The U.S. Federal Communications Commission (FCC) on Tuesday voted to revoke authorization for China Telecom’s U.S. subsidiary to operate in the United States, citing national security concerns.
China Telecom, the largest Chinese telecommunications company, has had authorization to provide telecommunications services for nearly 20 years in the United States. China Telecom Americas must now discontinue services within 60 days.
The FCC in April, 2020, had warned that it might shut down the U.S. operations of three state-controlled Chinese telecommunications companies, citing national security risks, including China Telecom Americas as well as China Unicom Americas, Pacific Networks Corp and its wholly owned subsidiary ComNet (USA) LLC.
“The FCC’s decision is disappointing. We plan to pursue all available options while continuing to serve our customers,” a China Telecoms America spokesperson told Reuters.
The FCC found that China Telecom “is subject to exploitation, influence, and control by the Chinese government and is highly likely to be forced to comply with Chinese government requests without sufficient legal procedures subject to independent judicial oversight.”
It added that “China Telecom Americas’ ownership and control by the Chinese government raise significant national security and law enforcement risks by providing opportunities” for the company and the Chinese government “to access, store, disrupt, and/or misroute U.S. communications.”
In March, the FCC began efforts to revoke authorization for China Unicom Americas, Pacific Networks and its wholly owned subsidiary ComNet to provide U.S. telecommunications services.
In May, 2019, the FCC voted unanimously to deny another state-owned Chinese telecommunications company, China Mobile, the right to provide U.S. services.
The FCC has taken other actions against Chinese telecoms and other companies.
Last year, the FCC designated Huawei Technologies Co and ZTE Corp (000063.SZ), as national security threats to communications networks – a declaration that barred U.S. firms from tapping an US$8.3-billion government fund to purchase equipment from the companies.
The FCC in December adopted rules requiring carriers with ZTE or Huawei equipment to “rip and replace” that equipment. In March, the FCC designated five Chinese companies as posing a threat to national security under a 2019 law, including Huawei, ZTE, Hytera Communications, Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co.
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