FCC Looking at Revoking Authorizations for 4 Chinese Telcos
The FCC issued show cause orders Friday against four companies “ultimately subject to the ownership and control of the Chinese government.” China Telecom Americas, China Unicom Americas, Pacific Networks and ComNet were ordered to explain why the FCC shouldn't begin the process of revoking their domestic and international authorizations allowing them to operate in the U.S. The companies have 30 days to respond.
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Last May, commissioners unanimously denied China Mobile’s application for certification under Section 214 of the Communications Act (see 1905090039). Executive branch agencies, led by DOJ, recently recommended the FCC revoke China Telecom's U.S. authorizations for international telecom services and action was expected (see 2004100062).
“Foreign entities … must not pose a risk to our national security,” said Chairman Ajit Pai. “The Show Cause Orders reflect our deep concern … about these companies’ vulnerability to the exploitation, influence, and control of the Chinese Communist Party, given that they are subsidiaries of Chinese state-owned entities. We simply cannot take a risk and hope for the best when it comes to the security of our networks.”
“It is appropriate to expedite given serious national security interests,” Commissioner Mike O’Rielly tweeted: “No one should be pleased by necessity for this.”
"It is no longer enough for the United States to be first to 5G,” Commissioner Jessica Rosenworcel said in a statement: “If we want to ensure our continued technology leadership, the networks we deploy must also be secure. National security agencies have raised concerns that these companies pose an unacceptable risk to our networks, and the FCC should investigate quickly.”
The FCC action was expected, said a lawyer who follows China issues: “There were probably lots of ways the FCC could have proceeded on these issues, but … it was a forgone conclusion that they were going to take some sort of action against some combination of those companies.”
“As countries around the world fight the COVID-19 pandemic, we rely more than ever on our communications networks,” said Commissioner Geoffrey Starks: “With such an unprecedented increase in data traffic, we’ve never had a greater need to ensure the security of these communications.”
Sen. Tom Cotton, R-Ark., praised the FCC for taking action against the four companies. “No matter their cries to the contrary, these firms are beholden to the Chinese Communist Party, and their operation in the United States will continue to pose a threat to our critical networks as long as it continues,” Cotton said: Pai “rightly identified the magnitude of the Chinese telecom contamination, and the FCC is taking strong steps towards eliminating it.” Last year, Cotton and Senate Minority Leader Chuck Schumer, D-N.Y., urged the FCC to open a proceeding to review the certifications for China Telecom and China Unicom (see 1909160054).
Communications networks “must be of high integrity and dependability, and must in no way compromise U.S. interests,” said Peter Rysavy, president of Rysavy Research, which specializes in wireless technology. “These networks must therefore consist of trusted operators and trusted vendors and should not be controlled or influenced by actors whose interests do not align with those of the United States,” he said.