The Federal Communications Commission (FCC) has moved forward on a recommendation made during the previous administration and has revoked China Telecom Americas’ authority to operate telecommunications services in the United States.
China Telecom Americas, headquartered in Virginia, has provided mobile and international telecom services targeting Chinese Americans, visitors from China, and businesses that rely on cross-border communications.
In April of last year, the U.S. Department of Justice recommended that the FCC terminate China Telecom Americas’ authorizations to provide international telecommunications services to and from the United States, noting that the company is the U.S. subsidiary of a state-owned enterprise of the People’s Republic of China.
“Today, more than ever, the life of the nation and its people runs on our telecommunications networks,” said then-Assistant Attorney General for National Security John C. Demers. “The security of our government and professional communications, as well as of our most private data, depends on our use of trusted partners from nations that share our values and our aspirations for humanity.”
In its announcement, the FCC stated it has terminated China Telecom Americas’ license and has ordered the company to cease providing covered services within 60 days.
The commission explained its decision by citing risks tied to the company’s ownership and control. “China Telecom Americas, a U.S. subsidiary of a Chinese state-owned enterprise, 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,” the FCC said.
The agency added that such ownership raises “significant national security and law enforcement risks” because it could enable China Telecom Americas, its parent entities, or the Chinese government to access, store, disrupt, or misroute U.S. communications. The FCC warned these capabilities could be used for espionage or other harmful activities against the United States.
The FCC also said China Telecom Americas had several opportunities to address these concerns but “failed to rebut the serious concerns” raised by regulators and national security officials.
FCC Chairwoman Jessica Rosenworcel commented on the ruling, stressing the balance between open markets and national security:
“The Federal Communications Commission has a long history of working to open American markets to foreign telecommunications companies when doing so is in the public interest. These connections can make us stronger because they help share our democratic values with the rest of the world.
But we also recognize not every connection is consistent with the national security interest of the United States. That’s because some countries may seek to exploit our openness to advance their own national interests.
When we recognize this is the case and cannot mitigate the risk, we need to take action to protect the communications infrastructure that is so critical to our national security and economic prosperity.”
This regulatory action follows earlier financial market moves: in January, the New York Stock Exchange removed listings for China Telecom as well as China Mobile and China Unicom, citing related concerns.
Photo credit: Issy Bailey on Unsplash
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