FCC may halt U.S. operations of three state-controlled Chinese telecom firms

FCC may halt U.S. operations of three state-controlled Chinese telecom firms

The Federal Communications Commission (FCC) said on Friday that it could shut down the U.S. operations of three state-controlled Chinese telecommunications companies, citing national security risks. The FCC has issued so-called show-cause orders to China Telecom Americas, China Unicom Americas, Pacific Networks Corp and its wholly owned subsidiary ComNet (USA) LLC, instructing them to explain why it shouldn’t start withdrawing authorizations making their US operations.

The FCC’s action is the latest sign that President Donald Trump’s government is taking a hard line toward China. “We simply cannot take risks and hope for the best when it comes to securing our networks,” FCC chairman Ajit Pai said in a statement.

The FCC approved the firms more than ten years ago. It has since said, “The risks to national security and law enforcement associated with the activities of the Chinese government have increased significantly.” The agency’s show caused orders referring to the “sophistication and resulting damage of the Chinese government’s involvement in computer breaches and attacks on the United States,” but did not go further.

The United States Department of Justice and other federal agencies called on the FCC this month to revoke China Telecom’s ability to operate in the United States. In May 2019, the FCC unanimously voted to deny another state-owned Chinese telecommunications company, China Mobile Ltd, the right to provide services in the United States, citing the risk that the Chinese government could use the approval to espionage to commit against the United States government.

China Telecom Americas is the American subsidiary of a Chinese state-owned telecommunications company. A China Telecom spokesperson said on Friday that the company “has had a good reputation in the United States for nearly 20 years. We look forward to sharing information with the FCC in the coming weeks that speaks about our role as a responsible telecom company.” The other companies mentioned on the show cause orders not to respond to requests for comment.

Pacific Networks sells international voice and data to U.S. operators on an international 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 and Trump ally, praised the review, saying that “the operation in the United States will continue to threaten our critical networks for as long as it continues.”

Chinese telecommunications networks and companies are under strict supervision of US authorities. The FCC agreed this month to allow Alphabet Inc unit Google to use part of an undersea telecommunications cable in the United States and Asia, but not part that was connected to Hong Kong. Google agreed to operate only part of the 8,000-mile (12,875 km) Pacific Light Cable Network System between the United States and Taiwan. Google and Facebook Inc helped pay for the construction of the now-completed telecommunications connection, but US regulators have blocked its use.

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