FCC revokes authorization of China Telecom’s U.S. unit
28 October, 2021, 8:10 am
The U.S. Federal Communications Commission (FCC) on Tuesday voted to revoke the authorization for China Telecom’s (0728.HK) U.S. subsidiary to operate in the United States, citing national security concerns.
The decision means China Telecom Americas must now discontinue U.S. services within 60 days. China Telecom, the largest Chinese telecommunications company, has had authorization to provide telecommunications services for nearly 20 years in the United States.
The U.S. regulator added that Chinese government ownership and control “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.”
China Telecom served more than 335 million subscribers worldwide as of 2019 and claims to be the largest fixed line and broadband operator in the world, according to a Senate report, and also provides services to Chinese government facilities in the United States
In April, 2020, the FCC warned it might shut down U.S. operations of three state-controlled Chinese telecommunications companies, citing national security risks, including China Telecom Americas as well as China Unicom Americas (0762.HK), Pacific Networks Corp and its wholly owned subsidiary ComNet (USA) LLC after U.S. agencies raised national security concerns.
U.S. Senators Rob Portman and Tom Carper, who issued a report in 2020 on Chinese telecom companies U.S. operations, praised the FCC decision in a joint statement that cited “substantial and serious national security and law enforcement risks.”
In May 2019, the FCC voted unanimously to deny another state-owned Chinese telecommunications company, China Mobile (0941.HK), the right to provide U.S. services.
Last year, the FCC designated Huawei Technologies Co [RIC:RIC:HWT.UL] and ZTE Corp (000063.SZ), as national security threats to communications networks – a declaration that barred U.S. firms from tapping an $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.