
argues that the FCC’s authority under § 214 should similarly
be construed as lacking a general authority to revoke
certificates after they have been issued. The analogy is
unpersuasive, because the distinctive features of the ICA that
led to the Court’s holding in Seatrain are absent from the
Communications Act.
a
In Seatrain, a company (Seatrain) that “long ha[d] been
a common carrier of goods by water” applied for, and
received from the ICC, the “certificate” required under
§ 309(a) of Part III of the ICA to authorize the company to
carry commodities along specified shipping routes. 329 U.S.
at 425–27. Some 20 months later, in January 1944, the ICC
sua sponte reopened the proceedings concerning Seatrain’s
certificate in order to determine whether Seatrain’s
authorization to carry commodities along those routes
should be narrowed. Id. at 427. Seatrain took the position
that the ICC “was without statutory authority to make the
alteration proposed,” and it therefore “declined to offer
evidence” concerning the ICC’s inquiry into altering the
CHINA UNICOM (AMERICAS) OPS. V. FCC 33
certificate. Id. The ICC “entered an order canceling the
former certificate and directing that a different one be
issued.” Id. The new certificate “in effect deprived Seatrain
of the right to carry goods generally between the ports it
served” and instead “limited it[s] . . . operations” to only
certain specified types of carriage of goods. Id. A three-
judge district court held that the ICC lacked the authority to
alter the certificate and that, even if it did have such
authority, the ICC “should not have done so in this case
where, as the [district] [c]ourt found from evidence before it
but which had not been before the [ICC], Seatrain had
expended large sums of money in reliance upon the complete
validity of its certificate.” Id. at 427–28. The Supreme
Court affirmed, agreeing that the ICC “was without authority
to cancel this certificate.” Id. at 428.
As an initial matter, the Court rejected the ICC’s
argument that the alteration of Seatrain’s certificate fell
within the scope of a permissible exercise of a “power to
correct clerical mistakes.” Seatrain, 329 U.S. at 428.
Reviewing the relevant circumstances, the Court concluded
that “it seems apparent that the Seatrain proceedings were
reopened not to correct a mere clerical error, but to execute
[a] new policy” concerning the “carriage of . . . freight cars”
announced by the ICC in a December 1943 decision in
another case. Id. at 429.
Turning to the question of the ICC’s statutory authority
to cancel a certificate, the Court noted that the “water carrier
provisions are part of the general pattern of the [ICA] which
grants the [ICC] power to regulate railroads and motor
carriers as well as water carriers.” Seatrain, 329 U.S. at 429–
30 (footnote omitted). The Court found it significant that,
although the ICA authorized the ICC “to issue certificates to
all three types of carriers,” the ICC was “specifically
34 CHINA UNICOM (AMERICAS) OPS. V. FCC
empowered to revoke only the certificates of motor carriers.”
Id. at 430 (emphasis added). As the Court explained, this
notable difference in the statutory language governing the
three types of carriers appears to have been intentional:
In fact, when the water carrier provisions
were pending in Congress, the Commission’s
spokesman, Commissioner Eastman, seems
specifically to have requested the Congress to
include no power to revoke a certificate. The
Commissioner explained that while the
power to revoke motor carriers’ certificates
was essential as an effective means of
enforcement of the motor carrier section, it
was not necessary to use such sanctions in the
regulation of water carriers.
Id. In a footnote, the Court quoted Commissioner Eastman’s
express statement that the ICC did not believe that it needed
a similar revocation authority with respect to water carriers:
While there is room for argument, we are
inclined to believe that provision for the
revocation or suspension of water carrier
certificates or permits is not essential, if
adequate penalty provisions are provided for
violations of part III. Revocation or
suspension, in the case of motor carriers, is
believed to be the most effective means of
enforcement, since there are so many such
carriers, and the operations of the great
majority are so small, that enforcement
through penal actions in courts presents many
CHINA UNICOM (AMERICAS) OPS. V. FCC 35
practical difficulties; but this is not true of
water carriers.
Id. at 430 n.4 (citation omitted). The Court further noted that
the ICC itself had taken the view that, apart from the express
statutory revocation authority granted with respect to motor
carriers, the ICC lacked any authority to revoke motor-
carrier certificates under its “general statutory power[s].” Id.
at 430–31.
The Court next addressed, and rejected, the argument
that the ICC’s “statutory power under § 309(d)” of the ICA
“to fix ‘terms, conditions, and limitations’ for water carrier
certificate holders” allowed it to narrow the terms of
Seatrain’s certificate. Seatrain, 329 U.S. at 431. This
argument failed, the Court concluded, because any such
authority to impose terms and conditions after a certificate
had been granted “is certainly no greater than the
Commission’s authority to limit the type of service when
issuing the original certificate.” Id. (emphasis added).
Again comparing the notable differences in the respective
provisions of the ICA governing motor carriers and water
carriers, the Court held that the provisions governing water
carriers appeared affirmatively to “preclude” the ICC from
attaching to a certificate the sort of limitations at issue in
Seatrain. Id. Given that the ICC apparently lacked the
authority to impose such limitations as an exercise of its
power to impose terms and conditions “when issuing the
original certificate,” any authority to amend those terms and
conditions could not justify the ICC’s narrowing of
Seatrain’s certificate. Id. at 431–32.
Finally, the Court rejected the ICC’s argument that its
statutory authority to “suspend, modify, or set aside its
orders” under Part III allowed it to alter Seatrain’s
36 CHINA UNICOM (AMERICAS) OPS. V. FCC
certificate. Seatrain, 329 U.S. at 432 (citation omitted). The
Court held that this argument failed because the statutory
context made clear that a “certificate” was not an “order”
within the meaning of that provision. Id. Accordingly, the
Court held that a water-carrier certificate under the ICA was
“not subject to revocation in whole or in part except as
specifically authorized by Congress.” Id. at 432–33.
b
None of the arguments that led the Seatrain Court to
reject the ICC’s asserted power to cancel a water-carrier
certificate apply here.
Unlike in Seatrain, there is no suggestion in the text of
the Communications Act that Congress intentionally
withheld revocation authority from one type of comparable
common-carrier certificate while expressly granting it with
respect to another. In arguing to the contrary, CUA points
to the fact that the separate title of the Communications Act
dealing with radio licensing (Title III) contains a provision
expressly empowering the FCC to “revoke any station
license” for a variety of reasons, including “because of
conditions coming to the attention of the [FCC] which would
warrant it in refusing to grant a license . . . on an original
application.” 47 U.S.C. § 312(a)(2). We reject CUA’s
proffered analogy between the referenced provisions of the
Communications Act and the distinct provisions of the ICA
cited in Seatrain.
In our view, no negative inference can be drawn from the
fact that the “radio” licensing provisions in Title III of the
Communications Act contain an express revocation
provision, while the common-carrier certificate provisions in
Title II do not. As the Supreme Court has noted, the two
distinct regulatory systems established under Title II and
CHINA UNICOM (AMERICAS) OPS. V. FCC 37
Title III are very different, because, in “contradistinction” to
wire-telecommunications carriers, the Act recognizes that
“broadcasters are not common carriers and are not to be dealt
with as such.” FCC v. Sanders Bros. Radio Station, 309 U.S.
470, 474 (1940) (footnote omitted). In sharp contrast to the
otherwise similar common-carrier regimes created for water
carriers and motor carriers under the ICA at issue in
Seatrain, there is no basis for concluding that the very
different systems reflected in Title II and Title III of the
Communications Act should comparably be read in pari
materia. Indeed, given that broadcast licenses are generally
issued for fixed, renewable terms of up to eight years, see 47
U.S.C. § 307(c)(1), the statute reflects a clear temporal
expectation that, absent contrary indication in the statutory
text, such a license will endure for the length of that term.
The use of a fixed term is thus affirmatively inconsistent
with positing an implied power to revoke a license at any
time, and it is therefore unsurprising that Title III contains a
provision expressly recognizing an agency power of
revocation. By contrast, as noted earlier, Title II’s silence
on the temporal duration of common-carrier certificates,
which have traditionally been open-ended in length, is a
factor that weighs in favor of an implied power of
revocation.
Moreover, unlike in Seatrain, the FCC’s authority in
“issuing the original certificate” does include the authority
to deny it on the grounds invoked by the agency here. The
Communications Act identifies the “national defense” as one
of the objectives of the Act that the FCC should consider in
evaluating the public interest, see 47 U.S.C. § 151, and § 214
underscores the point by stating that applications for
certificates must be shared with the Defense and State
Departments and that the views of those additional agencies
38 CHINA UNICOM (AMERICAS) OPS. V. FCC
must be considered, id. § 214(b). Unlike Seatrain, in which
the ICC sought to use its general conditioning authority to
limit certificates on grounds it could not have invoked “when
issuing the original certificate,” 329 U.S. at 431, this is not a
situation in which the agency is attempting to use a general
authority to smuggle into the regulatory scheme a non-
statutory factor that is at odds with Congress’s crafting of
that scheme. See Civil Aeronautics Bd. v. Delta Air Lines,
Inc., 367 U.S. 316, 333 n.15 (1961) (noting that Seatrain’s
“holding may rest on an alternate ground—viz.: that the
[ICC] had no power to impose the conditions it did in the
first instance”); 11 Murphy Oil Corp. v. FERC, 589 F.2d 944,
947 (8th Cir. 1978) (stating that Seatrain “rested heavily on
the Court’s doubt that the ICC would have had, in the first
instance, statutory authority to take the action it did”
(citation omitted)).
CUA’s analogy to Title III of the Communications Act
presents other interpretive difficulties. The revocation
provision in Title III authorizes revocation, not only on
grounds that would warrant denial of an original application,
but also upon a half-dozen other grounds, including “willful
or repeated” violations of the FCC’s rules. 47 U.S.C.
§ 312(a)(4). If, as CUA contends, the textual distinctions
between Title III and Title II mean that the express
revocation authority set forth in Title III must be understood
as having been affirmatively withheld from Title II, then the
FCC would be unable to exercise revocation authority under
Title II even based on repeated rules violations. As noted
11
In noting that this alternative ground for Seatrain’s holding is also
inapplicable here, we do not, as the dissent wrongly contends, conclude
that Seatrain’s holding is “limited” to this “alternate holding.” See
Dissent at 82–83. Rather, our point is that both of the rationales
discussed in Seatrain are inapplicable here.
CHINA UNICOM (AMERICAS) OPS. V. FCC 39
earlier, CUA itself is unwilling to embrace that extreme
position, even if it is the logical consequence of its simplistic
approach to the Communications Act’s text.
CUA alternatively argues that, because the Title II
common-carrier regulations were themselves crafted by
“analogy to the regulation of rail and other carriers” in the
ICA, see Sanders Bros., 309 U.S. at 474, we should attach
controlling weight to the contrast between the motor-carrier
provisions of Part II of the ICA and the wire-
telecommunications-carrier provisions of the
Communications Act. But as we have explained, Seatrain’s
conclusion that the water-carrier provisions of the ICA did
not include a revocation power rested dispositively on the
facts that (1) the textual distinction drawn within the ICA
between the motor-carrier provisions and the water-carrier
provisions was intentional; and (2) the ICC had
affirmatively informed Congress that it did not need
revocation authority in the water-carrier context. The mere
fact that, when enacted in 1934, the Communication Act’s
provisions governing wire-telecommunications-carrier
certificates were modeled on the ICA’s 1920 railroad-
certificate provisions does not support transposing
Seatrain’s highly context-specific reading of the water-
carrier provisions of the ICA to the very different context of
Title II of the Communications Act. The specific reasons
Seatrain gave for that reading of the ICA’s water-carrier
provisions simply do not apply to § 214.
2
An agency’s assertion of an implied general revocation
authority may also be sharply limited, or even foreclosed,
when the statutory structure negates that assertion of implied
authority. See American Methyl Corp. v. EPA, 749 F.2d 826,
40 CHINA UNICOM (AMERICAS) OPS. V. FCC
835 (D.C. Cir. 1984). That may be the case, for example,
when there is a specific statutory process for altering an
agency’s grant of a certificate, waiver, or other
authorization. See id. Where Congress has provided a
particular mechanism, with specified procedures, for an
agency to make such alterations, “it is not reasonable to
infer” an implied authority that would allow an agency to
circumvent those statutory procedural protections. Ivy
Sports Med., LLC v. Burwell, 767 F.3d 81, 86 (D.C. Cir.
2014) (citation omitted); see also Delta Air Lines, 367 U.S.
at 334 (holding that “agencies desiring to change existing
certificates must follow the procedures ‘specifically
authorized’ by Congress and cannot rely on their own
notions of implied powers in the enabling act” (quoting
Seatrain, 329 U.S. at 433)). 12
But CUA neither contends that the Communications Act
sets forth any such specific statutory procedures for revoking
a certificate, nor has it pointed to any such procedural
12
In a footnote, Delta Air Lines suggested in dicta that the agency in
Seatrain actually “could have reached with impunity the result it wanted
to reach by following the procedures set out by Congress.” 367 U.S. at
333 n.15. Under this further alternative reading of Seatrain, the ICC
assertedly did have implied revocation authority (pursuant to its general
powers of reconsideration), but it simply failed to follow the proper
statutory procedures to invoke that authority. Contrary to what the
dissent posits, see Dissent at 83–85 & n.17, this reading of Seatrain does
not support CUA’s position. As we explain later, the FCC here properly
followed the procedures that are applicable to its exercise of its
revocation authority, see infra Section IV, and so this is not a situation
in which the agency has sought to invoke implied authority in order to
evade the procedural protections applicable to such action. Indeed,
CUA’s position is that the FCC simply lacks the substantive authority to
revoke its certificates on national security grounds, regardless of what
procedures are used.
CHINA UNICOM (AMERICAS) OPS. V. FCC 41
provision in the Act that the FCC would supposedly evade if
it were held to have implied revocation authority here. On
the contrary, CUA’s procedural arguments are based on the
assertion that, if the FCC has implied revocation authority
under the Communications Act, then any given exercise of
that authority must comply with (1) the particular FCC
regulations that CUA contends would then be applicable;
and (2) the provision of the APA that generally applies to
any decision to revoke a license, see 5 U.S.C. § 558. See
infra Section IV. Because the procedural provisions invoked
by CUA are generic ones that only come into play if there is
already an independent source of revocation authority, they
do not constitute the sort of specific statutory mechanism for
revocation that might preclude recognition of an implied
revocation power. Put simply, if there is no statutory
procedure for revocation that the agency could be said to be
evading by relying on implied authority, then the entire
predicate for the sort of statutory-structure argument
referenced in American Methyl is lacking.
3
Examining the relevant provisions of the
Communications Act for any other pertinent textual clues,
we are further reinforced in the correctness of our view that
the FCC has the authority to revoke a § 214 certificate based
upon national security grounds.
As noted above, the statute instructs the FCC, in
evaluating an initial application for a § 214 certificate, to
consider the “national defense” and to consult with the
Departments of Defense and State. That national defense
factor would be considered as part of the FCC’s statutory
directive to determine whether “the present or future public
convenience and necessity [may] require” the requested
42 CHINA UNICOM (AMERICAS) OPS. V. FCC
authorization. 47 U.S.C. § 214(a) (emphasis added). It
would be a strange reading of this provision to conclude that,
while the agency must, in issuing certificates, consider
expectations concerning the “future” public convenience
and necessity, it may never consider subsequent changes in
such circumstances as that “future” plays out. The
conditions surrounding the telecommunications industry,
and the various players within it, can be expected to change,
including with respect to national security considerations,
and a sclerotic view of the agency’s authority is
affirmatively inconsistent with the statute’s declared
purpose. See ANTONIN SCALIA & BRYAN A. GARNER,
READING LAW: THE INTERPRETATION OF LEGAL TEXTS 33,
63 (2012) (explaining that a “textually permissible
interpretation that furthers rather than obstructs the
document’s purpose”—which is “to be gathered only from
the text itself”—“should be favored”). 13
* * *
Accordingly, we hold that the FCC possesses statutory
authority to revoke a § 214(a) certificate by invoking
grounds that it may properly consider in denying issuance of
such a certificate as an original matter. Of course, any actual
exercise of such authority must consider the relevant
constraints that may be placed upon that action by the
Constitution, other statutes, or applicable principles of
13
Finally, although it is not necessary to our holding, the FCC’s authority
to attach appropriate “terms and conditions” to § 214 certificates, see 47
U.S.C. § 214(c), provides further support for recognizing such a
revocation authority here. Both the Domestic Blanket Order and the
Foreign Participation Order that underlie CUA’s certificates explicitly
mention and assert a revocation authority on the part of the FCC. See
Domestic Blanket Order, 14 FCC Rcd. at 11372 ¶ 12, 11374 ¶ 16;
Foreign Participation Order, 12 FCC Rcd. at 23900 ¶ 19, 24022 ¶ 295.
CHINA UNICOM (AMERICAS) OPS. V. FCC 43
administrative law. In some cases, such as ones involving
substantial reliance interests, those constraints may be
significant and may preclude a particular exercise of such
authority.
III
Here, CUA argues that the FCC’s case-specific exercise
of revocation authority does in fact violate various other
provisions of law. In addressing these challenges, we first
consider CUA’s contention that the revocation order here
should be set aside under the APA on the grounds that it was
arbitrary and capricious and that its factual conclusions were
not supported by substantial evidence. See 5 U.S.C.
§ 706(2)(A).
Our review under these APA standards “is deferential,”
and we “may not substitute [our] own policy judgment for
that of the agency.” FCC v. Prometheus Radio Project, 592
U.S. 414, 423 (2021). The “arbitrary and capricious”
standard limits us to “ensur[ing] that the agency has acted
within a zone of reasonableness and, in particular, has
reasonably considered the relevant issues and reasonably
explained the decision.” Id.; see also Baltimore Gas & Elec.
Co. v. Natural Res. Def. Council, Inc., 462 U.S. 87, 105
(1983) (“Our only task is to determine whether the
Commission has considered the relevant factors and
articulated a rational connection between the facts found and
the choice made.”). We review the factual findings
underlying the agency’s decision for substantial evidence,
see Center for Cmty. Action & Env’t Just. v. FAA, 18 F.4th
592, 598 (9th Cir. 2021), and we must uphold them if “a
reasonable mind might accept [this] particular evidentiary
record as adequate to support [the agency’s] conclusion,”
Dickinson v. Zurko, 527 U.S. 150, 162 (1999) (simplified).
44 CHINA UNICOM (AMERICAS) OPS. V. FCC
Applying these standards to the FCC’s two alternative
grounds for revoking CUA’s certificates, we reject CUA’s
contentions.
A
The FCC’s decision to revoke CUA’s certificates based
on national security concerns was reasonable and supported
by substantial evidence.
The FCC’s revocation order lays out in detail the
particular national security risks and threats posed by CUA’s
continued retention of its § 214 certificates. The relevant
Executive Branch agencies explained how the national
security situation has changed over the last two decades vis-
à-vis China, which now represents an increased threat to the
United States in terms of potential economic espionage,
cyberattacks, and intelligence-gathering efforts. Revocation
Order, 37 FCC Rcd. at 1530–33 ¶¶ 74–76. Substantial
evidence supports the FCC’s conclusion that CUA’s
ultimate Chinese government ownership as well as the
significant overlap among its board members with those of
its parent entities and the CCP itself leave it particularly
vulnerable to Chinese government influence, exploitation,
and control. See id. at 1510–12 ¶¶ 52–53, 1518–21 ¶¶ 61–
62.
Furthermore, the FCC properly concluded that there are
“significant concerns” that recently enacted Chinese
cybersecurity and intelligence laws could require Chinese
companies, including CUA’s indirect parents, to assist the
Chinese government’s intelligence-collection efforts.
Revocation Order, 37 FCC Rcd. at 1521–29 ¶¶ 64–72.
Although CUA insists that it is not itself directly subject to
these laws, the agency permissibly concluded that CUA’s
ownership by entities that indisputably are subject to such
CHINA UNICOM (AMERICAS) OPS. V. FCC 45
laws presents a material national security risk to the United
States. Id. at 1523–28 ¶¶ 66–70. The FCC explained that
CUA’s infrastructure and capabilities provide “CUA, its
controlling parent entities, and therefore the Chinese
government, with numerous opportunities to access,
monitor, store, disrupt, and/or misroute U.S.
communications in ways that are not authorized and that can
facilitate espionage and other activities harmful to U.S.
national security and law enforcement interests.” Id. at 1530
¶ 74. As the FCC noted, the record indicates that this could
include the collection or disruption of even some U.S.
government communications to international destinations.
See id. at 1534–35 ¶ 78, 1551 ¶ 102.
Moreover, the record supports the FCC’s conclusion that
CUA’s U.S. customer records are held overseas in Hong
Kong and can be accessed by its direct parent, CUG. See
Revocation Order, 37 FCC Rcd. at 1513 ¶ 55. The FCC
further noted that at least one other affiliated Hong Kong
company, China Unicom (Hong Kong) Operations Limited
(“CUHK Operations”), also has access to these U.S.
customer records, and CUA failed to explain its relationship
with CUHK Operations or why it has access to CUA’s
records. See id. at 1514–16 ¶¶ 57–58. CUA’s network
infrastructure also provides it with the capability and
opportunity “to access, monitor, store, disrupt, and/or
misroute U.S. communications,” id. at 1551 ¶ 102, including
U.S. government communications, id. at 1535 ¶ 78, “in ways
that are not authorized and that can facilitate espionage and
other activities harmful to U.S. national security and law
enforcement interests,” id. at 1530 ¶ 74. This risk is not
theoretical; CUA relies on the network operation center of
its parent entities in Hong Kong for technical support, and
46 CHINA UNICOM (AMERICAS) OPS. V. FCC
its network can be reconfigured remotely from Hong Kong.
See id. at 1513 ¶ 55.
CUA failed to adequately address the fact that its indirect
parent entities were required to comply with Chinese laws
and government directives, including certain Chinese
cybersecurity and intelligence laws. Further, CUA
represented that “none of CUG’s senior management or
members of its board of directors are affiliated with or
appointed by the Chinese government” (emphasis added),
but that statement is misleading. CUA disclosed elsewhere
in its response to the Order to Show Cause that CUG board
directors were members of the CCP, which the agency
reasonably construed to be an “affiliation” with the Chinese
government. See Institution Order, 36 FCC Rcd. at 6337–
39 ¶ 28. And although CUA argued that its and its parents’
compliance with U.S. and Hong Kong laws, respectively,
along with recently increased private investment in CUHK,
demonstrate “independent governance,” CUA never refuted
the claim that its ultimate parent, CU, was owned and
controlled by the Chinese government.
Regarding the FCC’s request for clarification as to the
difference between CUA’s representation that CU indirectly
held only a 52.1% equity interest in CUHK and CUHK’s
2020 SEC filing stating that CU indirectly owned 79.9% of
CUHK, CUA provided a revised chart of its ownership
chain. Revocation Order, 37 FCC Rcd. at 1485 n.22, 1560–
61 ¶¶ 119–20. However, CUA offered no satisfactory
explanation for this discrepancy and failed to provide a clear
breakdown of the ownership percentages that illustrate CU’s
ultimate ownership percentage of CUHK. See id. And while
CUA now argues that the ownership chart it provided in
response to the Institution Order clearly showed that CU
actually owned 79.9% of CUHK, the agency properly
CHINA UNICOM (AMERICAS) OPS. V. FCC 47
concluded that this was not in fact clear, as the chart depicted
intermediate ownership steps between CUHK and CU
without identifying the percentages ultimately controlled by
CU. See id.
Further, on this record, the FCC permissibly concluded
that, “[c]ontrary to CUA’s claims, CUG does not simply
provide input on ‘major decisions’; rather, CUG’s control is
much broader due to its role in CUA’s decision making,
provision of services, and access to and maintenance of U.S.
customer records.” Revocation Order, 37 FCC Rcd. at 1510
¶ 52 (footnotes omitted). Moreover, as noted, CUA was not
initially candid about the extensive overlap among its
directors and management and those of CUG, CUHK, and
CU, the vast majority of whom are CCP members. Id. at
1511–12 ¶ 53, 1520–21 ¶ 62. Finally, CUHK’s SEC filings
reported that CU “is effectively able to control [CUHK’s]
management, policies and business by controlling the
composition of [CUHK’s] board of directors and, in turn,
indirectly controlling the selection of [its] senior
management.” Id. at 1485 n.22.
This extensive “integrated presence” of the CCP in
CUA’s ownership and management made concrete the
FCC’s “concerns with CUA’s ownership and control by the
Chinese government,” concerns it had similarly articulated
in its order revoking the § 214 certificate of another Chinese
carrier, China Telecom. Revocation Order, 37 FCC Rcd. at
1518 ¶ 61 (citing China Telecom (Ams.) Corp., 36 FCC Rcd.
15966, 16002 ¶ 59 (2021) (hereinafter “China Telecom
Order”)). There, the FCC noted that “[t]he U.S.
[G]overnment has found that the Chinese government exerts
influence over state-owned enterprises through the [CCP],”
China Telecom Order, 36 FCC Rcd. at 16002 ¶ 59, including
by “establish[ing] its branches in companies to carry out
48 CHINA UNICOM (AMERICAS) OPS. V. FCC
activities of the [CCP],” id. at 16000 n.235. Regarding
CUA’s arguments here that its U.S. incorporation made it
sufficiently independent from its parent entities and the
Chinese government, the FCC explained that it had
previously “addressed and rejected” similar arguments “in
both the [China Mobile Order] and the [China Telecom
Order], finding that an entity’s incorporation in the United
States does not prevent that entity from being forced to
comply with Chinese government requests.” Revocation
Order, 37 FCC Rcd. at 1513 ¶ 54. Based on this evidence,
the FCC “agree[d] with the Executive Branch agencies’
statement that the potential for [CCP] influence ‘is not
theoretical.’” Id. at 1520 ¶ 62 (footnote omitted). As a
result, the Commission concluded that “CUA’s assertion
that it is ‘an independent corporation’ that is ‘sufficiently
separate from the [Chinese] government,’ is contradicted by
the record evidence.” Id. at 1510 ¶ 52 (footnote omitted).
In holding that the FCC’s determinations were
reasonable, we agree with the comparable unanimous,
separate decisions of the D.C. Circuit in two parallel cases.
In China Telecom (Americas) Corp. v. FCC, 57 F.4th 256
(D.C. Cir. 2022), the relevant Executive Branch agencies
presented similar evidence and articulated similar national
security concerns with regard to China Telecom’s ultimate
Chinese government ownership and its susceptibility to
Chinese government influence, exploitation, and control for
intelligence and espionage purposes. See China Telecom
Order, 36 FCC Rcd. at 15998–16008 ¶¶ 52–65; China
Telecom, 57 F.4th at 265–66. The FCC revoked China
Telecom’s § 214 certificate on the basis of national security
concerns and, on review under the APA, the D.C. Circuit
held the FCC’s determination to have been reasonable and
substantially supported by the record. See China Telecom,
CHINA UNICOM (AMERICAS) OPS. V. FCC 49
57 F.4th at 265–67. The court emphasized that it could not
“interfere with the agency’s latitude not merely to find facts
and make judgments, but also to select the policies deemed
in the public interest,” id. at 267 (quoting United States v.
FCC, 652 F.2d 72, 96 (D.C. Cir. 1980)), particularly “when
national security is implicated,” id. (citing Agee, 453 U.S. at
292 (“Matters intimately related to foreign policy and
national security are rarely proper subjects for judicial
intervention.”)). Because the record substantially supported
“the Commission and the Executive Branch agencies’ policy
judgment regarding the national security risk posed by China
Telecom,” the D.C. Circuit determined that it had “no basis
upon which to question the propriety of the Revocation
Order.” Id.; see also Pacific Networks Corp. v. FCC, 77
F.4th 1160, 1164–66 (D.C. Cir. 2023) (unanimously
rejecting a similar APA challenge to the FCC’s revocation
of § 214 certificates based on concerns that the carriers, who
were ultimately owned by the Chinese government, posed
national security risks and had proved themselves
untrustworthy).
Given the substantial evidence supporting the FCC’s
conclusions that CUA’s retention of its § 214 certificates
presents serious, particular national security risks, we
conclude that the FCC’s revocation of CUA’s § 214
certificates was not arbitrary and capricious and that the
factual determinations underlying its decision were
supported by substantial evidence.
B
The FCC’s alternative ground for revoking CUA’s
certificates was that it had exhibited a lack of candor and
trustworthiness with the FCC during its interactions with the
agency. See Revocation Order, 37 FCC Rcd. at 1555–56
50 CHINA UNICOM (AMERICAS) OPS. V. FCC
¶ 111. This conclusion was also amply supported and was
not arbitrary and capricious.
Honesty and transparency with government agencies are
important to assessing “an authorization holder’s ability to
comply with the [FCC’s] statutory authority and
implementing rules.” Revocation Order, 37 FCC Rcd. at
1562 ¶ 123. Such considerations take on an additional
dimension when the subject matter giving rise to the
agency’s concern about a company’s trustworthiness
involve that company’s connections to a foreign power
whose activities raise grave national security concerns. See
id. at 1563 ¶ 125. As detailed above, substantial evidence
supports the FCC’s determination that CUA had
demonstrated a serious lack of candor and trustworthiness in
its responses to the FCC’s inquiries. See id. at 1555–63
¶¶ 111–23. CUA’s answers regarding its chain of
ownership, its board of directors’ CCP membership, its
parent entities’ control over its management and operations,
and access to its U.S. customer records by non-U.S. parent
and affiliate companies contained significant omissions and
incorrect information, and they failed to fully answer the
FCC’s inquires. See id. at 1556–61 ¶¶ 112–20.
Deeming CUA’s initial responses incomplete, the FCC’s
Institution Order had reiterated the following requests,
which tracked the earlier requests made in the Order to Show
Cause: (1) “a complete and detailed description of the
current ownership and control of [CUA], including a
description of the equity interest and voting interest for any
entity that holds a ten percent or greater direct or indirect
interest in and/or controls [CUA]”; (2) “a detailed
description of the management and oversight of [CUA] by
[CUG] and any entity that holds a ten percent or greater
direct or indirect ownership interest in and/or controls
CHINA UNICOM (AMERICAS) OPS. V. FCC 51
[CUA]”; and (3) “an identification of all officers, directors,
and other senior management of all entities that hold a ten
percent or greater direct or indirect ownership interest in
and/or control [CUA], their employment history (including
prior employment with the Chinese government), and their
affiliations with the [CCP] and the Chinese government.”
Institution Order, 36 FCC Rcd. at App’x A (emphasis
omitted).
Nevertheless, knowing again exactly what information
the FCC sought, CUA failed to clarify or even acknowledge
the significant degree of management and control CUG
appears to exercise over CUA’s operations and U.S.
customer records. Regarding the repeated inquiry about
CUA’s direct and indirect ownership and management,
CUA offered a circumspect response, stating:
CUG provides shared services to CUA, as
well as all of its international subsidiaries, for
product development, technical solutions,
network monitoring and planning, order
implementation, project management, and
customer services. Other than CUG, no other
entity that holds a ten percent or greater direct
or indirect ownership interest in and/or
controls CUA . . . has management and
oversight of CUA’s operations.
Underscoring CUA’s lack of forthrightness, the
confidentiality agreement governing storage of and access to
U.S. customer records that CUA had initially failed to
disclose provided a different, previously unmentioned
entity—CUHK Operations—with access to CUA’s U.S.
customer records. See Revocation Order, 37 FCC Rcd. at
52 CHINA UNICOM (AMERICAS) OPS. V. FCC
1515–16 ¶¶ 57–58. And contrary to CUA’s representations,
the confidentiality agreement was not signed between CUA
and CUG, but between CUA and CUHK Operations, and did
not mention CUG at all. See id. at 1515–16 ¶ 58, 1542 ¶ 88.
CUA did not acknowledge this discrepancy, leaving the FCC
with “no explanation as to [CUA’s] or CUG’s relation to
[CUHK Operations], or how CUG can be considered a party
to and legally bound by [the confidentiality] agreement.” Id.
at 1516 ¶ 58.
Most importantly, the FCC found that this revelation
flatly contradicted CUA’s prior representation that it
“strictly limits access to the U.S. customer records solely to
CUA and CUG.” Revocation Order, 37 FCC Rcd. at 1542
¶ 87. Further, the confidentiality agreement mentioned an
additional document, the “Account and Passcode Security
Policy,” which CUA claimed “governs access to U.S.
customer records.” Id. at 1558 ¶ 116. While CUA informed
the FCC that the policy was only available in Chinese and
that CUA was working to translate and provide an English
copy to the Commission, it never did so. See id. On this
basis, the FCC determined that it could not be certain that
CUA would not provide access to U.S. customer records to
other entities not disclosed in the proceedings. Id. at 1541–
42 ¶ 87. All these considerations together provide sufficient
grounds to find that CUA did not exhibit candor and
trustworthiness in its dealings with the FCC.
The FCC has previously considered trustworthiness an
important factor in two recent decisions concerning other
Chinese state-owned carriers. In denying § 214
authorization to China Mobile, the FCC explained that the
company’s lack of trustworthiness in its dealings with the
U.S. Government—specifically, the U.S. Government’s
inability to trust China Mobile’s representations regarding
CHINA UNICOM (AMERICAS) OPS. V. FCC 53
compliance with potential mitigation measures to address
national security concerns—was one of the animating
reasons behind its decision. See China Mobile Order, 34
FCC Rcd. at 3379 ¶ 36. In China Telecom, the FCC found
that revocation of China Telecom’s § 214 authorizations was
warranted by the fact that China Telecom had failed to
provide certain required notifications regarding overseas
access to and storage of U.S. records and by the fact that it
had made “inaccurate, incomplete, or misleading
representations to government agencies” about “the
potential disruption or misrouting of U.S. communications.”
China Telecom, 57 F.4th at 267–68. The D.C. Circuit
agreed, holding that the FCC’s decision was based on
substantial evidence in the record. See id. at 268. Our
decision in this case aligns with our sister circuit’s decision.
IV
CUA also asserts that the FCC failed to follow the
requisite procedures prior to revoking CUA’s § 214
certificates. See 5 U.S.C. § 706(2)(D). Consistent with the
decisions of the D.C. Circuit in China Telecom and Pacific
Networks, we reject these contentions.
The Communications Act gives the FCC authority to
“conduct its proceedings in such manner as will best
conduce to the proper dispatch of business and to the ends of
justice,” 47 U.S.C. § 154(j), and also gives the agency broad
discretion to craft its own rules “of procedure and to pursue
methods of inquiry capable of permitting [it] to discharge
[its] multitudinous duties,” FCC v. Schreiber, 381 U.S. 279,
290 (1965); see also China Telecom, 57 F.4th at 268–69.
The FCC has generally chosen to exercise this discretion to
“resolve disputes of fact in an informal hearing proceeding
on a written record.” China Telecom, 57 F.4th at 268–69
54 CHINA UNICOM (AMERICAS) OPS. V. FCC
(quoting Procedural Streamlining of Admin. Hearings, 35
FCC Rcd. 10729, 10732 ¶ 11 (2020)). Here, as in China
Telecom, the FCC “reasonably determined that the issues
raised in this case could be properly resolved through the
presentation and exchange of full written submissions before
the [FCC] itself.” Id. at 269.
CUA argues that, under 47 C.F.R. § 1.91(b) and (d), the
FCC was required to conduct a hearing under the FCC’s
“subpart B” rules, which mandate an evidentiary hearing
before an ALJ prior to the issuance of a revocation order.
See also 47 C.F.R. §§ 1.201–.377. 14 But as the D.C. Circuit
noted, these rules “implement Title III of the
Communications Act and pertain to proceedings regarding
station licenses and construction permits, which are not at
issue here.” China Telecom, 57 F.4th at 269. Although the
FCC has occasionally “borrowed these procedures” in the
context of a revocation of a § 214 certificate, this “past
practice” is insufficiently consistent to support the
conclusion that the FCC “erred in law or judgment” in
declining to borrow those procedures here. Id.
We also reject CUA’s argument that, in violation of the
APA’s provisions concerning license revocation, CUA was
deprived of the “opportunity to demonstrate or achieve
compliance with all lawful requirements.” 5 U.S.C.
§ 558(c)(2). Considering the multiple opportunities that
CUA had, over the course of its interactions with the FCC,
to explain its position concerning the points of concern
raised by the agency, and the lack of cooperation and
forthrightness reflected in CUA’s overall course of conduct,
14
The FCC argues that CUA failed to raise this argument during the
agency proceedings and therefore waived it, but CUA did raise this
argument in its response to the Institution Order.
CHINA UNICOM (AMERICAS) OPS. V. FCC 55
we conclude that CUA did not need to be afforded yet
another opportunity to try to unring the bell of its ongoing
lack of trustworthiness, particularly with respect to issues
that involve serious national security concerns. See China
Telecom, 57 F.4th at 269; see also Pacific Networks, 77 F.4th
at 1165.
V
For the foregoing reasons, we deny CUA’s petition for
review.
PETITION DENIED.
56 CHINA UNICOM (AMERICAS) OPS. V. FCC
BEA, Circuit Judge, dissenting:
“The Lord giveth and the Lord taketh away. Blessed be
the Lord.” See Job 1:21 (King James). Today, the majority
declares that the Federal Communications Commission
(“FCC”) may act as the Lord in cancelling
telecommunications certificates. In its view, the FCC’s
statutory power to grant § 214 certificates under the
Communications Act of 1934 (the “Act”) necessarily
implies the power to revoke such certificates of, and solely
upon its own volition. I disagree. Unlike the majority, I find
myself constrained by the text of the statute and a regard to
separation of powers principles of our Constitution to
resolve this case otherwise.
Congress has stated the particular powers that the FCC
possesses under the Act. Revocation authority of previously
issued telecommunications certificates upon the sole
initiative and action of the Commission, but without judicial
proceedings and authorization, is not one of them. No proper
statutory construction can make that so. That reason should
dispose of the matter before us. The FCC’s attempted
revocation of the validly granted § 214 certificates
authorizing China Unicom (Americas) Operations, Ltd.
(“CUA”) to provide domestic and international
telecommunications services was ultra vires—without
lawful authority. CUA is entitled to have these certificates
reinstated. Thus, I would grant CUA’s petition for review,
vacate the FCC’s order, and remand with instructions for the
FCC to reinstate CUA’s § 214 certificates.
Because the majority instead denies CUA’s petition, I
respectfully dissent.
CHINA UNICOM (AMERICAS) OPS. V. FCC 57
I. THE TEXT
The touchstone of all questions of statutory
interpretation is the text of the particular statute at issue. Van
Buren v. United States, 593 U.S. 374, 381 (2021).
A. The Communications Act and 47 U.S.C. § 214
While perhaps not a paragon of good drafting, a detailed
review of § 214 reveals the full extent of the authorities
Congress granted to the FCC with respect to § 214
certificates. Section 214(a) provides as follows 1:
[T]he construction of a new line or [] an
extension of any line 2 . . . [requires the carrier
to] obtain[] from the Commission a
certificate that the present or future public
convenience and necessity require or will
require the [new line or its extension]:
...
[But lines that are wholly intrastate or
otherwise excepted by the Act do not need
certificates.]
...
1
I have made some edits to improve the reader’s ability to analyze the
relevant provisions at issue in this case. The text of the provision is
reformatted to separate relevant clauses. I have also provided summaries
of excerpted clauses that are not relevant to the statutory interpretation
question before the panel.
2
“As used in this section the term ‘line’ means any channel of
communication established by the use of appropriate equipment, other
than a channel of communication established by the interconnection of
two or more existing channels. . .” 47 U.S.C. § 214(a). No parties
dispute that CUA’s use of the “lines” falls within the statutory meaning.
58 CHINA UNICOM (AMERICAS) OPS. V. FCC
[The FCC, upon request, has temporary
emergency power to authorize new lines
without issuing a certificate if the proposed
lines are necessitated by the emergency.]
...
[A carrier’s] discontinu[ance], reduc[tion], or
impair[ment of] service . . . [requires it to
obtain the prior approval of] the Commission
[via] a certificate that [affirms that] neither
the present nor future public convenience and
necessity will be adversely affected[—again,
subject to an exception that a carrier can
request the FCC to authorize the cessation of
services without issuing a certificate if an
emergency situation necessitates such
cessation.]
...
[This provision applies to all communication
lines except for those lines which have the
sole purpose of connecting already existing,
approved telecommunications lines.
Telecommunications companies do not need
pre-approval to perform regular maintenance
to ensure that their existing lines are properly
functioning.]
47 U.S.C. § 214(a). The statute makes clear that a
telecommunications carrier’s ability to begin or to end its
provision of telecommunications services requires the
FCC’s prior approval. It establishes that the FCC’s authority
to act in issuing a certificate to start or to end service is
granted only upon a telecommunications company’s request
CHINA UNICOM (AMERICAS) OPS. V. FCC 59
or filing of an application with the agency. There is no
general provision authorizing the FCC to act of its own
accord (sua sponte) to grant or to revoke a certificate for a
company to operate a telecommunications line, absent that
company’s request or application for such a certificate.
Indeed, revocation of permission to commence, to
change, or to abandon service sua sponte on the
Commission’s initiative is not mentioned once in subsection
(a) of § 214—only application for such actions by applicants
and certificate holders is mentioned. The standard canon of
construction that courts apply to a statute’s provision of
powers is expressio unius est exclusio alterius. Longview
Fibre Co. v. Rasmussen, 980 F.2d 1307, 1312–13 (9th Cir.
1992). Namely, the specificity of § 214’s provision of
authority to the FCC to grant a certificate to start, to modify,
to change, or to end services only upon a
telecommunications carrier’s application would normally
imply Congress intended not to grant the FCC the authority
to take a different course of action with respect to such
certificates such as the present sua sponte action of the
Commission. See id. at 1313 (dismissing a petition for
review for a want of subject matter jurisdiction after
applying expressio unius to a statute governing the EPA’s
ability to set water quality standards for specific pollutants
because the rule the petitioners challenged was issued
pursuant to a section of the Clean Water Act not specifically
listed in the provision providing for judicial review). Here,
the majority permits the FCC to act according to authority
that is not expressly authorized in the Act. The majority
holds that the FCC properly revoked CUA’s certificates,
even though the Act permits the FCC to authorize CUA’s
cessation of its telecommunications operations only when a
certificate holder, such as CUA, applies for such a
60 CHINA UNICOM (AMERICAS) OPS. V. FCC
cessation. 3 47 U.S.C. § 214(a). Under the expressio unius
canon, the Act’s failure to grant the FCC the revocation
3
Section 214 makes clear that the FCC’s only authority to initiate
proceedings of its own accord relating to the provision of
telecommunications services pursuant to a § 214 certificate is limited to
scenarios where a telecommunications carrier is purportedly slacking in
its provision of telecommunications services—a subsection not
applicable to CUA’s case because it was not the basis for the FCC’s
actions. See 47 U.S.C. § 214(d).
But even in those subsection (d) proceedings, the FCC is not given any
revocation authority. Rather Congress authorized the FCC to take three
specific actions to incentivize a derelict company: the FCC can either
“require by order any carrier, party to such proceeding, [(1)] to provide
itself with adequate facilities for the expeditious and efficient
performance of its service as a common carrier[,] [(2)] to extend its line
or [(3)] to establish a public office.” Id. Thus, the FCC is given the
authority to assess deficient performance sua sponte. But to remedy any
such deficiency, the FCC is limited to ordering the carrier to fortify and
to upgrade its services. This express listing of ways the FCC can
mandate compliance with the demand for exceptional service does not
permit us to imply that the FCC also has the authority to revoke the
wastrel company’s license.
This textual analysis is bolstered by the fact that in subsection (d)
proceedings, the only penalty that a noncompliant carrier can be assessed
is a fine of “$1,200 for each day . . . such refusal or neglect continues.”
47 U.S.C. § 214(d). The FCC could likely also sue to enjoin the carrier’s
continued provision of inadequate service, which would constitute a
“reduction[] or impairment of service contrary to” the duly authorized
subsection (d) order. See infra note 4 (discussing 47 U.S.C. § 214(c)).
Notice, however, that an action to so enjoin would take place in a U.S.
district court subject to the normal rules of litigation, and the case would
be decided by an Article III judge. This scenario is not quite the same as
a Commission proceeding. But even in this, subsection (d), the only
subsection of § 214 that grants the FCC the authority to act sua sponte,
the terms ‘revocation’ and ‘cancellation’ are noticeably absent. As the
Supreme Court recently reaffirmed, under the expressio unius canon of
CHINA UNICOM (AMERICAS) OPS. V. FCC 61
authority it demands means the FCC was not permitted to
revoke CUA’s certificates below.
I would end my analysis there if I could. The statute
plainly forecloses the FCC’s revocation of CUA’s § 214
certificates because no such power is expressly listed. But
because the majority does not adhere to the plain text of the
Act, I must explain why the majority’s arguments to the
contrary fail to persuade. As explained below, subsection
(a) of § 214 is not the only textual clue in § 214 supporting
the statutory interpretation which leads to the conclusion that
the FCC here lacks revocation authority, where revocation is
initiated solely by the FCC and adjudicated solely in the
FCC.
Continue to subsection (b). Although the FCC must
consult with the Department of Defense and the Department
of State regarding national security concerns, see Maj. Op.
42-43, this obligation is triggered only upon the FCC’s
“receipt of an application for a[] [] certificate” from a
telecommunications company that seeks authorization to
initiate a new line or to terminate an existing one. 47 U.S.C.
§ 214(b). Thus, rather than permitting the FCC to engage in
a freewheeling analysis prompted by its own, unilateral,
unchallenged, and unexplained notions of changes to the
national security landscape, the FCC’s § 214 authority to
review national security concerns with other executive
statutory construction, the express listing of the actions the FCC can take
strongly implies that the FCC is not authorized to take actions that are
not listed. Bittner v. United States, 598 U.S. 85, 94 (2023). Were the
FCC authorized sua sponte to revoke a duly granted certificate, such as
those CUA holds, as the majority concludes it can, I would expect to find
such an express grant of authority in the text of § 214 given the Act’s
level of detail in specifying what powers the FCC has. The majority has
not identified any such textual basis for the power it gives the FCC today.
62 CHINA UNICOM (AMERICAS) OPS. V. FCC
agencies is limited to scenarios where a carrier requests
authorization to modify its existing telecommunications
services or to provide new services. Petitioner has not
requested any such modification of its services, so
subsection (b) is of no aid to the Commission.
Subsection (c) expresses—in no uncertain terms—that
the FCC’s authority over these certificates is limited only to
its power “to issue . . . or to refuse to issue” such certificates
“as applied for” by a candidate telecommunications carrier.
Id. § 214(c) (emphasis added). 4 These provisions make
4
At oral argument, the FCC’s counsel conceded that its claim of sua
sponte revocation authority could not be found in the final clause of
§ 214(c), which clause authorizes the FCC to file a lawsuit to “enjoin[]”
any unauthorized telecommunications services. As counsel correctly
explained, the FCC does not here seek to exercise revocation authority
because CUA’s operations are unauthorized. Rather, the FCC sought to
revoke CUA’s licenses because CUA’s provision of telecommunications
services is authorized and can continue unless and until its certificates
are revoked.
Although this authority in the final clause of section 214(c) does not
permit the FCC to terminate CUA’s operations solely through agency
action commenced by the agency sua sponte, the ability to enjoin
unauthorized service would likely be a tool the FCC could use to enforce
valid conditions attached to § 214 certificates. See 47 U.S.C. § 214(c).
Namely, if a telecommunications carrier continues to provide services
without complying with valid conditions in its certificate related to the
security of its telecommunications network, the carrier’s services would
no longer be authorized by the terms of its certificate. Thus, the FCC
could likely bring a suit to enjoin that carrier’s unauthorized operations.
Similarly, if a carrier committed fraud on the FCC in its initial
application for a § 214 certificate, the FCC would likely be able to enjoin
that carrier’s operations given the certificate issued was not valid in the
CHINA UNICOM (AMERICAS) OPS. V. FCC 63
clear that the FCC’s claimed authority to ‘cancel’ or to
‘revoke’ § 214 certificates of its own accord is nowhere to
be found in the text of § 214. Expressio unius is again
applicable here because the FCC is permitted to act pursuant
to § 214(c) to issue or to refuse to issue a certificate
authorizing initiation or cessation of services upon
application by a company—full stop. It stretches the English
language to suggest that the failure of Congress to prohibit
the FCC from taking other actions is tacit permission from
Congress for the FCC to act beyond that authority granted to
it. Congress wields the constitutional power to shape an
agency’s authority—agencies have no power save that
which they are granted by their constituent statutes. Am.
Libr. Ass’n v. FCC, 406 F.3d 689, 698 (D.C. Cir. 2005)
(“[T]he FCC’s power to [take certain actions] . . . is limited
to the scope of the authority Congress has delegated to it.”).
In reviewing FCC actions, courts must hew to that statutory
grant of authority and proceed no further. Id. Thus, the
majority oversteps when it holds that the FCC has sua sponte
certificate revocation authority solely initiated by agency
action when the Act expressly provides for no such thing.
Where does the majority find a basis for such revocation
first instance account the fraud. Notice again, such suits would not lie in
the Commission’s offices but in U.S. District Courts.
But, of course, none of this is applicable to CUA. The FCC has not
charged CUA with violating any conditions on its certificates, and the
FCC has not sued to enjoin CUA’s services. The only “condition” the
FCC cites in this case to justify the agency proceedings below is its own
reservation of revocation power. But as explained below, see infra
Section I.B.i, this reservation of revocation authority constitutes a valid
condition only if the Act grants the FCC power to exercise revocation
authority, absent an application and on its own initiative, in the first
instance. Because the Act does not give the FCC that power, this
“condition” does not permit the FCC to take the actions that it did below.
64 CHINA UNICOM (AMERICAS) OPS. V. FCC
authority? Not in the statute itself, but as we shall see, in
some extra-statutory notion.
The majority avoids this plain meaning of the text of the
statute by contending that there is no material difference
between the refusal to grant a certificate and the revocation
of such a certificate. Maj. Op. 32. Put another way, the
majority believes that the FCC’s power to refuse to grant a
certificate in the first instance implies that it also has the
power to initiate revocation of the certificate after issuance.
Id. For the majority, it is as simple as that.
Let us start with the premise that the power to refuse
certification is the functional equivalent of the power to
revoke certification. That position is untenable because it
ignores the reliance interests carriers may develop in their
§ 214 certificates.
A business that is refused a certificate can decide to
expend no further capital—money—for its proposed
enterprise. But a business that has been granted a certificate
is likely to have invested further capital, time, and resources
into existing infrastructure in reasonable reliance on the
vested right to build a telecommunications line pursuant to
its duly granted § 214 certificate. 5 Simply put, there is a
material difference between the power to refuse and the
power to revoke. It is not reasonable to assume that the
power to grant, to refuse, or to condition a grant also
encapsulates the power to revoke. Gorbach v. Reno, 219
F.3d 1087, 1095 (9th Cir. 2000) (en banc) (refusing Chevron
5
Although the question is not before us, it is not surprising that CUA
had raised a takings claim before the agency given the FCC’s revocation
of CUA’s § 214 certificates was bound to interfere with CUA’s
“investment-backed expectations.” See Penn Central Transp. Co. v. City
of New York, 438 U.S. 104, 124 (1978).
CHINA UNICOM (AMERICAS) OPS. V. FCC 65
deference and rejecting the Attorney General’s contention
“that the power to denaturalize is ‘inherent’ in the power to
naturalize” citizens by explaining that “[t]here is no general
principle that what one can do, one can undo” and by
identifying obvious examples of the difference between the
power to grant and the power to revoke: “A person can give
a gift, but cannot take it back. A minister, priest, or rabbi
can marry people, but cannot grant divorces and annulments
for civil purposes. A jury can acquit, but cannot revoke its
acquittal and convict.”). For this reason, the majority’s
argument that the general power to grant is the functional
equivalent of the general power to revoke does not support
its holding.
To escape this textual conclusion that the power to deny
does not equal the power to revoke, the majority cites Haig
v. Agee, 453 U.S. 280 (1981), a Passport Act case concerning
the State Department’s revocation authority of passports.
Maj. Op. 30-32. But the majority’s reliance on Agee is
misplaced. Agee was a former CIA operative who engaged
in various overseas activities that sought to threaten national
security, specifically, “expos[ing] CIA officers and agents.”
Agee, 453 U.S. at 283. The Secretary of State revoked his
passport because Agee’s “activities abroad [were] causing or
[were] likely to cause serious damage to the national security
or the foreign policy of the United States.” Id. at 286. Agee
sued the Secretary of State demanding he return Agee’s
passport. Id. at 287. The district court ordered Agee’s
passport returned, and the D.C. Circuit affirmed, holding
there was “no express statutory authorization for the
revocation.” Id. at 288. The Supreme Court reversed, but
with reasoning that has no application to this case.
The Supreme Court noted that the “Passport Act does not
in so many words confer upon the Secretary a power to
66 CHINA UNICOM (AMERICAS) OPS. V. FCC
revoke a passport. Nor, for that matter, does it expressly
authorize denials of passport applications.” Id. at 290. The
relevant language, unchanged since 1926, provided:
“The Secretary of State may grant and issue
passports, and cause passports to be granted,
issued, and verified in foreign countries by
diplomatic representatives of the United
States . . . under such rules as the President
shall designate and prescribe for and on
behalf of the United States, and no other
person shall grant, issue, or verify such
passports.”
22 U.S.C. § 211a (1981). Reading this provision in line with
the entire Passport Act, the Court observed that the Passport
Act did not “expressly limit those powers,” nor did it
“expressly authorize denials of passport applications.”
Agee, 453 U.S. at 290. Because the Supreme Court had
already “recognized congressional acquiescence in
Executive policies of refusing passports to applicants,” see
Kent v. Dulles, 357 U.S. 116, 127 (1958), the Court
recognized that the Secretary of State had some form of
revocation authority. Agee, 453 U.S. at 291-306. The Court
then surveyed the State Department’s past administrative
practices and policies. On national security grounds, the
Court found there was a “sufficiently substantial and
consistent [practice] to compel the conclusion that Congress
approved” of the State Department’s power to revoke
passports, even though the State Department rarely exercised
this power. Id. at 301-03, 306 (quoting Zemel v. Rusk, 381
U.S. 1, 12 (1965)).
CHINA UNICOM (AMERICAS) OPS. V. FCC 67
On this reasoning, the majority writes that “Agee further
confirms what common sense already suggests, which is that
a statutory grant of agency authority to ‘issue’ an authorizing
document may carry with it an implied ancillary grant of
authority to ‘deny’ and to ‘revoke’ such documents.” Maj.
Op. 32. But a closer look at the Passport Act reveals that the
majority’s common sense reasoning may not be so common
as to apply in all cases. The Communications Act—the
statute this Court is tasked with interpreting—has few
textual similarities to the Passport Act at issue in Agee and
some important dissimilarities.
The Agee Court relied heavily on the fact that the
Passport Act did not expressly limit the “denial of [a]
passport application,” nor did it “limit” the power to revoke
a passport. Agee, 453 U.S. at 290. The Communications
Act of 1934, unlike the Passport Act, specifically provides
the FCC the “power to refuse [a certificate].” 47
U.S.C. § 214(c). And the Communications Act, unlike the
Passport Act, contains other statutory provisions wherein
Congress expressly provides the FCC with the power to
revoke a license. 47 U.S.C. §§ 307, 312. Simply put, the
statutory schemes between the two Acts differ significantly.
While it may be true that Congress did not expressly limit
the FCC’s power to revoke a § 214 certificate, Congress
clearly understood it could and did authorize the FCC to
have such a revocation power in certain circumstances.
Section 312 expressly authorized the FCC to revoke a radio
station license according to specific procedures. 47
U.S.C. § 312(a). But section 214, a provision enacted at the
same time in the same Act, has no such express
authorization. See Communications Act of 1934, Pub. L.
No. 73-416, 48 Stat. 1064, 1075-76, 1087 (1934).
Accordingly, Agee cannot support the atextual conclusion
68 CHINA UNICOM (AMERICAS) OPS. V. FCC
that Congress invested the FCC with implied authority to
revoke a § 214 certificate sua sponte and solely by agency
action, no matter how much the majority thinks the common
sense surmised in Agee’s Passport Act case should be
transferable to CUA’s Communications Act case. 6
6
The majority, perhaps realizing that Agee cannot independently support
its reading of § 214, also cites Myers v. United States, 272 U.S. 52, 164
(1926), for the proposition that “the grant of authority to issue a
certificate must be understood as carrying with it an implied incidental
authority to revoke [a certificate].” Maj. Op. 28-29. But this citation is
inapt, and Myers cannot support the majority’s atextual conclusion here.
Myers is a case cut from wholly different cloth. There, the Supreme
Court resolved whether the President had the power to remove an
Executive Officer as incident to his power of appointment under Article
II, Section 2, Clause 2 of the Constitution. 272 U.S. at 164. In so doing,
the Supreme Court relied on history and separation of powers principles
from the famous Decision of 1789, a series of statutes embodying the
position that “all top executive officials . . . would serve at the
[P]resident’s pleasure per the Constitution itself,” see Akhil Reed Amar,
The Words That Made Us: America’s Constitutional Conversation,
1760-1840, at 358-60, (2021), when holding that the President had the
incidental and inherent power bestowed by Article II of the Constitution
to remove an Executive Officer. Myers, 272 U.S. at 145-46, 163-64. In
the case before us today, we do not deal with the inherent powers
bestowed by the Constitution to an administrative agency such as the
FCC for the simple reason that there are none. An administrative agency
simply has no inherent power. La. Pub. Serv. Comm’n v. FCC, 476 U.S.
355, 374 (1986) (“[A]n agency literally has no power to act . . . unless
and until Congress confers power upon it.”). The FCC, unlike the
President, is a creature of statute, not the Constitution. Id. Thus, the
FCC can exercise only the delegated powers that Congress has granted
it. Id.; see Am. Library Ass’n, 406 F.3d at 698 (“The Commission ‘has
no constitutional or common law existence or authority, but only those
authorities conferred upon it by Congress.’” (citing Michigan v. EPA,
268 F.3d 1075, 1081 (D.C. Cir. 2001)). Accordingly, the holding in
CHINA UNICOM (AMERICAS) OPS. V. FCC 69
In a footnote, the majority next cites the FCC’s power to
condition the issuance of certificates as textual support for
its holding that the Act grants the FCC its claimed revocation
power. Maj. Op. 43 n.13. But again, the power to condition
a certificate does not support the construction the majority
wishes to give the Act. Even when an agency can limit the
scope of a telecommunications company’s operations
through the imposition of conditions, the company may still
operate a telecommunications line in some condition. A flat-
out revocation would still interfere with the (albeit more
limited) vested rights and reliance interests of a company
that was granted a certificate that contains conditions.
Additionally, the Communication Act’s provisions other
than § 214 treat the power to condition a certificate as
materially different from the power to revoke a certificate.
See Antonin Scalia & Bryan A. Garner, Reading Law: The
Interpretation of Legal Texts 167 (2012) (“Context is a
primary determinant of meaning. A legal instrument[, like a
statute,] typically contains many interrelated parts that make
up the whole. The entirety of the [statute] thus provides the
context for each of its parts.”). This is clear from a
comparison of § 214 and other provisions of the Act relating
to the FCC’s issuance of radio broadcast licenses. 47 U.S.C.
§§ 307, 312. Although radio stations are subject to a
different licensing regime than are telecommunications
lines, both statutory grants of licensing authority were
Myers, a separation of powers case based on its Founding Era pedigree
reading of the Constitution and limited to the question whether any
President, under the Decision of 1789, could fire Officers he has
appointed, should not be imported to this case for the general proposition
that a power to grant necessarily implies a power to revoke, no more than
could the Biblical phrase with which the Dissent commences imply such
power.
70 CHINA UNICOM (AMERICAS) OPS. V. FCC
passed in the same act, see Pub. L. No. 73-416, 48 Stat. 1064,
1075-76, 1087 (1934), and we must read the two statutory
provisions in concert. 7 As with companies seeking § 214
certificates, commercial entities operating radio stations
must apply for a broadcast license, which application the
FCC may grant or refuse “if public convenience, interest, or
necessity will be served thereby.” 47 U.S.C. § 307(a). The
FCC is authorized to place terms and conditions on such
licenses governing how the recipient operates its radio
station. Id. § 301.
But unlike the lack of the FCC’s authority to revoke
telecommunications § 214 certificates, the FCC is
specifically authorized to revoke radio licenses according to
specified procedures outlined in the Act. Id. § 312(a). As
has long been recognized as a rule of statutory construction,
“where Congress includes particular language in one section
of a statute but omits it in another section of the same Act, it
is generally presumed that Congress acts intentionally and
7
The majority suggests that we cannot read Title II and Title III in pari
materia because the nature of a telecommunications certificate is
different than a radio license given that broadcast licenses are issued for
fixed, renewable terms, whereas telecommunications certificates are not.
Maj. Op. 37-38. But that would discount well-established rules of
statutory construction. “We do not, however, limit this inquiry to the
text of [one statutory section] in isolation. Interpretation of a phrase of
uncertain reach is not confined to a single sentence when the text of the
whole statute gives instruction as to its meaning. We thus look to the
provisions of the whole law to determine [the statute]’s meaning.” Star
Athletica, L.L.C. v. Varsity Brands, Inc., 580 U.S. 405, 414-16 (2017)
(citations, internal quotation marks, and alterations omitted)
(interpreting one section of the Copyright Act, 17 U.S.C. § 101, in light
of “[t]he statute as a whole”—that is to say, with reference to other
sections of the Copyright Act, 17 U.S.C. §§ 106, 113).
CHINA UNICOM (AMERICAS) OPS. V. FCC 71
purposely in the disparate inclusion or exclusion.” 8 Russello
v. United States, 464 U.S. 16, 23 (1983) (internal quotations
omitted) (rejecting the defendant’s argument that the
“interest” he had to forfeit to the government for violating
the Racketeer Influenced and Corrupt Organizations Act was
limited to his ownership interest in the racketeering
enterprise because Congress had made that exact limitation
express in another subsection of the same act by modifying
the word “interest” with the clause “in . . . any enterprise”
but had omitted such limiting language in the subsection
applicable to the defendant). Here, the obvious implication
of the Act’s grant of revocation authority to the FCC in one
8
This rule is well-established in our statutory interpretation caselaw: the
Supreme Court applied it in three different cases during the 2023 term.
Fin. Oversight & Mgmt. Bd. for P.R. v. Centro de Periodismo
Investigativo, Inc., 598 U.S. 339, 348–49 (2023) (holding that
Congress’s decision in the Puerto Rico Oversight, Management, and
Economic Stability Act of 2016 expressly to abrogate the sovereign
immunity of Puerto Rico and its governmental units in debt-restructuring
proceedings but “not to adopt similar language to govern other kinds of
litigation” necessarily implied that Congress did not abrogate any
sovereign immunity Puerto Rico or its governmental units enjoyed from
other legal claims); Bittner v. United States, 598 U.S. 85, 94 (2023)
(holding that when Congress expressly attached penalties to a
defendant’s failure to report foreign bank accounts on a per-account
basis for willful violations of his reporting obligations, the failure to use
per-account language to describe the penalties for non-willful violations
meant that Congress intended not to penalize non-willful violations on a
per-account basis); Bartenwerfer v. Buckley, 598 U.S. 69, 77–78 (2023)
(holding that Congress’s decision to use the word “debtor” in bankruptcy
provisions that bar the discharge of debts arising from false statements
published by the debtor himself implied that Congress’s use of the
passive voice in a provision precluding the discharge of debts obtained
by fraud implied Congress also intended the obtained-by-fraud provision
to bar the discharge of debts arising from fraud for which the debtor is
liable, even were he not the fraudster).
72 CHINA UNICOM (AMERICAS) OPS. V. FCC
licensing regime (radio) but not in another
(telecommunications) supports this reading of the statute.
Had Congress given the FCC revocation authority over
§ 214 certificates, such as CUA’s here, it would have
expressly detailed the procedures for such revocations just
as it did for the FCC’s revocation authority over radio station
licenses. 9
These statutory clues treat revocation as a distinct grant
of power that is not akin to the FCC’s power to refuse or to
9
The majority’s primary reason for rejecting the differences between
§ 214 and the provisions governing radio station licenses as textual
support for the holding that the FCC cannot revoke CUA’s certificates
fails to persuade. The majority contends that Congress needed to detail
how to revoke radio station licenses because they expire after a set time
period. Maj. Op. 38. In contrast, so says the majority, Congress did not
need to specify how the FCC could revoke § 214 certificates for the
revocation power to exist because § 214 certificates can last indefinitely.
Id.
But the majority’s reasoning actually supports quite a contrary inference.
The time-limited licensing regime for radio stations has its own natural
expiration date. Why would Congress need to detail specific
mechanisms for revocation of the licenses if the FCC could just wait out
the deadline? Presidents do this all the time with pocket vetoes—they
wait for Congress to wrap up its most recent session without deciding
whether or not to sign a law they are disinclined to give the force of law.
See The Pocket Veto Case, 279 U.S. 655 (1929). If there ever were a
need to detail the procedures for revocation, it would be to explain how
the FCC can revoke the indefinite § 214 certificates—not the time-
limited radio station licenses, which are naturally revoked after the
statutory expiration date passes. Indeed, though it is perhaps axiomatic
that “the greater includes the lesser,” the contrary would make no sense
at all. As Congress has declined to enact the procedures for sua sponte
FCC revocation of the § 214 certificates, such as those possessed by
CUA, we must leave it at that: the FCC presently has none.
CHINA UNICOM (AMERICAS) OPS. V. FCC 73
condition the grant of a certificate. The majority’s attempts
to discount these contextual clues are unpersuasive.
As stated at the commencement of this dissent, while the
Anglicans intone that “The Lord giveth and the Lord taketh
away,” the FCC is not the Lord, even of telecommunications
certificates. Nor, like the Lord, is the FCC the fount of its
own power. Congress is. La. Pub. Serv. Comm’n, 476 U.S.
at 374 (“[A]n agency literally has no power to act . . . unless
and until Congress confers power upon it. . . . [W]e simply
cannot accept an argument that the FCC may nevertheless
take action which it thinks will best effectuate a federal
policy. An agency may not confer power upon itself.”). By
its silence, Congress has expressly told us that no sua sponte
revocation authority is granted to the FCC. This lack of a
textual foundation for the FCC’s claimed power to revoke
§ 214 certificates should end the inquiry. 10
10
Possibly because it realized its textual analysis lacked merit, the FCC
also argued that its revocation authority stemmed from the Act’s so-
called necessary and proper clause. 47 U.S.C. § 154(i) (grants the FCC
ancillary authority to “perform any and all acts, make such rules and
regulations, and issue such orders, not inconsistent with this chapter, as
may be necessary in the execution of its functions”). The FCC has had
little success with this argument in the past. Courts have consistently
rejected its prior attempts to validate this purported theory of
administrative law. Section 154(i) is “not an independent source of
regulatory authority; rather, it confers on the FCC only such power as is
ancillary to the Commissions specific statutory responsibilities.”
California v. FCC, 905 F.2d 1217, 1240 n.35 (9th Cir. 1990) (emphasis
added); accord Comcast Corp. v. FCC, 600 F.3d 642, 653 (D.C. Cir.
2010) (“The [FCC]’s ancillary authority is really incidental to, and
contingent upon, specifically delegated powers under the Act.” (cleaned
up) (emphasis added)). For this reason, I agree with the majority insofar
as it declines to adopt the FCC’s reasoning on this point. But the
74 CHINA UNICOM (AMERICAS) OPS. V. FCC
B. The FCC’s Blanket Orders and Past Practice
The majority, perhaps realizing that its textual analysis
could not support revocation authority, places in a footnote
that the FCC’s “blanket” orders asserting its revocation
authority support the existence of a sua sponte revocation
power of § 214 certificates. Maj. Op. 43 n.13. 11 Yet, this
cannot support the majority’s position.
i. Blanket Orders
Start with the FCC’s blanket orders. This creative (but
ultimately flawed) argument proceeds as follows: Because
CUA’s § 214 certificates were issued after the FCC
promulgated two “blanket” orders that govern the issuance
of domestic and international § 214 certificates,
Implementation of Section 402(b)(2)(A) of the
majority’s reliance on § 154(i) to bolster the rest of its analysis is
unpersuasive. Because § 154(i) is not an independent source of power,
it can support the majority’s analysis only if one were to agree with the
majority that § 214 grants the FCC sua sponte revocation authority. As
I have attempted to demonstrate, the plain text of § 214 lacks such grant.
Thus, that the FCC has ancillary powers under § 154(i) says nothing
about whether the majority is correct that § 214 contains revocation
authority. As a result, the majority’s citation to the provision fails to
support its atextual holding.
11
The majority correctly declines to afford the FCC Chevron-like
deference in name. Maj. Op. 27. But what omnipotence other than
Chevron-like deference can bottom the majority’s conclusion? Consider
Chevron deference to an agency interpretation of a comparable act when
that act created an ambiguity “or a gap.” See generally Garfias-
Rodriguez v. Holder, 702 F.3d 504, 515-16 (9th Cir. 2012) (en banc)
(interpreting statutory gaps in the Immigration and Nationality Act).
Here, the “gap” is the lack of statutory language which provides for
agency revocation of a certificate where no application therefore has
been made. Let us not give succor to Chevron resurrectionists. See
Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2273 (2024).
CHINA UNICOM (AMERICAS) OPS. V. FCC 75
Telecommunications Act of 1996, 14 FCC Rcd 11364,
11365–66, ¶ 2 (1999); Rules & Policies on Foreign
Participation in the U.S. Telecomms. Mkt., 12 FCC Rcd
23891, 23893, 23897–98 ¶¶ 2, 13 (1997), CUA’s certificates
are bound by those blanket orders. And because those
blanket orders purported to reserve for the FCC the authority
to initiate revocation and to revoke any future certificate that
it authorized, CUA’s § 214 certificates are therefore subject
to the FCC’s power to revoke the certificates for any reason
the FCC deems proper. Namely, the majority seems to agree
with the FCC that because CUA accepted its § 214
certificates with notice of the FCC’s blanket orders, CUA
should be bound to those orders just as a train passenger is
bound to the terms written on the back of his ticket.
But not so fast; step back. Relying on the orders’
reservation of revocation authority simply puts the question
whether such reservation was valid in the first place. As the
FCC is not a legislative body, it cannot reserve for itself
power it has not been granted by Congress, the legislative
body. Thus, its attempt to reserve the power to revoke § 214
certificates at its pleasure is without legal force. 12 The
12
In constitutional law, this is called the doctrine of unconstitutional
conditions. As we previously explained, the doctrine
limits the government’s ability to exact waivers of rights
as a condition of benefits, even when those benefits are
fully discretionary. Government is a monopoly provider
of countless services, notably law enforcement, and we
live in an age when government influence and control are
pervasive in many aspects of our daily lives. Giving the
government free rein to grant conditional benefits creates
the risk that the government will abuse its power by
attaching strings strategically, striking lopsided deals and
76 CHINA UNICOM (AMERICAS) OPS. V. FCC
FCC’s argument is a bootstrap argument, plain and simple:
it is a claim that an actor can give himself a power by his
own action.
I do not write on a blank state when I object to the
majority’s reliance on this argument. To begin with, an
agency’s attempt to arrogate to itself blanket authority to do
what Congress has not authorized is a ploy to exercise
legislative authority that courts have routinely rejected. Cf.
Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 588
(1952) (holding that the President lacked the authority to
enforce a seizure order to prevent a labor dispute based on
the President’s own assertion of his power to implement a
policy that was not expressly authorized by Congress).
While the majority approves of the FCC’s search for another
way to implement its policy goals when Congress has closed
the front door, the age-old legal maxim admonishes that
“what cannot be done directly cannot be done indirectly.”
Cummings v. Missouri, 71 U.S. (4 Wall.) 277, 325 (1866);
accord Students for Fair Admissions, Inc. v. President &
Fellows of Harvard Coll., 600 U.S. 181, 230-31 (2023).
Even were we to view the FCC’s arrogation of “blanket”
revocation authority to itself as a condition that the FCC,
gradually eroding constitutional protections. Where a
constitutional right “functions to preserve spheres of
autonomy . . . [u]nconstitutional conditions doctrine
protects that [sphere] by preventing governmental end-
runs around the barriers to direct commands.”
United States v. Scott, 450 F.3d 863, 866 (9th Cir. 2006) (quoting
Kathleen M. Sullivan, Unconstitutional Conditions, 102 Harv. L. Rev.
1413, 1492 (1989)) (applying the doctrine to a Fourth Amendment
claim); see also Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S.
595, 604–05 (2013) (takings claim); Perry v. Sindermann, 408 U.S. 593,
597–98 (1972) (collecting free speech cases).
CHINA UNICOM (AMERICAS) OPS. V. FCC 77
pursuant to § 214(c), attached to the certificates CUA
received, the Supreme Court rejected the same argument
when it was raised by the Civil Aeronautics Board. Civil
Aeronautics Bd. v. Delta Air Lines, Inc. (CAB v. Delta), 367
U.S. 316 (1961). In CAB v. Delta, the Civil Aeronautics
Board argued that its reevaluation of a duly issued certificate
authorizing Delta to offer air service along specified routes
was permissible because it had reserved for itself the power
to reconsider the certificate in the terms of the certificate
itself. Id. at 317–20. Given the Board’s constituent statute
did not authorize its actions, the Supreme Court posited,
“should it make any difference that the Board has purported
to reserve jurisdiction prior to certification to make summary
modifications pursuant to petitions for reconsideration?” Id.
at 321. The Court’s resounding conclusion was that “th[is]
question[] must be answered in the negative.” Id. That is to
say, the Court held in no uncertain terms that an agency that
lacks a statutory grant of revocation authority cannot
construct such authority impliedly by requiring an applicant
to agree to conditions it imposes to issuance of certificates—
even when the conditions purport to empower the agency to
revoke the certificates. Id. at 328–29. The same rule applies
here: the FCC’s attempt to reserve revocation authority it
does not have by its assertion of that authority through a
blanket order is an impermissible attempt to create an end
run around the statute’s failure to accord the FCC such
power.
In contravention of CAB v. Delta, the FCC again pulls
itself up by its bootstraps—an impossibility save for the
majority’s assistance—to create revocation authority based
78 CHINA UNICOM (AMERICAS) OPS. V. FCC
solely on its own assertion of that power. 13 Contrary to the
majority, I would apply CAB v. Delta and hold that the FCC
cannot do what the Act does not authorize. These
‘conditions’ are invalid because there is no statutory basis
for the FCC’s claimed authority to revoke CUA’s § 214
certificates in the first instance.
ii. Past Revocations
The FCC then argues that the FCC’s past orders revoking
§ 214 certificates define the scope of the FCC’s authority.
As the Supreme Court has explained, “[p]ast practice does
not, by itself, create power.” Dames & Moore v. Regan, 453
U.S. 654, 686 (1981). Past agency practice may be relevant
evidence that suggests (but does not compel the conclusion)
that Congress has acceded to the agency’s interpretation of
its own authority. But caselaw demands that Congress have
actively legislated in the area with full awareness of the
agency’s behavior before a court will rely on its inaction to
support an already reasonable interpretation of an agency’s
enabling statute. Bob Jones Univ. v. United States, 461 U.S.
574, 599–602 (1983) (explaining that “[n]on-action by
Congress is not often a useful guide” but holding that the
numerous congressional debates over whether to grant tax
exempt status to racially discriminatory private schools
combined with the fact that Congress failed to pass over a
dozen bills aimed at overturning the Internal Revenue
Service’s determination that such schools cannot be given
13
Forgive a repeated reference to divinity. But the only entity of which
I am aware that can generate something out of nothing on its own
authority is the Creator. See Genesis 1:1–31. Yet, the majority’s atextual
holding allows the FCC to determine its own authority in manner that is
reserved solely for the divine: the FCC would now be empowered to
create its own authority from nothing by simply asserting that it
possesses such authority in a blanket order.
CHINA UNICOM (AMERICAS) OPS. V. FCC 79
tax exempt status under the tax code implied that Congress’s
“non-action” had ratified the agency’s reasonable
interpretation of its own authority).
Section 214 was last amended in 1997 to expand the
definition of common carriers. 14 Pub. L. No. 105–125, 111
Stat. 2540 (1997). This was approximately half a year before
the FCC first exercised its self-proclaimed authority to
revoke a company’s § 214 certificates. 15 CCN, Inc. et al., 13
FCC Rcd 13599, 13607 (1998). The FCC’s actions after
Congress last amended the Act do not constitute evidence
that Congress had knowledge of, let alone ratified, the
agency’s practice. See Sackett v. EPA, 598 U.S. 651, 682-
83 (2023) (holding that Congress’s use of the term “waters
of the United States” in the Clean Water Act was not a
ratification of the definition promulgated by the Army Corps
of Engineers because the Corps published its definition
14
The FCC promulgated its blanket order that purported to reserve for
itself revocation authority over all international § 214 certificates—
authority it was not given by statute—in late 1997, Rules & Policies on
Foreign Participation in the U.S. Telecomms. Mkt., 12 FCC Rcd 23891,
23893, 23897–98 ¶¶ 2, 13 (1997). But, this blanket order was published
a week after the last bill amending § 214 was presented by Congress to
the President for his signature. See Actions – S.1354,
https://www.congress.gov/bill/105th-congress/senate-bill/1354/actions
(last visited Dec. 12, 2024). Congress could not have been aware of the
FCC’s attempt to claim that it possessed revocation authority before the
FCC publicly asserted it.
15
FCC’s counsel conceded at oral argument that he was aware of no
earlier attempt by the FCC to revoke a § 214 certificate. Oral Arg.
30:30–31:02. This is not surprising given the Bell System held a
monopoly over the telecommunications markets for most of the FCC’s
history and given Congress did not express an interest in lowering the
barriers to entry or opening up telecommunications markets to all
manner of companies until it passed the Telecommunications Act of
1996, Pub. L. No. 104–104, 110 Stat. 56 (1996).
80 CHINA UNICOM (AMERICAS) OPS. V. FCC
“mere months before the [Clean Water Act] became law,”
which means its definition could not be deemed
authoritative).
Caselaw treats past practice as mere bolstering evidence
of an already reasonable textual interpretation put forward
by the agency. Compare Young v. Comm. Nutrition Inst.,
476 U.S. 974, 980–83 (1986) (explaining that the Food and
Drug Administration’s reading of its enabling statute as
affording it the discretion whether to promulgate regulations
setting forth the maximum level of adulterating substances
created by manufacturing processes permitted in food was
reasonably supported by the text of the statute and bolstering
this reasonable interpretation with the agency’s past practice
complying with that interpretation) with SEC v. Sloan, 436
U.S. 103, 118 (1978) (rejecting the Securities and Exchange
Commission’s reliance on its consistent past practice of
summarily suspending trading of specific securities by
issuing suspension orders every ten days to justify its
atextual construction of the Securities Exchange Act because
the plain text permitted the agency to issue only one order
summarily suspending trading for a maximum of ten days).
Under this caselaw, the FCC’s past revocations do not
displace the plain meaning of the text of § 214: the agency
lacks such sua sponte revocation authority. Because the
majority alludes to agency practice to substantiate its reading
of § 214—basically, another and similar bootstrap
argument—the previous revocation decisions fail to support
its atextual interpretation of the Act.
***
The FCC’s atextual arguments are an attempt by the FCC
to increase its power; understandable and perhaps common
for an agency, but still improper. The Act’s clear text
CHINA UNICOM (AMERICAS) OPS. V. FCC 81
compels me to conclude that the FCC does not have the
power through mere agency action to sua sponte initiate in-
house revocation proceedings and then revoke duly
authorized § 214 certificates, like those that it had issued to
CUA. It appears the FCC could seek an injunction against
CUA’s use of its certificates before an Article III court. See
47 U.S.C. § 214(c). But the FCC has not sought such relief
yet and instead revoked CUA’s certificates through sua
sponte in-house proceedings without an application before
it. The FCC’s arrogation of power and ultra vires revocation
of those duly issued certificates should be set aside, and the
certificates reinstated.
II. CASELAW
While it is not necessary to inquire beyond § 214’s text,
the majority’s atextual analysis should require that it
confront binding caselaw that forecloses its interpretation.
Start with the Supreme Court’s analysis in United States
v. Seatrain Lines, Inc., which dispels any doubt as to the
invalidity of this dissent’s textual analysis set out above. 329
U.S. 424 (1947). Seatrain analyzed whether the Interstate
Commerce Commission (“ICC”) had the authority to revoke
a certificate granted to Seatrain to operate as a water
carrier. 16 Id. at 425–27. In Seatrain, a water carrier had been
issued a certificate to ferry goods along two pre-specified
routes for which it had applied. Id. at 426–27. Despite the
duly granted certificate, the ICC sua sponte reopened the
16
The Supreme Court has deemed the FCC’s § 214 telecommunications
certificates as materially similar to the certificates issued by the ICC that
were at issue in Seatrain. FCC v. Sanders Bros. Radio Station, 309 U.S.
470, 474 (1940). This factual similarity thus renders Seatrain a valid
comparator for our evaluation of the FCC’s authority over § 214
certificates.
82 CHINA UNICOM (AMERICAS) OPS. V. FCC
proceedings and cancelled the certificate it had previously
issued. Id. at 427. The Supreme Court recognized that the
reopening of the proceedings amounted to a revocation of
Seatrain’s certificate and held that the ICC was without
authority to make such a revocation. Citing statutory
language authorizing the ICC to revoke only motor carrier
licenses, the Supreme Court explained that “th[e] difference
between the statutory authority of the [ICC] to prescribe the
service of water carriers and of motor carriers” meant that
the judicial “decisions relating to the [ICC]’s power [] to
[revoke the licenses of] motor carriers” were inapposite. Id.
at 431–32. As a result, it held that absent an express
statutory grant of the authority to revoke water-carrier
licenses, the ICC “was without authority to revoke Seatrain’s
certificate.” Id. at 432–33.
The parallels between Seatrain and CUA’s petition for
review are clear. The FCC is authorized to issue similar
certificates to enable telecommunications carriers to operate
telecommunications lines (akin to the certificate authorizing
Seatrain to carry goods along specified water routes). The
FCC may also issue radio station licenses and is specifically
authorized to revoke such licenses in specified scenarios
(akin to the ICC’s motor carrier authority outlined in
Seatrain’s analysis of the ICC’s organic statute). Under
Seatrain, the lack of a similar grant of revocation authority
to the FCC with respect to telecommunications lines under
§ 214 when Congress authorized such revocation authority
over broadcast licenses compels the conclusion that the FCC
was without authority to strip CUA of its § 214 certificates.
The majority disputes the application of Seatrain to the
facts before us and instead embraces the FCC’s theory that
Seatrain is limited to a purported alternate holding. Per the
majority, the Supreme Court purportedly held that the
CHINA UNICOM (AMERICAS) OPS. V. FCC 83
revocation of Seatrain’s certificate was problematic because
the revocation amounted to the ICC’s attempt to limit what
services Seatrain provided even though the ICC lacked the
authority to “specify ‘the service to be rendered’” (i.e., the
ferrying of commodities versus the ferrying of equipment)
when delimiting the terms of a water carrier certificate. Maj.
Op. 37-40 (quoting Seatrain, 329 U.S. at 431). There are
two reasons why distinguishing Seatrain in this manner
lacks merit.
First, the purported alternate holding the majority adopts
is foreclosed by the language in Seatrain itself. Rather than
hold that the ICC could not limit water carrier services, the
Seatrain Court asserted only that whether such goods-related
limitations were permitted “[wa]s by no means free from
doubt” because the statute’s text did not state what
conditions the ICC could impose. 329 U.S. at 431. This is
hardly a Court holding that the ICC’s yet untaken actions
were impermissible only because the ICC’s constituent
statute did not permit it to limit the kind of water carrier
services provided. But more importantly, the Court
expressly held that “certificate[s issued by an agency], when
finally granted . . . [are] not subject to revocation in whole
or in part except as specifically authorized by Congress.” Id.
at 432–33 (emphasis added). Rather than rely on what the
Supreme Court might have implicitly held, I would simply
apply the unambiguous holding as stated by the Court.
Second, the Supreme Court’s subsequent application of
Seatrain to the dispute in CAB v. Delta forecloses the
majority’s mistaken understanding of Seatrain. 367 U.S. at
328–29, 333–34. As the Supreme Court explained in CAB
v. Delta, the Seatrain Court held that “supervising agencies
desiring to change existing certificates must follow the
procedures ‘specifically authorized’ by Congress and cannot
84 CHINA UNICOM (AMERICAS) OPS. V. FCC
rely on their own notions of implied powers in the enabling
act.” Id. at 334. 17 Thus, contrary to the majority’s
17
The majority quotes from a portion of a footnote in CAB v. Delta to
contend that the Supreme Court adopted its narrow—but mistaken—
reading of Seatrain. Maj. Op. 39. However, the full footnote makes
clear that the Supreme Court expressly rejected the majority’s
interpretation of Seatrain’s holding:
The potentially distinguishing feature about Seatrain is
that the Court’s holding may rest on an alternate
ground—viz.: that the [ICC] had no power to impose the
conditions it did in the first instance. However, Seatrain
cannot be distinguished on the grounds that the Court
said ‘the certificate, when finally granted, and the time
fixed for rehearing has passed, is not subject to revocation
in whole or in part except as specifically authorized . . . .’
The point is that, under the Water Carrier Act, the [ICC]
had express authority to entertain petitions for
reconsideration at any time. See 49 U.S.C. § 916(a).
Therefore, it is clear that the [ICC] in Seatrain could have
reached with impunity the result it wanted to reach by
following the procedures set out by Congress. The force
of the Seatrain decision is, then, that the commissions
and boards must follow scrupulously the statutory
procedures before they can alter existing operations
and that arguments to the effect that ‘this is just
another way of doing it’ will not prevail.
CAB v. Delta, 367 U.S. at 333 n.15 (emphasis added). And setting aside
the fact that the out-of-circuit case the majority cites contains ambiguous
language that implies that those courts may have misread the Supreme
Court’s own analysis of Seatrain, Maj. Op. 39, neither apply to the case
at hand. Unlike the dearth of sua sponte revocation authority granted to
the FCC under § 214, the case involved statutes that expressly authorized
the actions the agency had taken. Murphy Oil Corp. v. FERC, 589 F.2d
944, 947 (8th Cir. 1978) (holding that there was no “doubt . . .the
[Federal Energy Regulatory] Commission[’s] rate-making powers”
under the Natural Gas Act authorized it to determine the proper price for
natural gas sold by petitioner).
CHINA UNICOM (AMERICAS) OPS. V. FCC 85
characterization, the Supreme Court itself in CAB v. Delta
understood Seatrain to apply to a challenge like CUA’s
before us. The Court’s own analysis of Seatrain in CAB v.
Delta forecloses the FCC’s reliance on its own assertion of
some inherent administrative authority to revoke a certificate
when the plain terms of its enabling statute do not grant it
such power.
Simply, the majority’s explanation of Seatrain fails to
support its atextual analysis. 18 Under Seatrain, the FCC was
without authority to revoke CUA’s § 214 certificates. Its
ultra vires order attempting to do so cannot stand. CUA’s
petition for review ought to be granted, and its unlawfully
revoked certificates reinstated.
18
The majority also cites the D.C. Circuit’s recent decision in China
Telecom (Americas) Corp. v. FCC, 57 F.4th 256 (D.C. Cir. 2022), as
further support for its mistaken interpretation of § 214. Maj. Op. 49-50.
While the D.C. Circuit in China Telecom summarized the FCC’s
assertion of its own revocation authority, it was tasked with evaluating
only two quite different questions: whether substantial evidence
supported the reasoning behind the FCC’s decision to revoke China
Telecom’s certificates and whether due process required more
procedures than were afforded to China Telecom before the agency. 57
F.4th at 256, 261, 265, 268. Whether the FCC had authority to revoke
the certificates at all was not a litigated issue. This limited review of the
agency decision in China Telecom evinces the D.C. Circuit’s adherence
to the rule of party presentation (deciding only the issues the parties
present) and therefore says nothing about how our sister circuit would
rule were it presented with a challenge to the FCC’s authority to sua
sponte revoke § 214 certificates, akin to what CUA raises here. See
generally United States v. Sineneng-Smith, 590 U.S. 371 (2020). Thus,
it is not clear that we can deem China Telecom as persuasive authority
because the D.C. Circuit simply did not analyze the text of § 214 as to
the issue whether the FCC has the authority sua sponte to revoke § 214
certificates solely through agency action.
86 CHINA UNICOM (AMERICAS) OPS. V. FCC
III. “REASONABLENESS” AND POLICY
It is not difficult to see why one might be misled into
agreeing with the majority’s atextual interpretation of § 214.
The FCC’s decision to revoke CUA’s § 214 certificates
appears motivated by quite serious national security
concerns. I do not doubt that the policymakers in
Washington sincerely believe that CUA’s continued
operation on American telecommunications networks is a
great threat to our nation’s national security. I respect that
determination. I defer, as I must, to the Executive’s
assessments of such matters of national security. See
Twitter, Inc. v. Garland, 61 F.4th 686, 698–99 (9th Cir.
2023). In fact, if asked for my opinion, I would be inclined
to agree with the Executive Branch’s views regarding the
risks posed by the Chinese Communist Party’s ability to
operate American telecommunications networks. But I am
not asked to opine on that issue; I am required to apply the
text of the Act. As the Supreme Court recently reaffirmed,
we do not adopt an interpretation just because the
“interpretation . . . does more to advance a statute’s putative
goal.” Perez v. Sturgis Pub. Schs., 598 U.S. 142, 150 (2023).
“No law ‘pursues its purposes at all costs.’” Id. (cleaned up)
(quoting Henson v. Santander Consumer USA Inc., 582 U.S.
79, 89 (2017)). The majority’s implicit reliance on the
FCC’s national security concerns to justify its atextual
interpretation of the Act is misplaced: it concludes § 214
contains an implied grant of sua sponte revocation authority
solely through agency action even though the plain text of
§ 214 makes clear that Congress omitted to give the FCC
that power. Congress can authorize the FCC’s sua sponte
revocation of CUA’s certificates if it wishes. The courts of
the United States are open to claims to enjoin and prohibit
the use of such certificates. Without that case or controversy
CHINA UNICOM (AMERICAS) OPS. V. FCC 87
before us, we judges, however, cannot authorize the FCC’s
revocation of CUA’s certificates.
The majority also questions this interpretation of § 214
because its practical impact would be shocking.
Surprising—let alone seemingly unreasonable—results do
not permit us to rewrite the statute for Congress. As the
Supreme Court has cautioned, courts “do[] not revise
legislation . . . just because the text as written creates an
apparent anomaly” that makes “not a whit of sense.”
Michigan v. Bay Mills Indian Comm., 572 U.S. 782, 794
(2014) (quoting CSX Transp. Inc. v. Ala. Dep’t of Revenue,
562 U.S. 277, 295–96 (2011)). We are in the business of
applying the words of a statute. As the Supreme Court
recently reiterated, our judicial oath does not permit us to
“replace the actual text with speculation as to Congress’
intent,” nor to speculate whether Congress made a rational
policy choice when it enacted a particular statute. 19 Perez,
598 U.S. at 150 (quoting Henson, 582 U.S. at 89).
For this reason, the majority’s reliance on its own notion
of the reasonableness of its interpretation does not resolve
19
It may well be that the Executive Branch has other powers under other
national security statutes that enable it to revoke CUA’s certificates.
CUA’s counsel hinted at other mechanisms that the FCC (as well as the
federal government writ large) could employ to effectuate its policy
goals and to protect against foreign influence over our
telecommunications networks. Those mechanisms include FCC cease
and desist orders or the President’s powers under the International
Emergency Economic Powers Act. While the FCC’s attorney contended
that those mechanisms are not as effective as sua sponte revocation, that
argument is a policy-based consideration the attorney should direct to
Congress, or perhaps the Executive, but not to the courts. Whatever
those other powers may be, they are not before us. What is before us is
solely the FCC’s claim of authority it was not granted by statute. On that
basis, the FCC’s actions cannot stand.
88 CHINA UNICOM (AMERICAS) OPS. V. FCC
this case. 20 Maj. Op. 32. An inquiry into the reasonableness
of one’s interpretation of the statute is ineluctably dependent
on policy considerations. One can construct a ‘reasonable’
policy argument to explain why Congress may choose to
give the FCC sua sponte revocation authority solely by
agency action in light of its statutory mandate. One can
conceive of a ‘reasonable’ policy argument to justify
requiring the FCC to consider national security issues when
it revokes a certificate—should Congress eventually
authorize the FCC to terminate a telecommunications
company’s operations sua sponte by its own agency action.
One can even foresee that there is a ‘reasonable’ policy
argument for why the FCC needs revocation authority to
curtail the Chinese Communist Party’s influence over
American telecommunications networks.
But the reasonableness of a policy Congress could have
implemented is not relevant to our legal analysis. Whatever
reason—if any—Congress had for setting up the
certification system upon application by private
telecommunications companies is simply not a part of this
court’s inquiry. As the Supreme Court has repeatedly
“explained, ‘even the most formidable policy arguments
cannot overcome a clear’ textual directive.” Helix Energy
Sols. Grp., Inc. v. Hewitt, 598 U.S. 39, 59 (2023) (quoting
BP P.L.C. v. Mayor & City Council of Balt., 141 S. Ct. 1532,
1541–42 (2021)). This rule has its roots in decisions almost
as old as the Supreme Court itself. As Chief Justice
Ellsworth succinctly stated when he rejected a petitioner’s
argument that policy counseled against finding that a prize’s
20
As explained above, see supra Section I.A, it is not reasonable to
presume, as the majority does, that in all cases, what one gives, one can
take away.
CHINA UNICOM (AMERICAS) OPS. V. FCC 89
capture was lawful, “[s]uggestions of policy and
conveniency cannot be considered in the judicial
determination of a question of right.” Moodie v. The Ship
Phoebe Anne, 3 U.S. (3 Dall.) 319, 319 (1796).
The same is true here. When we apply the tools of
statutory construction, the text of § 214 is clear: the FCC
lacks sua sponte revocation authority exercised solely by
FCC agency action. This conclusion is supported by the
applicable administrative caselaw. CUA was dispossessed
of its duly granted § 214 certificates under an order that
lacked proper authorization. 21
21
Because § 214 contains no revocation authority, I do not reach the
question of whether the FCC’s revocation of CUA’s certificates was
arbitrary or capricious. The FCC lacked the authority to take the action
that it did, which means CUA is entitled to have its § 214 certificates
reinstated.
But one observation is in order. Because the FCC lacks such revocation
authority, it necessarily follows that Congress did not provide any
standards in the text of the Act for assessing whether the FCC’s
revocation of a § 214 certificate satisfies or fails arbitrary and capricious
review. The lack of a textual standard is clear from the fact that at oral
argument, the FCC could not provide any concrete metrics or standards
for the majority to employ in its arbitrary and capricious analysis. Oral
Arg. 24:30–27:04, 28:00–29:20. The FCC argued only that courts
should review whether the FCC’s actions were in the “public interest.”
Oral Arg. 24:33–:40, 31:40–32:07. But this is too malleable a standard
to check agency overreach: what is in the public’s interest is necessarily
in the eye of the beholder. Besides, § 214 prescribes different standards
for the grant of certificates—“public convenience and necessity.” 47
U.S.C. § 214(a). As a result, the majority cannot identify the textual
basis for the test it adopts today. I admit that its arbitrary and capricious
analysis seems reasonable, if not unassailable. But because the majority
authorizes the FCC to exercise revocation authority it was not granted by
statute, I simply note that ex falso sequitur quodlibet—from falsehood,
anything follows.
90 CHINA UNICOM (AMERICAS) OPS. V. FCC
***
For all these reasons, the FCC’s actions were unlawful.
Until Congress decides to give the FCC sua sponte
revocation authority solely by its own agency action over
§ 214 certificates, CUA has a right to provide
telecommunications services pursuant to its duly issued
§ 214 certificates. Therefore, rather than deny CUA’s
petition for review as the majority does today, I would grant
the petition, vacate the FCC’s ultra vires order, and remand
with instructions for the FCC to reinstate CUA’s § 214
certificates. Judges must apply the plain terms of the statute
as they are written—leaving to the other branches all other
policy considerations.
I respectfully dissent.
Plain English Summary
FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT CHINA UNICOM (AMERICAS) No.
Key Points
01FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT CHINA UNICOM (AMERICAS) No.
02FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents.
03On Petition for Review of an Order of the Federal Communications Commission Argued and Submitted February 15, 2023 Honolulu, Hawaii Filed December 24, 2024 Before: Carlos T.
04Opinion by Judge Collins; Dissent by Judge Bea 2 CHINA UNICOM (AMERICAS) OPS.
Frequently Asked Questions
FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT CHINA UNICOM (AMERICAS) No.
FlawCheck shows no negative treatment for China Unicom (Americas) Opera v. FCC in the current circuit citation data.
This case was decided on December 24, 2024.
Use the citation No. 10304069 and verify it against the official reporter before filing.