China Telecom should be banned from operating in US, departments say

April 10, 2020

State, Defence, Justice and other departments tell FCC firm poses ‘unacceptable national security and law enforcement risks’

China Mobile, another state-owned telecoms firm, was denied right to provide services in US in May over espionage fears

Last year, two US senators asked the FCC to review the approval of China Telecom to operate in the United States. Photo: Reuters

Several US departments are urging the Federal Communications Commission (FCC) to revoke China Telecom (Americas) Corp’s authorisation to provide international telecommunications services to and from the United States.

“This recommendation reflects the substantial and unacceptable national security and law enforcement risks associated with China Telecom’s continued access to US telecommunications infrastructure,” the group of departments, including State, Justice, Defence, Homeland Security and Commerce, as well as the United States Trade Representative, said in a filing to the FCC on Thursday.

The call came as the FCC continues its review of China Telecom, an inquiry that began last year. The US subsidiary of the Chinese state-owned telecommunications company has held the license to provide services in the US since 2007.

Last May, the FCC voted unanimously to deny the request of another state-owned Chinese telecommunications company, China Mobile, to provide services in the United States. FCC Chairman Ajit Pai said after that vote that the commission had determined China Mobile is controlled by the Chinese government.

The statement on Thursday cited risks that the Chinese government could use the FCC’s approval to conduct espionage against the US government.

China’s telecommunications companies have come under heightened scrutiny by the US. Last year, lawmakers urged an FCC review of China Telecom and another Chinese telecommunications company, China Unicom.

Also last year, the Trump administration placed Huawei Technologies – the Chinese telecoms company that is the global leader in next-generation 5G technology, on an “entity list” and barred it from buying critical components from its American suppliers.

The US has also urged other governments around the world to exclude Huawei from developing their 5G infrastructure, citing national security risks.

In Thursday’s filing, the departments contended that the Chinese government has “ultimate ownership and control” of China Telecom and the company’s US operations.

Such ownership might allow Chinese government entities “to engage in malicious cyber activity enabling economic espionage and disruption and misrouting of US communications” and “provide opportunities for increased Chinese government-sponsored economic espionage”, according to the filing.

The departments also contended in their filing that China Telecom had made inaccurate statements about where its US records were stored, and that it had made inaccurate statements to US customers about its cybersecurity and privacy practices that may fall short of complying with US law.

On Wednesday, the FCC agreed to allow Alphabet unit Google to use part of a US-Asia undersea telecommunications cable.

Google agreed to operate only a portion of the 12,900km (8,000-mile) Pacific Light Cable Network System between the United States and Taiwan, but not Hong Kong. Google and Facebook helped pay for construction of the now completed telecommunications link, but US regulators have blocked its use.

On Wednesday, the Justice Department said US agencies believe “there is a significant risk that the grant of a direct cable connection between the United States and Hong Kong would seriously jeopardise the national security and law enforcement interests of the United States”.

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