FCC Scrutinizes Four Chinese Controlled Carriers Over Security Concerns


The FCC Friday issued Orders to Show Cause against four entities that are subject to the ownership and control of the Chinese government: China Telecom Americas, China Unicom Americas, Pacific Networks, and ComNet. The orders direct the companies to explain why the Commission should not start the process of revoking their domestic and international section authorizations enabling them to operate in the United States. 

The action builds on the FCC’s 2019 rejection on national security and law enforcement grounds of China Mobile USA’s application to provide international telecommunications services between the United States and foreign countries.

“Foreign entities providing telecommunications services—or seeking to provide services—in the United States must not pose a risk to our national security,” said Chairman Ajit Pai. “The Show Cause Orders reflect our deep concern—one shared by the U.S. Departments of Commerce, Defense, Homeland Security, Justice, and State and the U.S. Trade Representative—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.”  

The orders give the companies the chance to demonstrate they are not subject to the influence and control of the Chinese government. The telecoms will also have an opportunity to demonstrate they are still qualified to hold domestic and international section 214 authorizations and International Signaling Point Codes, and that public is served by their retention of the authorizations and spectrum assignments. The entities have 30 days to respond.

Commissioner Geoffrey Starks supported the decision, noting that due to the pandemic, historic amounts of traffic now cross communications networks. “With such an unprecedented increase in data traffic, we’ve never had a greater need to ensure the security of these communications. That’s why we must pay even greater attention to whom we permit to interconnect with American communications networks.”

Last year, Starks voted to deny a Chinese carrier’s application to operate in the United States based on concerns that allowing the company to interconnect with American networks would harm our national security. He said the authorizations at issue now raise similar apprehensions.

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