FCC may halt US operations of three state-controlled Chinese telecom businesses

FCC - Federal Communications Commission

The Federal Communications Commission has said it may shut down the US operations of three state-controlled Chinese telecommunications companies, citing national security risks. 

The FCC issued so-called show cause orders to China Telecom Americas, China Unicom Americas, Pacific Networks Corp and its wholly owned subsidiary ComNet (USA) LLC, directing them to explain why it should not start the process of revoking authorisations enabling their US operations.

The FCC’s action represents the latest sign of President Donald Trump’s administration taking a hard line toward China.

“We simply cannot take a risk and hope for the best when it comes to the security of our networks,” FCC Chairman Ajit Pai said in a statement.

The FCC granted its approvals to the firms more than a decade ago. Since then, it said, “the national security and law enforcement risks linked to the Chinese government’s activities have grown significantly.”

The agency’s show cause orders referred to the “sophistication and resulting damage of the Chinese government’s involvement in computer intrusions and attacks against the United States,” but did not elaborate.

The US Justice Department and other federal agencies this month called on the FCC to revoke China Telecom’s ability to operate in the United States.

Related Article:
Nokia wins 5G radio equipment contract from BT

In May 2019, the FCC voted unanimously to deny another state-owned Chinese telecommunications company, China Mobile Ltd, the right to provide services in the US, citing risks that the Chinese government could use the approval to conduct espionage against the U.S. government.

China Telecom Americas is the US subsidiary of a Chinese state-owned telecommunications company. A spokesman for China Telecom said on Friday the company “has been operating in good standing in the United States for nearly 20 years. We look forward, in the coming weeks, to sharing information with the FCC that speaks to our role as a responsible telecom company.”

The other companies named in the show cause orders did not respond to requests for comment.

Pacific Networks resells international voice and data to US operators on a wholesale basis and ComNet provides international termination service, global SIM card service and international calling card service and interexchange service, the FCC said.

Senator Tom Cotton, a Republican ally of Trump, praised the review and said the firms’ “operation in the United States will continue to pose a threat to our critical networks as long as it continues.”

Related Article:
Twitter aims to double revenue by 2023, teases new 'super follow' feature

China’s telecommunications networks and companies have come under heightened scrutiny by US agencies. The FCC this month agreed to allow Alphabet Inc unit Google to use part of an US-Asia undersea telecommunications cable but not a part that connected with Hong Kong.

Google agreed to operate only a portion of the 8,000-mile (12,875-km) Pacific Light Cable Network System between the US and Taiwan. Google and Facebook helped pay for construction of the now completed telecommunications link but US regulators have blocked its use.

Via our content partners at Reuters. Reporting by David Shepardson; Editing by Chizu Nomiyama, Tom Brown and Will Dunham)

Share this article