[00:00:01] Speaker 01: Mr. Wright for the petitioner, Big Vision USA, Inc. [00:00:10] Speaker 01: Mr. Bell for the petitioner, Dowell Technology, USA, Inc. [00:00:17] Speaker 01: Mr. Dunn for the respondent. [00:00:19] Speaker 01: Mr. Johnson for the interviewer. [00:00:39] Speaker 04: Good morning. [00:00:40] Speaker 08: May I please escort Christopher Wright, representing Petitioners, which manufacture video surveillance equipment. [00:00:49] Speaker 08: As I will explain, Congress carefully limited the covered list to equipment that is both essential to the provision of broadband service and has certain dangerous capabilities, and video surveillance equipment does not belong on the list. [00:01:08] Speaker 08: Mr. Blau will address the critical infrastructure. [00:01:11] Speaker 03: If I can ask you about this. [00:01:13] Speaker 03: According to Congress, video surveillance equipment manufactured by Hickvision and Dahua is covered equipment that's a potential threat to national security. [00:01:24] Speaker 03: That's what Congress said. [00:01:26] Speaker 03: And then the FCC placed that equipment on the covered list because it's a potential threat to national security and subjected it to certain restrictions. [00:01:35] Speaker 03: Federal subsidies can't be used. [00:01:38] Speaker 03: to purchase it. [00:01:39] Speaker 03: The FCC then decided to expand the restrictions on the covered equipment that is a potential threat to national security, and the commission said that it would not provide authorizations for that equipment. [00:01:52] Speaker 03: Congress then weighed in and said the FCC may not allow equipment authorizations for equipment that, again, is a threat to national security that is, quote, on the list of covered communications or services published by the commission, unquote. [00:02:07] Speaker 03: You want us to interpret all of that to mean that Congress intended to ban equipment authorizations for only a sliver of the equipment that Congress thinks is a potential threat to national security. [00:02:19] Speaker 03: Only the sliver that's essential to broadband capability. [00:02:24] Speaker 03: And though Congress said that the equipment ban should apply to equipment, quote, on the list published by the commission, unquote, you want us to hold the opposite. [00:02:35] Speaker 03: that it actually meant to allow equipment authorizations. [00:02:38] Speaker 03: For most of the equipment that is on the list published by the commission. [00:02:43] Speaker 08: So if I may, let me note that it's far more than a sliver that would be covered under our view. [00:02:49] Speaker 08: But let's look at the statute. [00:02:51] Speaker 08: So I'm looking at the statutory addendum that petitioners filed. [00:02:57] Speaker 08: I'm looking at [00:02:59] Speaker 08: page 55 of that statutory addendum. [00:03:02] Speaker 05: It might be because some of us have our own versions of the statute. [00:03:04] Speaker 05: Could you just tell us which statutes? [00:03:06] Speaker 08: So I'm looking at section 2C, which contains... Of which statute? [00:03:13] Speaker 08: Pardon? [00:03:14] Speaker 05: Which statute? [00:03:16] Speaker 05: The SEA? [00:03:17] Speaker 05: Which statute are you looking at? [00:03:19] Speaker 08: The Secure and Trusted Communications Network. [00:03:24] Speaker 08: I'm sorry, there's so many statutes involved in this. [00:03:27] Speaker 05: Yeah, no, that's why I wasn't sure. [00:03:29] Speaker 08: What page of the addendum is that on? [00:03:30] Speaker 08: 55. [00:03:32] Speaker 08: And it's subsection C, which contains the cross-reference that Judge Pan was talking about. [00:03:41] Speaker 08: And this makes clear that there's very limited purpose for this cross-reference. [00:03:48] Speaker 05: Sorry, you're going to have to back up again. [00:03:49] Speaker 05: Are you talking about the Secure Equipment Act of 2021? [00:03:52] Speaker 08: No, I'm sorry. [00:03:54] Speaker 08: The Secure Networks Act. [00:03:55] Speaker 03: The Secure Networks Act. [00:03:57] Speaker 03: You're talking about 1601, subsection C, reliance on certain determinations. [00:04:01] Speaker 08: That's right, Your Honor. [00:04:02] Speaker 08: So the parties have largely referred to 1601 as Section 2, and that's how it's listed in the statutory addendum. [00:04:11] Speaker 08: So, but in any event, it says in taking action under subsection B1, the commission shall place on the list four different things. [00:04:26] Speaker 08: And the third one is the cross-reference to 889 F3 that I believe does not have the consequences you're suggesting. [00:04:37] Speaker 08: But so the first line again is taking action under subsection B1. [00:04:43] Speaker 08: On the prior page, section B1 is listed. [00:04:49] Speaker 08: And it follows the threshold requirement that only covered communications, which is a defined. [00:04:55] Speaker 03: I understand that you're drawing a distinction between communications and telecommunications equipment. [00:05:01] Speaker 03: But since you're talking about subsection C, [00:05:04] Speaker 03: Subsection C has four different purposes or means by which we can make a determination. [00:05:13] Speaker 03: And it seems that it's referencing Federal Acquisition Security Council findings, as well as Department of Commerce findings pursuant to an executive order. [00:05:26] Speaker 03: And those provisions talk in very broad terms about [00:05:32] Speaker 03: the types of issues they're addressing. [00:05:34] Speaker 03: For the Department of Commerce Executive Order Number 13873, it talks about vulnerabilities in information and communications technology and services, malicious cyber enabled actions, and economic and industrial espionage against the United States and its people. [00:05:50] Speaker 03: And it encompasses any hardware, software, or other product or service primarily intended to fulfill or enable [00:05:57] Speaker 03: the function or information of data processing, storage, retrieval, or communication by electronic means. [00:06:04] Speaker 03: The Federal Acquisition Security Council targets security threats to covered articles in the supply chain, and its mandate includes information technology, including cloud computing, services of all types, telecommunications equipment and services, related hardware, software systems, and devices. [00:06:23] Speaker 03: And Congress cross-referenced these security threats [00:06:26] Speaker 03: and instructed the FCC to place these entities on the list based solely on these determinations. [00:06:32] Speaker 03: These determinations are broad, but you're saying that Congress intended only to address the sliver that deals with broadband. [00:06:44] Speaker 08: Yes, your honor. [00:06:45] Speaker 08: So let's go back to the statute again. [00:06:47] Speaker 03: I just quoted to you from the statute and the references. [00:06:51] Speaker 03: It's cross-referencing. [00:06:52] Speaker 03: How do you explain the references to the federal acquisition? [00:06:55] Speaker 03: If I may ask the question, how do you explain the cross-references to the Federal Acquisition Security Council and the Department of Commerce? [00:07:02] Speaker 03: And how is that consistent with your definition that communications equipment can only relate to broadband services? [00:07:09] Speaker 08: because that's what the secure network act says. [00:07:13] Speaker 08: And it has three requirements. [00:07:15] Speaker 08: And the first is the threshold requirement of communications equipment. [00:07:19] Speaker 08: The second is the B1 determination by one of those four entities listed in subsection C. And [00:07:30] Speaker 08: And a third requirement, it has to be, the equipment has to be capable of certain, has dangerous capabilities that the FCC... But doesn't that list seem to contradict your view of what communications equipment is? [00:07:45] Speaker 03: You're interpreting it as a very narrow thing and what they're cross-referencing are very broad things. [00:07:50] Speaker 08: So let's remember that what Congress was doing when it adopted the Secure Network Act was deciding what it would pay for under the Rip and Replace program that's the bulk of that Act, Section 4. [00:08:06] Speaker 08: And Congress wasn't [00:08:09] Speaker 08: saying that it was paying to rip and replace everything. [00:08:13] Speaker 08: It certainly wasn't saying that it was going to pay for rip and replacing all the things that are in C, because it has two separate requirements. [00:08:24] Speaker 03: But the reason these entities were subject to the rip and replace requirement is because there was a finding by Congress that they were a threat to national security. [00:08:34] Speaker 03: Correct? [00:08:34] Speaker 08: that satisfies B-1, the entity, the focus on B-1 is about the entities providing the service or the equipment. [00:08:45] Speaker 03: The focus in B-2 is the capabilities of the equipment and of course the... Do you dispute that Congress has made findings that this equipment is a threat to national security or potentially so? [00:09:01] Speaker 03: What about the 2019 NDAA section 89 F3? [00:09:06] Speaker 08: So Congress decided in the NDAA that it wouldn't allow federal agencies to buy equipment. [00:09:18] Speaker 03: I understand all that. [00:09:18] Speaker 03: I'm just saying the reason these companies were subject to it was because there was a finding that they're a threat to national security, correct? [00:09:28] Speaker 08: a threat, but let me say that even in the NDAA, Congress did not prohibit federal agencies from buying... No, I understand the effects of it. [00:09:40] Speaker 03: I'm just dealing with the categorization of a threat to national security. [00:09:44] Speaker 03: And I guess my question is, why do you read the SEA, the most recent act, to only address a sliver of what they think is a threat to national security? [00:09:55] Speaker 08: because in the Secure Networks Act, Congress said it was only covering equipment that was essential to the provision of broadband and had the dangerous capabilities listed in Section 2B, as well as meeting the requirement of 2B1. [00:10:15] Speaker 03: So... You know, there's also a definition in Section 16085, this is 47 USC, Section 16085, that covered communications equipment or service [00:10:24] Speaker 03: means any communications, equipment, or service that's on the list published by the commission. [00:10:31] Speaker 03: Your client's equipment is on the list. [00:10:35] Speaker 08: It shouldn't be on the list, Your Honor. [00:10:37] Speaker 03: That's a different question. [00:10:38] Speaker 03: It is on the list. [00:10:40] Speaker 03: And 16.085 says if it's on the list, it's covered equipment or service. [00:10:46] Speaker 08: Your Honor, but that follows 4, which says that it has to be equipment essential to the provision of broadband service. [00:10:52] Speaker 03: There are a lot of different definitions here, but it just seems to me, if we take a step back and see what Congress was trying to say, is that they were saying, as clearly as Congress ever does, that they think that your clients should not get equipment authorizations. [00:11:10] Speaker 08: I think Congress said as clearly as it could. [00:11:12] Speaker 08: But remember, this is a statute that doesn't have to do with equipment authorization. [00:11:17] Speaker 03: No, I'm talking about the Secured Equipment Act, which does deal with equipment authorizations. [00:11:23] Speaker 03: Well, we were looking at 9-5, but in any event, I think Congress... If we can just look at the Secured Equipment Act together just for a moment, it says there will be rules subject to a specific notice of proposed rulemaking, which involved expanding the consequences for being on the covered list. [00:11:44] Speaker 03: And it says in the rules that will be adopted, the commission shall clarify [00:11:48] Speaker 03: that the commission will no longer review or approve any application for equipment authorization or equipment. [00:11:53] Speaker 03: So we'll have no equipment authorizations. [00:11:56] Speaker 03: For equipment, quote, that is on the list of covered communications equipment or services published by the commission. [00:12:04] Speaker 03: Your client's equipment is on the list. [00:12:07] Speaker 08: So your honor, that's the ratification argument. [00:12:10] Speaker 08: If I could make one more comment. [00:12:12] Speaker 03: It doesn't say properly on the list. [00:12:13] Speaker 03: It just says anything on the list. [00:12:14] Speaker 08: Well, your honor, the Secure Equipment Act, it changed the consequences of being on the act and did so rather dramatically. [00:12:24] Speaker 08: But Congress didn't say anything that's on the act improperly. [00:12:31] Speaker 08: And Congress also in the Secure Network Act said that, [00:12:35] Speaker 08: You know, things will come on and off the list. [00:12:39] Speaker 03: Things will come on and off the list, but it's saying at the time that they enacted this rule, the equipment that is on the list published by the commission, there will be no equipment authorization for that equipment. [00:12:52] Speaker 03: That's what this says. [00:12:53] Speaker 08: Well, Your Honor, our position is if this court decides that the equipment at issue is improperly on the list. [00:13:00] Speaker 03: But how does... FCC should take it off. [00:13:02] Speaker 03: If you could just tell me textually what allows us to look behind what's on the list. [00:13:06] Speaker 03: This is just on the list published by the commission. [00:13:09] Speaker 03: It doesn't say properly on the list. [00:13:10] Speaker 03: It doesn't say correctly put on the list. [00:13:14] Speaker 03: How are we allowed to do that based on the statutory language? [00:13:17] Speaker 08: I think this court has the authority to review what the FCC order at issue, and the FCC order at issue decided that... But the FCC order has to comply with the statute. [00:13:31] Speaker 08: And the statute says that the commission is supposed has to decide three things. [00:13:36] Speaker 08: And I think this is a statute that's very clear. [00:13:37] Speaker 03: I'm looking at the LCA, the Security Equipment Act. [00:13:43] Speaker 03: The regulation that you're challenging was issued to implement the Security Equipment Act. [00:13:48] Speaker 03: And the Security Equipment Act says, if it's on the list, no equipment authorizations. [00:13:53] Speaker 08: Well, Your Honor, that would also then mean that Congress is willing to pay to rip and replace this equipment because it's the same list. [00:14:04] Speaker 03: Okay, that's a consequence of it, but the words of the statute are the words of the statute. [00:14:09] Speaker 05: Well, the words of the SNA make very clear that... And the SEA says published by the Commission under the secure networks. [00:14:20] Speaker 05: Act doesn't just say published on the list. [00:14:23] Speaker 05: So I take it your argument is it has to be published under Section 2A of the Secure Networks Act. [00:14:33] Speaker 05: And I assume your argument is that brings in the obligation that the list be in compliance with the Secure Networks Act. [00:14:42] Speaker 05: Is that right? [00:14:44] Speaker 05: It's the list that is compliant with the Secure Networks Act. [00:14:49] Speaker 05: That's your reading. [00:14:50] Speaker 05: And your reading is that your placement on the list is not consistent. [00:14:52] Speaker 08: And again, the commission has the duty to review and revise that list, add to it, and subtract from it. [00:14:59] Speaker 08: And if this court says that video surveillance equipment didn't belong on the list, then it should take it home. [00:15:06] Speaker 05: Well, I'm making a narrower point, is that the Secure Equipment Act didn't just say equipment that's on the list. [00:15:14] Speaker 05: It says equipment that is on the list of covered communications equipment under the network, what I call the Secure Network Act. [00:15:23] Speaker 05: And your argument is, that's fine. [00:15:27] Speaker 05: But we're not on a list of covered communications equipment under the SNA as a matter of law. [00:15:35] Speaker 05: We're not there lawfully on that list. [00:15:37] Speaker 05: I take it that's your argument, because we are not in fact. [00:15:40] Speaker 05: to be covering communications equipment, you first got to be communications equipment. [00:15:46] Speaker 08: So if this court holds that video surveillance equipment should not have been on the list, the commission will take it off and then video surveillance equipment can obtain certification, until and unless Congress rules differently. [00:15:59] Speaker 05: Can you tell me, because there is the express reference to section 889 F3 of the 2019 NDAA. [00:16:07] Speaker 05: What in 889 F3 would qualify under your view as communications equipment? [00:16:16] Speaker 05: You would say nothing in subsection B. I take it. [00:16:23] Speaker 08: So telecommunications equipment produced by Huawei and ZTE and services provided by those companies. [00:16:32] Speaker 05: I just want to talk about equipment, not the services language. [00:16:35] Speaker 05: So just focus on equipment and not the services language. [00:16:38] Speaker 05: So what equipment in 89 F3 would qualify? [00:16:42] Speaker 08: So equipment that's essential to the provision of broadband. [00:16:45] Speaker 05: Right. [00:16:45] Speaker 05: What in 889 F3 can you tell me? [00:16:47] Speaker 05: Are you saying that Huawei's telecommunications equipment would satisfy, does qualify as covered equipment? [00:16:54] Speaker 08: Yeah, and just to get a little more granular, it might be useful. [00:16:58] Speaker 08: I mean, so this equipment is the equipment that internet service providers need to use to provide broadband service. [00:17:09] Speaker 05: What is this equipment? [00:17:11] Speaker 08: And that's what Huawei and ZTE mostly provide, the routers, the gateways, fiber, all of the stuff in the network. [00:17:21] Speaker 05: essential broadband equipment? [00:17:26] Speaker 08: If they're in the network, there's a line between what internet server providers do, which is essential to the provision of broadband. [00:17:38] Speaker 08: And then there's what end users attach to the network. [00:17:42] Speaker 08: And, and that's [00:17:44] Speaker 08: That's not essential to the provision of broadband. [00:17:47] Speaker 08: You can provide broadband service without video surveillance equipment. [00:17:52] Speaker 08: No one disputes that. [00:17:53] Speaker 08: So it's not essential to the provision of broadband service. [00:17:57] Speaker 08: It doesn't make it through the threshold. [00:17:59] Speaker 08: But Huawei and ZTE equipment would. [00:18:03] Speaker 08: Excuse me? [00:18:06] Speaker 03: All of the telecommunications equipment by Huawei and ZTE. [00:18:10] Speaker 08: I don't know if they sell things other than [00:18:14] Speaker 08: Routers and gateways and all of this stuff that makes the network, but but there is any providers of that. [00:18:22] Speaker 05: Is there anything that big vision or da wa? [00:18:26] Speaker 05: Creates or produces and sells that would fall [00:18:32] Speaker 05: Qualified as qualified as communication equipment. [00:18:34] Speaker 08: No, they're video surveillance equipment providers. [00:18:37] Speaker 08: Now I would note that I'm sorry. [00:18:40] Speaker 05: They only do video surveillance equipment, right? [00:18:43] Speaker 05: And they do any switches or routers or wireless bridges or would those not count? [00:18:47] Speaker 08: Well, they don't right now, but of course they could have in the past, except if they did have in the past. [00:18:54] Speaker 08: No, but if they did, they wouldn't be able to, it would be covered, it would be on the covered list and they wouldn't be able to get it authorized. [00:19:05] Speaker 08: So it would have a, it would have an effect if they sold that kind of equipment. [00:19:11] Speaker 05: What if it's like a supplemental router in a security system that has a supplemental router and needs to buttress the router service provider? [00:19:20] Speaker 08: As a class, they wouldn't be able to sell that. [00:19:22] Speaker 08: Anything that's used, of course. [00:19:24] Speaker 05: Would that count as essential to broadband services? [00:19:27] Speaker 05: Yes. [00:19:28] Speaker 08: An Internet service provider is going to have lots and lots of routers and gateways and all sorts of fiber and things. [00:19:38] Speaker 08: And, you know, yeah, it's designed so that if one of them fails, probably something else will step in. [00:19:45] Speaker 08: But we agree that what Internet service providers buy from companies like Huawei and ZTE and the service they provide, that's what's covered. [00:19:56] Speaker 08: And that's what the findings of it. [00:19:59] Speaker 05: What if your clients, as part of installing their video surveillance and security system, installed sort of supplemental routers to strengthen whatever the signal is so that it can now support all the needs and demands of the surveillance system? [00:20:17] Speaker 08: So well, with respect to sort of the boundary issue, we did put in the record some of our comments that are designed to show the difference between where the [00:20:33] Speaker 08: Boundary of the network and and and the and customer premises equipment lies and remember that's the traditional distinction the FCC has since 1934 regulated networks telecommunications networks, but not CPE not customer premises equipment unless there's some specific reference so this is a this is a natural line to draw and and again [00:21:02] Speaker 08: Congress was interested in protecting networks and communications while they're on the network, and it wasn't interested in paying to rip and replace all of the equipment that, you know, customers and users attached to the network. [00:21:23] Speaker 08: This was a carefully limited statute with three requirements and two of them aren't met and all three requirements have to be met. [00:21:37] Speaker 05: How do we know? [00:21:38] Speaker 05: I think a difficult question in this case is what the Secure Equipment Act of 2021 was doing. [00:21:48] Speaker 05: It was certainly saying [00:21:51] Speaker 05: this will be the consequence for being on the list, right, barring authorizations. [00:21:56] Speaker 05: But how do we know that it wasn't also when it says, when it says barring authorization for equipment that quote is on the list, that it, and the list, the only equipment on the list, the only equipment on the list [00:22:19] Speaker 05: are the things listed in 889 F3. [00:22:22] Speaker 05: That's the only stuff that's on the list at the time. [00:22:24] Speaker 05: It's not like it's a 40 page list that Congress wouldn't have been aware of. [00:22:29] Speaker 05: It was, for equipment, it was the 889 F3 equipment. [00:22:34] Speaker 05: And so it seems, and I get your textual argument, it's just I'm struggling also with [00:22:39] Speaker 05: How do we assume Congress didn't know what the composition of the list was? [00:22:44] Speaker 08: Congress also didn't know what it said in 889F3, although the FCC didn't, in terms of relation to 889A2. [00:22:55] Speaker 08: That's the provision that says [00:22:59] Speaker 08: Nothing in this section covers equipment that cannot route or redirect user data traffic or permit visibility into any user data or packets. [00:23:14] Speaker 08: That's very parallel to the requirement in 2b2 of the Secure Networks Act. [00:23:21] Speaker 08: But what it means is [00:23:23] Speaker 08: that Congress wasn't even prohibiting federal agencies from buying video surveillance equipment. [00:23:30] Speaker 08: And that's clear if you look at the addendum to our reply brief. [00:23:34] Speaker 05: So are you saying, when Congress says in 889 F3, [00:23:43] Speaker 05: The video surveillance and telecommunications equipment produced by your clients and other companies. [00:23:52] Speaker 05: Count has covered telecommunications equipment. [00:23:54] Speaker 05: In fact, they don't because they don't satisfy 889A to B. [00:24:01] Speaker 08: Yes, your honor, and two points on that. [00:24:05] Speaker 08: First, that's made very clear by the, again, the addendum in our reply brief, which is GSA's interpretation of 889. [00:24:18] Speaker 08: And the commission just missed, or if it saw it, it failed to note that the A2 provision, [00:24:29] Speaker 08: And, but GSA makes quite clear in what gets called the decision tree that you first look to see if your federal agency and you want to buy video, you know, some sort of equipment. [00:24:41] Speaker 08: Is it mentioned in F3? [00:24:43] Speaker 08: And if it is, you then look at the A2, which I just read, and if the answer is no, it can't do these dangerous things, you can buy the equipment. [00:24:56] Speaker 08: And again, it was critical to the FCC's misunderstanding that it thought that Congress in the NDAA had said that anything that's listed in F3, federal agencies can't buy it. [00:25:14] Speaker 05: That is wrong. [00:25:15] Speaker 05: But the Secure Networks Act only references 889 F3 equipment and does not reference 889A. [00:25:23] Speaker 08: So it has the, it says that equipment should be on the list only if it meets the threshold. [00:25:32] Speaker 08: And then if and only if it satisfies the requirements in B1 and B2, 2B1 and 2B2. [00:25:43] Speaker 08: 2B1 has cross-reference, but 2B2 is very parallel to 889 2B, because if we turn back to the Secure Networks Act and look at section 2B2, which is on 54 of the statutory addendum, you see that it first has to be communications equipment. [00:26:11] Speaker 08: And then it's on the list, if and only if it meets B1 and meets B2. [00:26:19] Speaker 08: And B2 has this list of dangerous capabilities that, as I just said, are very parallel to those in 889. [00:26:27] Speaker 08: I think the text answers the question, but the court might also note that [00:26:38] Speaker 08: Again, Congress, in adopting the NDAA, was very focused on Huawei and ZTE, made detailed findings, and that's what this, it was an amendment. [00:26:52] Speaker 08: It was an amendment that added F3. [00:26:56] Speaker 08: And as we discussed in a footnote, the amendment wasn't the result of any careful study. [00:27:05] Speaker 05: It was... You can't write opinions saying that we think Congress was just kidding. [00:27:09] Speaker 05: Well, I'm just... Especially when it passes a later statute that references it. [00:27:13] Speaker 05: So... This year networks that expressly references it. [00:27:16] Speaker 08: So it references it, but Congress didn't... Congress... [00:27:23] Speaker 08: You know, it still doesn't pass the A2. [00:27:25] Speaker 08: So I'm just saying it's not surprising that there might be something on that list that federal agencies could buy. [00:27:35] Speaker 08: And perhaps that's out. [00:27:36] Speaker 08: Yeah, I don't know that I'd write that in the opinion, but you're kind of, the consequence of the cross-reference still has meaning. [00:27:48] Speaker 08: Anything that's in F3, [00:27:50] Speaker 08: As the decision tree shows, before an agency buys it, it has to consider whether it has these dangerous capabilities. [00:28:00] Speaker 05: So are agencies still capable of buying this? [00:28:04] Speaker 05: Yes. [00:28:04] Speaker 05: In your view? [00:28:05] Speaker 05: And have they been buying it? [00:28:06] Speaker 05: Has any agency been buying it since the 2019 NDAA? [00:28:08] Speaker 08: I don't know the answer to that question. [00:28:09] Speaker 08: The record doesn't say. [00:28:12] Speaker 05: I'm just trying to figure out if agency government behavior reflects what you're saying. [00:28:17] Speaker 05: If they read the statute the same, if the rest of the government reads the statute the same as you, I would think this would put them off. [00:28:23] Speaker 08: Yeah, I mean, you know, I will note that after, that the military's response was these gamblers don't present any national security threat. [00:28:33] Speaker 08: We don't even have them attached to the internet, which again, I mean, [00:28:38] Speaker 08: Not only is this equipment not essential to the provision of broadband, you can use it without even attaching it to the internet. [00:28:47] Speaker 04: Any other questions? [00:28:50] Speaker 04: We'll give you some time on rebuttal. [00:28:51] Speaker 04: Thank you. [00:28:54] Speaker 04: Are companies planning to do rebuttal or just one? [00:29:14] Speaker 09: May it please the court. [00:29:17] Speaker 09: The FCC adopted an unreasonable interpretation of the term critical infrastructure as used on the covered list designation of DAWA and HIC vision equipment. [00:29:28] Speaker 09: This interpretation flies in the face of the consistent use of this term by Congress in previous statutes and by other agencies throughout the government. [00:29:38] Speaker 09: It's so over broad that it creates effectively a presumption that everything in the entire economy [00:29:44] Speaker 09: is critical, and it's implausible on its face. [00:29:48] Speaker 05: If they had just adopted the definition of the Patriot Act without the additional connected to language, would you have any challenge? [00:29:56] Speaker 05: We would not be here arguing this point today, if that were the case. [00:30:05] Speaker 09: The FCC didn't stop there, though, as you know. [00:30:08] Speaker 09: It went on and cited the 16 sectors, one of which is commercial facilities, which of course encompasses a huge portion of the economy, and 55 functions, and said that anything connected to one of these sectors or functions could reasonably be considered critical infrastructure. [00:30:27] Speaker 09: That's unreasonably broad. [00:30:29] Speaker 09: Critical means indispensable or vital. [00:30:33] Speaker 09: And the Patriot Act definition incorporates that concept. [00:30:37] Speaker 09: And the Patriot Act definition has also been used in several other statutes, including another section of the 2019 NDAA, which is where Section 889 was adopted. [00:30:52] Speaker 09: The FCC got these 16 sectors from a presidential policy directive. [00:30:57] Speaker 09: While the Presidential Policy Directive defines the sectors, it never says that anything connected to one of these sectors is necessarily or even presumptively critical infrastructure. [00:31:08] Speaker 09: It designates a specific federal agency to oversee each sector and strengthen the security of critical infrastructure within that sector, something the FCC probably knows because they're one of the agencies that's designated in that directive. [00:31:25] Speaker 09: The FCC says that [00:31:27] Speaker 09: Our examples of laundromats and used car lots are far-fetched, but they don't say why. [00:31:33] Speaker 09: They certainly don't dispute that those are commercial facilities and therefore connected to one of the sectors designated in the policy directive. [00:31:44] Speaker 09: But they say that they couldn't reasonably be considered critical infrastructure. [00:31:49] Speaker 09: If they can't articulate why that is, then how is any party supposed to determine what critical infrastructure is or is not? [00:31:58] Speaker 09: The FCC and the intervener suggest, well, you can always go back and ask for clarification. [00:32:04] Speaker 09: And the clarification will be provided by the FCC staff who, of course, are bound to apply the order that the commission has adopted. [00:32:11] Speaker 09: So I think that's an illusory remedy. [00:32:21] Speaker 09: If the court has no other questions, I'll reserve the rest of my time. [00:32:24] Speaker 09: Thank you. [00:32:25] Speaker 04: Thank you very much. [00:32:27] Speaker 04: Good morning, Your Honors. [00:32:42] Speaker 02: I'm Matthew Dunn for the FCC in the United States. [00:32:46] Speaker 02: I would say this APA challenge is a little unusual because the agency is doing so specifically what Congress told it to do. [00:32:53] Speaker 02: Here we had an NPRM in which the agency proposed a course of action. [00:32:56] Speaker 02: As you know, that's refusing to further authorize equipment on its covered list. [00:33:01] Speaker 02: And then Congress passed a statute saying yes, referencing this NPRM by the docket number and saying yes, you should do exactly what you propose to do. [00:33:10] Speaker 05: Do you read the statute as not only prescribing consequences for being on the list, but as also ratifying the content of the list? [00:33:17] Speaker 02: We do read it that way. [00:33:18] Speaker 02: I think the first prong is sort of unassailable, but also I think there's strong evidence for the second yes. [00:33:23] Speaker 05: What's your best evidence that that's the reasoning? [00:33:25] Speaker 05: Because it does say the list published under Section 2A of the Secure Networks Act, which has lots of requirements that they say were not satisfied in this case. [00:33:36] Speaker 02: It does. [00:33:36] Speaker 02: I think so textually, you can read it as well as I can. [00:33:41] Speaker 02: But I think that the context speaks volumes here. [00:33:43] Speaker 02: So there's a kind of iterative back and forth between Congress and the FCC. [00:33:48] Speaker 05: Congress was the one that first named these companies in the 2019 NDAA, and then- It's telecommunications equipment, but then it's the same Congress that chose for the Secure Networks Act to use a different phrase, specifically defined, to require that you be essential to, for shorthand purposes, broadband services. [00:34:08] Speaker 05: So Congress chose a very narrow definition there, which did not map onto [00:34:14] Speaker 05: the 2019 NDAA language, and so I'm trying to figure out what the iterative process is here. [00:34:23] Speaker 02: I would like to get to that, but just to finish answering your question about the meaning of the Secure Equipment Act, I think it would be a strange course of action for Congress [00:34:32] Speaker 02: to think that the FCC had gotten it wrong, that the covered list had things it shouldn't have on it, and then just sort of woodenly say, follow your course of action, without speaking to what, as you point out, there are only a couple of entities on the covered list. [00:34:44] Speaker 02: So if the FCC had gotten that wrong, I think that the Secure Equipment Act would be a very strange statute indeed. [00:34:49] Speaker 02: So even if the text doesn't say, and specifically DAWA should be on there in HICVision, I think that that's by far the more reasonable interpretation of what the FCC was supposed to do. [00:34:59] Speaker 05: And what would happen going forward? [00:35:01] Speaker 05: So you read it as not just ratifying, do you read it as ratifying just the content of the list or both the content of the list and the FCC's interpretation of the definition of communication equipment to include not what the statute says essential to broadband services but [00:35:20] Speaker 05: used in or used with broadband services. [00:35:24] Speaker 05: Do you think that was ratified too, that definition? [00:35:27] Speaker 02: I think that's the better reading, but of course we don't, either of those possibilities offered by you would take care of this case. [00:35:35] Speaker 05: No, I'm not sure it would because so it's two years from now and another company, brand new, nowhere on the list, comes along and the FCC says, aha, your product is used with [00:35:50] Speaker 05: broadband services. [00:35:51] Speaker 05: It's not essential to it, but it's used with it. [00:35:57] Speaker 05: And they challenge it, and they go, what part of essential can't you understand? [00:36:03] Speaker 05: That's what Congress said, plain language, that's what they meant, all our usual rules of statutory interpretation, we read it, we gotta apply it, and then your client comes along and says, oh no, [00:36:18] Speaker 05: Congress in this act here, which made no reference to our definition of covered equipment, in fact referred us back to the statutory definition of covered equipment. [00:36:29] Speaker 05: Congress signed off on essential being scratched out of the US code and what we pencil in is stuff used with. [00:36:40] Speaker 02: So, again, I do want to hit... Is that what we would have to do? [00:36:43] Speaker 02: No. [00:36:44] Speaker 05: Then it didn't ratify your interpretation. [00:36:46] Speaker 05: It only ratified your list. [00:36:47] Speaker 02: Well, okay. [00:36:48] Speaker 02: So the Secure Equipment Act... So I have several responses because it's a little bit of a long question. [00:36:53] Speaker 02: The Secure Equipment Act does... It's true it lists the Secure Networks Act, but what it says is, do not... I'm reading now from the Secure Equipment Act section to the sort of... To A2. [00:37:06] Speaker 02: Commissions will clarify the commission will no longer approve or... [00:37:09] Speaker 02: application for equipment authorization for equipment that is on the covered list. [00:37:14] Speaker 02: So the list of cover communications equipment published by the commission under this section to now I think that the work of under section two is just clarifying what list we're talking about. [00:37:24] Speaker 02: As Judge Pan pointed out it. [00:37:26] Speaker 02: It does instead of saying [00:37:28] Speaker 02: equipment which is properly interpreted as or covered equipment or something of that nature. [00:37:33] Speaker 02: It just says, on the list, what list are we talking about? [00:37:35] Speaker 02: We're talking about the list published pursuant to the Secure Networks Act. [00:37:38] Speaker 02: I think that's a fair reading of the statute. [00:37:42] Speaker 02: You asked about what happens in the future if somebody else makes video surveillance equipment. [00:37:47] Speaker 05: Not video surveillance equipment. [00:37:48] Speaker 05: I'm not telling you what it is, but I'm telling you it's something that does not, it is not remotely essential to the revision of broadband services. [00:37:54] Speaker 05: It is simply something that you plug into your computer. [00:37:58] Speaker 02: Okay, so it wouldn't be on the covered list unless it met all of the prongs of the covered list. [00:38:03] Speaker 05: So I think a reasonable reading of the... Which prongs still apply after your reading of the SEA? [00:38:09] Speaker 05: Does it still have to fall within the statutory definition of covered equipment? [00:38:15] Speaker 02: Yes, it must, but we find that this does. [00:38:17] Speaker 05: Wait, wait, wait. [00:38:19] Speaker 05: I really got to understand this. [00:38:20] Speaker 05: Absolutely. [00:38:24] Speaker 05: They say the statutory definition is, and I think you can't dispute this, the statutory definition textually is essential to broadband services. [00:38:33] Speaker 05: Correct? [00:38:34] Speaker 02: It doesn't say essential to broadband services. [00:38:37] Speaker 02: It says essential to advanced communication. [00:38:39] Speaker 05: Which is then defined as provision of broadband services and blah, blah, blah. [00:38:43] Speaker 02: But the blah, blah, blah is important. [00:38:45] Speaker 02: Okay. [00:38:45] Speaker 05: Yeah. [00:38:45] Speaker 05: Okay. [00:38:45] Speaker 05: Tell me how that is. [00:38:46] Speaker 05: That's really helpful. [00:38:48] Speaker 02: Okay. [00:38:48] Speaker 05: So I'm now going to look at- It's now essential to advanced communication services, which are high-speed switched broadband telecommunications capability. [00:38:58] Speaker 05: High-speed switched broadband telecommun- I wasn't leaving. [00:39:01] Speaker 05: I omitted the adjectives for time's sake, but I'll put them back in. [00:39:03] Speaker 05: So now they say we are not remotely essential to the provision of high-speed switch broadband telecommunications capability. [00:39:11] Speaker 02: Right, that is capability that enables users to originate and receive a number of things, including video telecommunications. [00:39:16] Speaker 05: It's a capability that enables, it creates this enable, yes, it creates this power. [00:39:20] Speaker 05: But it's not the things that use that power, this is the stuff that creates that power. [00:39:26] Speaker 05: Using power and creating power, right, the electrical company creates the electricity in my house, right, that enables me to plug my microwave in. [00:39:39] Speaker 05: But that doesn't make my microwave [00:39:41] Speaker 05: a provider of electrical power, correct? [00:39:44] Speaker 02: That is correct. [00:39:45] Speaker 05: And microwave is not essential to the provision of electrical power just because I plug it into the outlet, correct? [00:39:51] Speaker 02: That is correct. [00:39:52] Speaker 05: Okay. [00:39:53] Speaker 05: So they have equipment that they say we just sort of plug it in to whatever broadband service you have, whatever internet service you have. [00:40:02] Speaker 05: Right. [00:40:03] Speaker 05: And how is that essential to the provision? [00:40:07] Speaker 02: So one form of advanced communications is video telecommunications. [00:40:13] Speaker 05: On this definition? [00:40:15] Speaker 02: Sure, yes. [00:40:17] Speaker 02: How? [00:40:18] Speaker 02: It's impossible to have video telecommunications without a video camera. [00:40:23] Speaker 02: It's possible to have lots of other kind of advanced telecommunications, but one form of that is a video camera. [00:40:28] Speaker 02: It is at a minimum reasonable to interpret the statute to include devices which make that. [00:40:33] Speaker 07: It's not entirely clear. [00:40:37] Speaker 07: I don't have it in front of me, but the way it's stated is [00:40:40] Speaker 07: is the broadband, et cetera, that's capable of doing X and they're capable of your melding into the general definition. [00:40:54] Speaker 07: Right. [00:40:56] Speaker 02: I think that that's, I think it's true that this is subject to a number of different readings. [00:41:02] Speaker 02: But I guess what I would say is backing up a step. [00:41:04] Speaker 02: Congress has something in mind in the eight, in the John. [00:41:09] Speaker 05: Are you saying that everything? [00:41:11] Speaker 02: Have you finished that answer? [00:41:12] Speaker 02: Yeah. [00:41:12] Speaker 02: Okay. [00:41:13] Speaker 02: So Congress had something in mind. [00:41:15] Speaker 02: It was targeting some kinds of technology in the Secure Networks Act, which in turn cross references the 2019 NDAA. [00:41:24] Speaker 02: So I think Congress was worried about these devices. [00:41:28] Speaker 02: Under petitioners' reading, it was worried about it maybe in the 2019 NDA, but the Secure Networks Act was supposed to have a narrower scope, and it meant to carve those out. [00:41:38] Speaker 02: But it's a subtle mechanism that they're proposing, and I think a more reasonable reading of the statute of the Secure Networks Act is that Congress [00:41:48] Speaker 02: was concerned about this, that's why it cross-referenced the previous statute. [00:41:52] Speaker 07: Just to follow up on that, and one of the things that troubled me about reading these briefs is I don't see any reference to any technical studies that indicate that any of this equipment that's at issue here has the capability of threatening the national security of the United States. [00:42:12] Speaker 07: And you said a number of times Congress was concerned, Congress was concerned. [00:42:17] Speaker 07: that these were Trojan horses. [00:42:22] Speaker 07: But has anybody taken any of this equipment apart and seen whether there are any kind of bugs in there that could be used for nefarious purposes? [00:42:37] Speaker 02: With the caveat that it wasn't necessary for the agency to reach that because it was relying on a determination of Congress, just sort of as a matter of general interest or judicial notice, I point you to, we have a couple of footnotes or a footnote with some newspaper articles which study petitioners' equipment in particular, Dahua and Hikevision, that these were subject to hacking, remote hacking. [00:43:00] Speaker 02: And also, there's a commenter in this proceeding named IPVM, which is a security expert who submitted a lot of comments that this particular... Who was it? [00:43:09] Speaker 02: IBM, did you say? [00:43:10] Speaker 02: No, sorry. [00:43:11] Speaker 02: IPVM is the name of the commenter. [00:43:13] Speaker 02: We cite their comments in our brief if you want to follow that up. [00:43:16] Speaker 02: So there's some evidence of that, but I began by saying that that's not how these guys wound up on the covered list. [00:43:23] Speaker 02: Secure Networks Act referred to the previous statute, and the FCC relied on that determination from Congress. [00:43:29] Speaker 02: If you had another entity going forward, maybe somebody that makes something which could be connected to the internet, then this capability prong of the statute would probably do a lot of work. [00:43:39] Speaker 02: And you'd have to say, well, is it capable of posing this kind of threat? [00:43:42] Speaker 02: But in this case, the agency's position was that determination had been made by Congress. [00:43:46] Speaker 02: Got it. [00:43:46] Speaker 02: Thank you. [00:43:47] Speaker 05: I just want to know what the statutory text was applying that next case. [00:43:50] Speaker 05: I want to make sure I understand your position. [00:43:52] Speaker 05: So that next case, [00:43:54] Speaker 05: They're going to say we are not essential to the provision of high speed switch broadband telecommunications capability that enables things. [00:44:06] Speaker 05: And your reading is that the definition of what's essential to the provision of high speed, can I just say broadband to save our time? [00:44:17] Speaker 02: Sorry, the adjectives are not what's important. [00:44:19] Speaker 02: My point was just that lumped in with that was video communications. [00:44:23] Speaker 05: That's what it enables. [00:44:24] Speaker 05: And so your reading is that what is essential to the provision of power that enables activities [00:44:32] Speaker 05: It's also the activities that are enabled, because video equipment doesn't show up until the end as a list of things that is enabled, that you can do with broadband. [00:44:42] Speaker 05: I'm just trying to understand, so you read the enablement clause as also part of the definition of what counts? [00:44:49] Speaker 02: I think that's a reasonable reading. [00:44:51] Speaker 02: Is that your reading? [00:44:53] Speaker 05: Is that the commission's reading? [00:44:55] Speaker 05: Because you keep saying it lists video telecommunications, but it only lists that as something that's enabled by the broadband telecommunications capability. [00:45:04] Speaker 02: So that is the commission's reading. [00:45:06] Speaker 02: So here's why I think the commission's view of the Secure Networks Act is in order to be communications equipment, [00:45:14] Speaker 02: We're going to have a broad definition. [00:45:15] Speaker 02: We're going to interpret essential to broadly, and the agency explains why. [00:45:20] Speaker 02: But that doesn't put you on the covered list. [00:45:22] Speaker 02: You're in the basket of things which are eligible to be on the covered list. [00:45:26] Speaker 05: No, I'm just trying to understand this as plain English. [00:45:28] Speaker 05: So you read everything that's enabled to be used by broadband telecommunications. [00:45:33] Speaker 05: That's everything. [00:45:35] Speaker 02: Everything that, I'm sorry, can you say that one more time? [00:45:37] Speaker 05: You're reading everything that, you're reading, essential to the provision of high-speed switch broadband telecommunications capability that enables, and then it lists users to originate and receive, and then it lists the things that users originate and receive. [00:45:54] Speaker 00: Right. [00:45:54] Speaker 05: You're saying what they originate and receive, which is anything anyone does on their broadband. [00:46:00] Speaker 05: on their internet, right? [00:46:01] Speaker 05: Anything that I use on my internet at home is enabled by that internet. [00:46:06] Speaker 05: Graphics, voice. [00:46:10] Speaker 02: So devices which would make use of that capability and become part of the network which allows that activity. [00:46:17] Speaker 05: So that makes those devices become essential to the provision of this capability. [00:46:23] Speaker 05: I'm just trying to make sure I understand this. [00:46:24] Speaker 02: Right, so the essential comes from the Secure Networks Act, and then this capability is defined. [00:46:28] Speaker 02: This, as you, I'm sure, know, this specific definition really served a different purpose originally in the 1996 Act, Communications Act. [00:46:39] Speaker 02: So essential to what? [00:46:42] Speaker 02: Essential to advance communications is what Congress actually said in the Secure Networks Act, and then it cross-referenced another statute. [00:46:48] Speaker 02: And the agency said, well, what do we think's going on here? [00:46:50] Speaker 02: Why is it cross-referencing this other statute? [00:46:52] Speaker 02: And one clue that we have about what this means is these forms of equipment that are referenced in the 2019 NDAA. [00:47:02] Speaker 02: So I think, you know, we often wish Congress had written things with more lucid clarity, but here I think it was clear that Congress was trying to get at something, and it was very reasonable for the FCC to say, whatever else is in this basket, it looks like they're concerned with video telecommunications, or excuse me, video surveillance equipment from Hikvision and Dahua. [00:47:24] Speaker 03: Can I ask a question? [00:47:25] Speaker 03: Is there a procedure by which Hikvision and Dawak can contest their presence on the list other than what they've done here? [00:47:35] Speaker 02: So I think the remedy here is with Congress, because the way they wound up on this list was a determination made by Congress. [00:47:44] Speaker 03: That's the only way. [00:47:44] Speaker 03: There's no way through the agency. [00:47:47] Speaker 03: they can challenge that. [00:47:48] Speaker 02: I think so, because what the FCC has said is we don't have discretion to make further determinations about capability, et cetera, because Congress has made that determination. [00:48:00] Speaker 02: We do have a standing argument. [00:48:02] Speaker 02: I notice you've not asked questions about it, so I don't need to belabor it. [00:48:06] Speaker 05: But we think there's a- Did you want to talk about the definition of critical infrastructure? [00:48:10] Speaker 02: Yes. [00:48:10] Speaker 02: I was going to say I'm happy to talk about critical infrastructure. [00:48:15] Speaker 02: So as this court knows well, agencies can proceed incrementally. [00:48:18] Speaker 02: They can have a rulemaking and then follow up with further explication through adjudication. [00:48:26] Speaker 02: And that's pretty clearly what the FCC envisions happening here. [00:48:29] Speaker 02: It cross-reference other expert [00:48:32] Speaker 02: government sources, the Patriot Act, and then two other executive agencies who deal with critical infrastructure all the time. [00:48:39] Speaker 02: And it said, this is what we think is critical infrastructure. [00:48:43] Speaker 02: And if you have any questions, please bring them to us. [00:48:46] Speaker 05: Well, you said anything connected to... Right, it did. [00:48:50] Speaker 02: It did. [00:48:50] Speaker 05: But all of that, if you look at paragraph 212... So are laundromats in or out? [00:48:55] Speaker 02: We don't know, but I think... No, we don't know yet. [00:48:59] Speaker 02: I mean, I think that's fair. [00:49:00] Speaker 02: Agencies can proceed that way. [00:49:01] Speaker 02: So what's happening now? [00:49:02] Speaker 05: Wait, so do you have a meaningful definition that anyone can predict things under or not? [00:49:07] Speaker 02: Yes. [00:49:07] Speaker 02: So it still has to satisfy the definition in the Patriot Act. [00:49:11] Speaker 05: No, you said or anything connected to the definition, what's defined in the Patriot Act and these other definitions. [00:49:17] Speaker 02: I think we read fairly what the agency said is we're adopting the Patriot Act definition, which is, you know, resources [00:49:25] Speaker 02: So critical that impairment would be a threat to national security. [00:49:29] Speaker 05: And then the agency's anything connected to those, that critical infrastructure will also be critical infrastructure, correct? [00:49:36] Speaker 02: Well, it said could, let's look at, it's paragraph 212, I believe. [00:49:43] Speaker 02: Or sorry, yeah, so paragraph 212. [00:49:45] Speaker 05: Which page is that of the JA? [00:49:46] Speaker 02: It's JA 210. [00:49:56] Speaker 02: Okay, so it begins by saying, we are adopting the meaning provided by the Patriot Act. [00:50:03] Speaker 02: And then the agency goes on and references these two sources and says, for purposes of implementing the rules, we find that a system connected to these other sources could reasonably be considered critical infrastructure. [00:50:18] Speaker 02: But I think a fair reading, this still has to fit within the Patriot Act definition. [00:50:23] Speaker 05: Wait, sorry, you're in paragraph 212? [00:50:25] Speaker 02: Sorry, I jumped to the end of paragraph 212, which is actually JA211. [00:50:29] Speaker 05: The next page, right? [00:50:30] Speaker 02: Yes, the next page. [00:50:30] Speaker 02: Okay, sorry. [00:50:31] Speaker 02: The end of that paragraph. [00:50:33] Speaker 02: So I think all of this. [00:50:34] Speaker 05: Do you find that these systems or assets, physical or connected to, could reasonably be considered critical infrastructure? [00:50:41] Speaker 05: So does that mean they are or they aren't? [00:50:43] Speaker 05: Or does that mean it's a free for all, you gotta go through it one, everyone's gotta adjudicate this one instance at a time before the agency? [00:50:50] Speaker 02: Well, so I say two things. [00:50:52] Speaker 02: It always has to fit in this basket of the Patriot Act, right? [00:50:56] Speaker 02: So it still has to be a system [00:50:59] Speaker 05: No, you say that in addition, things connected to. [00:51:06] Speaker 02: What I think a fair reading of this paragraph. [00:51:08] Speaker 05: The 16 in the presidential directive and the 55 in the, I forget, national critical functions could reasonably considered, critical infrastructure, reasonably considered by whom? [00:51:21] Speaker 02: It says in paragraph 212, we delegate to these bureaus to develop further clarification [00:51:26] Speaker 05: I'm just asking you, what is the point of the sentence if it does not sweep anything else? [00:51:32] Speaker 05: Does this sentence could reasonably consider critical infrastructure? [00:51:36] Speaker 05: Does this sweep anything in that's not covered by the Patriot Act or these two documents? [00:51:42] Speaker 05: Yes or no? [00:51:44] Speaker 02: Oh, you mean just the specific word connected sweep something in? [00:51:49] Speaker 02: So all it's connected to is these other two documents. [00:51:51] Speaker 02: So I think it's still those. [00:51:56] Speaker 02: the sources in those two documents. [00:51:58] Speaker 05: So when you say connected to, it's not, connected to is not a reference. [00:52:03] Speaker 05: It says connected to the 16 and the 55. [00:52:07] Speaker 05: So it's things that are connected to the list, the two. [00:52:11] Speaker 02: Right, I think if you have a concrete example, [00:52:15] Speaker 02: When the agency has a concrete example in front of it, it can speak to this more clearly as it's gonna happen right now. [00:52:21] Speaker 02: So petitioners have these marketing plans. [00:52:24] Speaker 05: They have to explain how they're- Can you tell me, is there anything that counts as connected to these critical infrastructure? [00:52:31] Speaker 05: I'll just call them the list to save some time, the two lists. [00:52:36] Speaker 05: Okay, sure. [00:52:37] Speaker 05: That isn't on those lists already. [00:52:39] Speaker 02: I don't think so. [00:52:40] Speaker 02: Have you looked at the list? [00:52:42] Speaker 05: I have looked at these lists, but I don't understand why you don't just stop and say we're doing the Patriot Act definition as well as the things on these two lists. [00:52:51] Speaker 05: You're telling me connected to the two lists just means on the two lists. [00:52:58] Speaker 02: I have only what's in front of me, which is this paragraph, but I think that that's a fair reading of it. [00:53:02] Speaker 05: I don't want a fair reading. [00:53:03] Speaker 05: I want to know what the FCC is reading. [00:53:05] Speaker 02: All the FCC has said, of course, is what's in the paragraph, so I can't go beyond that. [00:53:10] Speaker 02: But I think that when this Court is trying to decide whether the agency acted reasonably, and I think the question there is, was this a reasonable way to explicate the term critical infrastructure? [00:53:21] Speaker 02: And this court has said many times it's reasonable to proceed incrementally. [00:53:25] Speaker 02: It's reasonable to have a rulemaking and then elucidate through adjudication. [00:53:29] Speaker 02: So I would submit, I mean, the alternative might be to list every kind of business in America and have a checklist in or out, but that would be a very long list indeed. [00:53:38] Speaker 02: So this seems to be a reasonable way for the agency, which is a communications agency, not a national security agency, to proceed. [00:53:46] Speaker 04: Any other questions? [00:53:46] Speaker 03: Yes. [00:53:47] Speaker 03: I just have one final question. [00:53:48] Speaker 03: So one way we could resolve this case is just to read the Secured Equipment Act as saying there should be no equipment authorizations for people on the list identified by this. [00:54:01] Speaker 03: These petitioners are on the list, and the regulation implements that. [00:54:07] Speaker 03: And we would not have to read into the Secured Equipment Act any ratification of the process by which [00:54:15] Speaker 03: these petitioners got onto the list. [00:54:18] Speaker 03: We can just take the Secured Equipment Act at face value, can't we? [00:54:22] Speaker 03: You can. [00:54:23] Speaker 03: And then we wouldn't have to get into any of these other statutes and what they say and whether [00:54:31] Speaker 03: like who should really be on the list and who shouldn't, and what does all this mean? [00:54:34] Speaker 02: I think that that's a fair way to decide this case. [00:54:37] Speaker 02: The only thing I would say is if the agency got it wrong and misinterpreted the Secure Networks Act, this would be a strange course of behavior for Congress. [00:54:46] Speaker 02: So I think I submit to you the better reading. [00:54:48] Speaker 03: I had no idea what Congress was thinking about that process. [00:54:52] Speaker 03: And couldn't this just be resolved in a future case when somebody else gets put on the list and they want to litigate whether they should be there or not? [00:54:58] Speaker 04: That is when all of these statutory arguments would properly be I think that's an excellent way to decide this case Thank you [00:55:34] Speaker 00: Thank you, Your Honor. [00:55:35] Speaker 00: It may please the Court, Tom Johnson appearing for Motorola Solutions. [00:55:39] Speaker 00: You know, often, Your Honors, in these administrative law cases, courts, even without explicit evidence, will apply a canon saying that Congress is presumed to be aware of the administrative interpretation of a statute. [00:55:52] Speaker 00: Here, we don't need to guess, because Congress explicitly [00:55:57] Speaker 00: referenced the FCC's equipment authorization proceeding by docket number in the Secure Equipment Act, as well as the covered list, which applied only to those handful of entities that appeared on the NDAA. [00:56:13] Speaker 00: And in this sensitive national security area, in which this court frequently defers to the political judgments, the judgments of the political branches, it's an unusual case here where you actually have [00:56:24] Speaker 00: a Congress that is very responsive to what the FCC is doing and has shown time and time again that it is willing to enact new laws to cap in the FCC's discretion and ensure that the judgments of national security agencies are being taken into account and to tell the agency exactly how to do it. [00:56:44] Speaker 00: So this is not a process that is broken. [00:56:47] Speaker 00: And to address some of the questions that you raised, Judge Mallette, in terms of the outer meaning of what essential might be or what covered communications equipment or services might be under this statute, at minimum, it has to be broad enough to encompass the subsection C determinations that Congress said the commission must place on the covered list. [00:57:12] Speaker 00: And so if you just read the text of C3, which is the one that's at issue here, the communications equipment or service being covered telecommunications equipment or services, as defined in section 889 F3 of the NDAA. [00:57:29] Speaker 00: And so we're looking for either what's the most reasonable reading of this statute, if you're going to defer to the FCC or at minimum, what's the better reading of the statute. [00:57:38] Speaker 00: And it is by far better to presume that in such a prescriptive statute, [00:57:43] Speaker 00: where the commission is being given explicit instructions that Congress didn't intend to bury within a single word essential some additional limitation on what might appear on the covered list. [00:57:55] Speaker 00: raise all the problems you're discussing, Judge Mallette. [00:57:57] Speaker 00: Are routers in or out? [00:57:58] Speaker 00: Are redundancies in the network in or out? [00:58:01] Speaker 00: In reply, they said, well, it's not an equipment specific. [00:58:03] Speaker 05: There's also a problem with saying anything that's used with broadband counts as essential to the provision of broadband. [00:58:11] Speaker 00: I don't think that's a problem, Your Honor. [00:58:14] Speaker 00: Again, looking for the better reading. [00:58:16] Speaker 00: I mean, this court has often said that the word necessary can't literally mean indispensable. [00:58:20] Speaker 00: That's just unworkable and would gut the statute. [00:58:23] Speaker 00: We cite in our brief examples of cases where- The word here is essential, right? [00:58:27] Speaker 05: The word's essential, and so we're not aware- Because essential means something that doesn't contribute at all to the provision of broadband service. [00:58:36] Speaker 00: Well, we would disagree, Your Honor. [00:58:38] Speaker 00: First of all, we do think it's sort of a nesting doll where at minimum it encompasses the NDAA equipment based on the language of C3. [00:58:46] Speaker 00: But even if not, Your Honor, we do cite to authorities in our case, even the dictionaries that the petitioners cite that say essential doesn't need to mean literally. [00:58:56] Speaker 00: uh, indispensable. [00:58:57] Speaker 05: I mean, you talk about an essential question, essential does it have to contribute in some way to the provision of broadband? [00:59:05] Speaker 00: Yes, your honor. [00:59:06] Speaker 05: And I think that surveillance video equipment contribute in some way to the provision of this high speed switch broadband telecommunications capability. [00:59:15] Speaker 00: Sure, it is a capability that permits the end user to connect to a network. [00:59:21] Speaker 05: No, that's what's created. [00:59:23] Speaker 05: They have to be essential to creating the capability. [00:59:27] Speaker 05: That's what the text is. [00:59:28] Speaker 05: You can't say the things that you can then do with it are essential to creating the capability. [00:59:33] Speaker 00: Well, Your Honor, before we get to the more technical definitions, right, the very start of the phrase, [00:59:39] Speaker 00: is essential to the provision of. [00:59:41] Speaker 00: So if, as I would submit, essential is broad enough to mean something like core, characteristic of the nature of, important to, peripheral and user equipment fits that definition. [00:59:53] Speaker 00: To the provision of what? [00:59:55] Speaker 05: What do they provide? [00:59:57] Speaker 00: They provide a form of advanced communication services, which is video. [01:00:02] Speaker 05: Okay, so video surveillance equipment is a form of, because that advanced communication service has a definition. [01:00:11] Speaker 05: I'm trying, because I'm just not in this technical area at all. [01:00:14] Speaker 05: So their video equipment is a form of high speed switch broadband telecommunications. [01:00:22] Speaker 00: So your honor, they're not providing broadband service. [01:00:25] Speaker 00: They're providing end user devices that connect to the network. [01:00:28] Speaker 00: And I agree, perhaps this could have been written more artfully, but it's clear that in the NDAA, video surveillance equipment is included. [01:00:35] Speaker 07: If you construe it the other way, then your argument is that means Congress made a mistake. [01:00:45] Speaker 07: Not the FCC. [01:00:47] Speaker 07: It would be Congress that made the mistake. [01:00:49] Speaker 00: That's exactly right, Your Honor, and Judge Pan made a similar point earlier, which is you would be looking at this single word to essentially eliminate from the covered list HIC vision equipment, DAO equipment, because they say they are customer premises and user equipment, as well as ZTE. [01:01:06] Speaker 00: You asked a question about ZTE. [01:01:07] Speaker 00: ZTE is a cell phone manufacturer. [01:01:09] Speaker 00: There's evidence that the legislators were particularly concerned about ZTE. [01:01:14] Speaker 00: If cell phones produced by ZTE [01:01:18] Speaker 00: could not be on the covered list, that would be the implication if we read essential to only refer to core network equipment. [01:01:29] Speaker 00: And Judge Randolph, this sort of relates to a question you asked about what Congress was concerned about and how we would know. [01:01:34] Speaker 00: Council for the FCC mentioned the technical capabilities, but if you look at the NDAA, this section at the very end after it lists these specific companies, [01:01:50] Speaker 00: There's a catch-all that says video surveillance equipment or services produced or provided by an entity, this is F3D, that the Secretary of Defense reasonably believes to be an entity owned or controlled by or otherwise connected to the government of a covered foreign country, which is China. [01:02:08] Speaker 00: And if you go back to the first supply chain in order, again, this has been an iterative process, the very first supply chain in order. [01:02:14] Speaker 00: And would you give me the citation again to the- Absolutely, Your Honor. [01:02:20] Speaker 00: Subsection F3D. [01:02:24] Speaker 00: I could try to find it in the appendix as well. [01:02:26] Speaker 00: Oh, yes. [01:02:27] Speaker 07: Yeah, yeah, that's the critical infrastructure. [01:02:30] Speaker 00: So that's what Congress cared about, Your Honor. [01:02:32] Speaker 00: And in the first supply chain in order, there is both a public and confidential record talking about how Chinese state-controlled companies need to comply, the espionage law in China to provide backdoor capabilities into equipment. [01:02:45] Speaker 00: All of these orders have been building on one another. [01:02:48] Speaker 00: And so Congress has made this determination, and that is why, Your Honor, that the more plausible reading of the statute is to say that anything with the capability to interact with the network has this potential. [01:02:59] Speaker 00: And again, that is sort of the judgment of Congress. [01:03:04] Speaker 00: I was going to respond to your question about future cases, Your Honor, if I have a minute. [01:03:08] Speaker 04: Any other further questions? [01:03:10] Speaker 04: No, because you're over your time. [01:03:11] Speaker 00: Thank you very much. [01:03:12] Speaker 00: Thank you. [01:03:12] Speaker 00: Thank you, Your Honor. [01:03:14] Speaker 04: Now, Mr. Wright, we'll give you two minutes. [01:03:26] Speaker 08: Thank you, Your Honors. [01:03:29] Speaker 08: Judge Randolph, you asked about whether anybody had considered what dangerous capabilities equipment at issue has. [01:03:37] Speaker 08: I'd just like to note that in paragraph 169 of the FCC's order, it specifically declined to even try to explain how this equipment had dangerous capabilities. [01:03:49] Speaker 08: That contrasts very sharply. [01:03:52] Speaker 07: Was there any history [01:03:54] Speaker 07: with respect to your client and the other company of any interactions with US security that may have put Congress on the alert for this? [01:04:07] Speaker 08: Your Honor, what happened was a representative, a member of the House, visited Fort Leonardwood, was very concerned that they were using Hikvision cameras. [01:04:21] Speaker 08: Dawei makes very similar equipment. [01:04:24] Speaker 07: That's how the amendment got into the... I suppose that if you were worried about it, as Congress apparently was, that it would be impossible to open up and inspect every single surveillance camera that went into a home or a business in the United States. [01:04:45] Speaker 07: How else could you regulate it except by barring it altogether? [01:04:49] Speaker 08: Right. [01:04:50] Speaker 08: But remember that same act has the dangerous capabilities requirement in it. [01:04:56] Speaker 08: So somebody has to determine whether it has dangerous capabilities. [01:05:01] Speaker 08: And let me just say that this is in contrast to the Huawei and ZTE equipment. [01:05:06] Speaker 08: The bill [01:05:08] Speaker 08: as entered into the House had detailed findings about Huawei and ZTE equipment. [01:05:16] Speaker 08: And of course, it didn't mention video surveillance cameras. [01:05:20] Speaker 08: And DOJ and various other federal agencies have issued reports about Huawei and ZTE, but nobody said that video surveillance cameras have the dangerous capabilities in the act. [01:05:34] Speaker 05: Well, what do I do if I think it's a very close question? [01:05:39] Speaker 05: But the political branches, one reason of the statute is that the political branches have come together and said, those on the covered list shall not have their equipment authorized, full stop. [01:05:54] Speaker 05: Do we as a court need to defer to what looks like a joint? [01:05:59] Speaker 05: This is national security, not our wheelhouse. [01:06:03] Speaker 05: It seems like to rule for you, we would have to say, I think as Judge Pan suggested, [01:06:11] Speaker 05: Well, they didn't really mean what they seem to, at least the obvious consequence of what they've said. [01:06:18] Speaker 05: And instead, there's this sort of hyper-technical definition that we're supposed to go back and employ, even though Congress itself doesn't seem to be using it. [01:06:25] Speaker 08: So, well, I think the task is to look at the text of the SNA, which has three requirements to be on the covered list, and I think your questions, I mean, essential doesn't mean used, and that's implausible. [01:06:42] Speaker 08: You understand clearly that just something that can be plugged in isn't essential to broadband. [01:06:52] Speaker 08: This equipment flunks the threshold test. [01:06:55] Speaker 08: Congress would want to change that. [01:06:57] Speaker 08: It can't, but I think you have to read the statute and Judge Pan. [01:07:01] Speaker 08: I think the easiest way to proceed is actually to address the threshold issue [01:07:08] Speaker 08: Determine the video surveillance equipment is simply not essential to provision broadband service and that's all you need to decide Let me note one other thing with respect to the secure equipment act and and part of the reason why I think it's clear that it only applies to the consequences of being on the list not the requirements for big on the list and [01:07:34] Speaker 08: In the NPRM that was referenced by Congress in the SEA, the FCC determined in paragraph 65 at JA 47 that it was not specifically authorized by the Secure Networks Act to deny certification to equipment on the covered list. [01:08:01] Speaker 08: And so Congress then stepped in and said, oh, yes, you should deny certification to things on the covered list. [01:08:10] Speaker 08: That's the consequence. [01:08:11] Speaker 08: It said nothing about the requirements of being on the list. [01:08:21] Speaker 08: Thank you, Your Honors. [01:08:25] Speaker 04: Any questions? [01:08:25] Speaker 04: Yeah. [01:08:25] Speaker 04: OK. [01:08:25] Speaker 04: You wanted one minute? [01:08:33] Speaker 09: I would like to address one point that Mr. Dunn made during his presentation, which was that he said the FCC is proceeding incrementally by adjudication to determine what critical infrastructure means. [01:08:46] Speaker 09: I would say that even if the FCC had stopped with the Patriot Act definition and not added the additional commentary, there would still be borderline cases where adjudication would be necessary to determine what's critical infrastructure. [01:08:59] Speaker 09: The problem we have in this case is that the FCC has prescribed an unreasonable standard to be applied in those adjudications. [01:09:06] Speaker 09: And it has immediate effect because all Dawai and Hickvision equipment, at least by the terms of the list that the FCC prescribed, is now covered equipment and is subject to various restrictions under the Secure Network Act such as you can't use federal funds to purchase it. [01:09:23] Speaker 09: So we believe that this is an issue that's ripe for adjudication now. [01:09:29] Speaker 09: Questions? [01:09:30] Speaker 05: Thank you very much. [01:09:31] Speaker 05: The case is submitted.