Late last week, the Federal Communications Commission’s Enforcement Bureau announced a settlement with telecom Truphone Inc., a Delaware corporation and subsidiary of privately held foreign-based Truphone Ltd. The FCC said that Truphone had not been truthful about the degree of foreign ownership and also transferred control of FCC licenses and international authorization without approval.
According to its website, Truphone offers a “complete eSIM solution” and touts itself as “one of the world’s leading innovators in eSIM, cloud and digital solutions.”
The FCC issued the company a notice of apparent liability earlier this year over what it perceived to be omissions. In its April-issued notice, the FCC proposed a forfeiture penalty of approximately $660,600 citing willful and repeated violations of the FCC Act since 2011.
In particular, the agency pointed to Truphone’s failure to obtain approval prior to exceeding the common carrier ownership limits placed on foreign entities, its unauthorized transfer of radio licenses, and its inaccurate reporting of ownership transfer to an entity not vetted by the FCC or the executive branch. Among these transfers, the FCC highlighted Truphone’s declaration that as of March 2022, a 22.8% interest is held by a family trust of a citizen of Israel, Portugal, and Russia.
As motivation for the enforcement action, the FCC cited its goal of ensuring that access to the telecommunications services market in the United States remain consistent with U.S. national security and law enforcement prerogatives.
In addition to the monetary penalty, Truphone has agreed to divest itself of Russian ownership, and ensure that all foreign investment complies with the Treasury Department’s sanctions list.
