FCC Begins Process of Ending China Telecom’s U.S. Operations

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The FCC believes, based on national security concerns, it has enough evidence to revoke China Telecom’s ability to do business in the United States. Thursday, the Commission began a proceeding to revoke the company’s authority to provide domestic interstate and international telecommunications services under section 214 of the Communications Act.

In April 2020, several executive branch agencies recommended that the FCC revoke and terminate China Telecom Americas section 214 authority based on “substantial and unacceptable national security and law enforcement risks associated with [China Telecom Americas’] continued access to U.S. telecommunications infrastructure.”

China Telecom Americas is indirectly and ultimately owned and controlled by the government of the People’s Republic of China, according to the Commission. 

The corporate governance documents of China Telecom Americas’ parent company give the Chinese Communist Party substantial control over its management and business operations, says the FCC and other U.S. government agencies. The company  has reportedly made inaccurate statements to U.S. authorities about its record storage policies and failed to provide adequate notice to executive branch agencies of applications it filed with the FCC. That’s a requirement of a deal it signed with the federal government when it received Commission approval to transfer control of its authorizations in 2007.

During the vote, FCC Chairman Ajit Pai said in 2018, the parent company gave the Chinese Communist Party greater control over the telecom. There are “troubling indications” the company has not lived up to its promises with the U.S. government, he said. The agency is “compelled to act to protect our communications networks, while ensuring China Telecom is offered a full, fair opportunity to defend itself.”   

The Commission in April issued an Order requiring China Telecom Americas to show why the Commission should not start a process for revoking and terminating its domestic and international section authorizations. The company failed to “provide a satisfactory response,” according to the FCC, so the Commission on Thursday began the formal revocation proceeding. The proceeding will also consider whether the company complied with its 2007 letter of assurances to the Department of Justice—including the FBI—and Department of Homeland Security.

On the same day, China Telecom Americas announced it’s been accepted into the Mutually Agreed Norms for Routing Security (MANRS). By joining MANRS, “China Telecom joins a global community of security-minded organizations committed to making the global routing infrastructure more robust and secure,” it states in the release. It calls MANRS “a global initiative, supported by the Internet Society, that provides crucial fixes to reduce the most common routing threats.”

“Even though internally it is always clear to us that we are committed to providing the most secure and reliable networks for our customers, joining MANRS is an unequivocal demonstration to the outside world of that commitment,” said company president Xu Tan.

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