Several federal agencies told the FCC because of past offenses and potential national security threats, it should revoke China Telecom’s common carrier licenses. China Telecom is owned by the Chinese government, and does business in the U.S. in part as a reseller of mobile services to people and institutions with ties to China.
The Department of Justice led the review of China Telecom’s authorizations, which also included the Department of Defense and the Department of Homeland Security. It based the recommendation on developments since the authorizations were last transferred in 2007, including China Telecom’s failure to comply with the terms of an existing agreement with the DOJ. In its recommendation, the Executive Branch agencies identified what they said were substantial and unacceptable national security and law enforcement risks associated with China Telecom’s operations. They said those render the FCC authorizations inconsistent with the public interest.
More specifically the recommendation was based on:
- the evolving national security environment since 2007, and increased knowledge of the PRC’s role in malicious cyber activity targeting the United States;
- concerns that China Telecom is vulnerable to exploitation, influence, and control by the PRC government;
- inaccurate statements by China Telecom to U.S. government authorities about where China Telecom stored its U.S. records, raising questions about who has access to those records;
- inaccurate public representations by China Telecom concerning its cybersecurity practices, which raise questions about China Telecom’s compliance with federal and state cybersecurity and privacy laws; and
- the nature of China Telecom’s U.S. operations, which provide opportunities for PRC state-actors to engage in malicious cyber activity enabling economic espionage and disruption and misrouting of U.S. communications.
FCC Commissioner Brendan Carr backed the recommendation and said he looks forward to working with his colleagues to carry it out and “and further secure America’s networks from bad actors that would do us harm.” Carr encouraged the national security agencies to examine China Telecom last year.
He said it’s time to reconsider America’s relationship with companies owned or controlled by the People’s Republic of China. “Years ago, the FCC authorized China Telecom to connect their facilities to networks here in the U.S. A lot has changed since that authorization, though it continues to allow China Telecom to carry network traffic that originates in the U.S.”
“There is substantial evidence that the Chinese government intends to surveil persons within our borders, either for economic or intelligence advantages,” said Carr. He added there’s also evidence that China Telecom hijacked telecom traffic in the U.S. and routed it through China before delivering it to destinations back here.
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