China Telecom cannot operate in the US, as FCC withdraws permission to provide telecom services
The Federal Communications Commission (FCC) revoked and terminated this week on security grounds China Telecom (Americas) Corporation’s ability to provide domestic interstate and international telecommunications services within the U.S., in an order. The federal agency based its revocation decision on the totality of the extensive unclassified record alone, and its public interest analysis finds that the present and future public interest, convenience, and necessity are no longer served by China Telecom’s retention of its section 214 authority.
“The Order on Revocation and Termination directs China Telecom Americas to discontinue any domestic or international services that it provides pursuant to its section 214 authority within sixty days following the release of the order,” the FCC said. Promoting national security is an integral part of the Commission’s responsibility to advance the public interest, and today’s action carries out that mission to safeguard the nation’s telecommunications infrastructure from potential security threats, it added.
The federal agency based its revocation decision on the totality of the extensive unclassified record alone, and its public interest analysis finds that the present and future public interest, convenience, and necessity are no longer served by China Telecom’s retention of its section 214 authority.
The FCC order found that 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.
Considering the altered national security environment with respect to China since the FCC authorized China Telecom to provide telecommunications services in the U.S. almost two decades ago, the present order finds that China Telecom Americas’ “ownership and control by the Chinese government raise significant national security and law enforcement risks by providing opportunities for China Telecom Americas, its parent entities, and the Chinese government to access, store, disrupt, and/or misroute U.S. communications, which in turn allow them to engage in espionage and other harmful activities against the United States”, it added.
The FCC also pointed out that China Telecom Americas’ conduct and representations to the Commission and other U.S. government agencies demonstrate a lack of candor, trustworthiness, and reliability that erodes the baseline level of trust that the Commission and other U.S. government agencies require of telecommunications carriers given the critical nature of the provision of telecommunications service in the U.S. The order also added that further mitigation would not address these significant national security and law enforcement concerns.
The FCC order also observed that China Telecom Americas willfully violated two of the five provisions of the 2007 Letter of Assurances with the executive branch agencies, compliance with which is an express condition of its international section 214 authorizations.
The executive branch agencies made up of the U.S. Departments of Justice, Homeland Security, Defense, State, Commerce, and the United States Trade Representative had in April last year recommended that the FCC revoke and terminate China Telecom’s authorizations to provide international telecommunications services in the U.S.
The recommendation at the time 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, and 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.
The executive branch agencies also stated that inaccurate public representations by China Telecom concerning its cybersecurity practices, and the nature of the Chinese company’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 were grounds for recommending the revoking and terminating China Telecom’s authorizations.
Although it is not necessary to support these findings and conclusions, the FCC order finds that the classified evidence submitted by the executive branch agencies further supports the decisions to revoke the domestic authority and revoke and terminate the international authorizations issued to China Telecom Americas, and the determination that further mitigation will not address the substantial national security and law enforcement risks, the order stated.
About the same time as the executive branch agencies made their recommendations, the Senate Permanent Subcommittee on Investigations also issued a report on the threats that Chinese state-owned carriers pose to U.S. telecommunications networks, Jessica Rosenworcel, FCC Chairwoman, wrote in her statement. “In doing so, they highlighted a problem—that across the federal government there has not been enough oversight to safeguard our networks against evolving threats after issuance of a license,” she added.
There have also been concerns raised in a FERC complaint filed by Michael Mabee, a private citizen who conducts public interest research on the security of the electric grid, which called for the issuance of an appropriate order to the Electric Reliability Organization (ERO) to strengthen the security of the bulk power systems. Mabee also said that U.S. entities in the bulk power systems and the electric grid, are buying critical equipment from China to install into the U.S critical electric infrastructure that the regime’s state-sponsored and state-supported hackers are already probing and attacking.
Earlier this year, the FCC’s Public Safety and Homeland Security Bureau released in March a list of communications equipment and services that have been deemed a threat to U.S. national security, consistent with requirements in the Secure and Trusted Communications Networks Act of 2019. The list included five Chinese companies that produce telecommunications equipment and services that have been found to pose an unacceptable risk to U.S. national security, or the security and safety of U.S. persons. Among the companies named were Hikvision, Huawei Technologies, ZTE, Hytera Communications, and Dahua Technology.
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