On Wednesday, the Federal Communications Commission (FCC) announced the adoption of an order terminating Chinese state-owned China Telecom’s authority to provide domestic interstate and international telecommunications services within the United States.
This represents the latest action taken by the FCC against Chinese-related telecommunication entities. Previously, the agency labelled five telecom providers a national security threat, a decision that was upheld by the Fifth Circuit Court of Appeals as to petitioner Huawei Technologies Company and its American subsidiary in June.
The decision comes after much deliberation, including an FCC-initiated investigation in late 2020 that set forth a process allowing for China Telecom Americas, executive agencies, and the public to present any additional arguments or evidence as to whether the company should be allowed to retain its telecommunications presence in the U.S. “Today, based on the totality of the extensive unclassified record alone, the Commission’s public interest analysis finds that the present and future public interest, convenience, and necessity is no longer served by China Telecom Americas’ retention of its section 214 authority,” the press release said.
The order makes six key findings, including that the company, as the corporate child of a Chinese state-controlled parent, is “subject to exploitation, influence, and control by the Chinese government.” It explained that the company would likely be forced to comply with Chinese requests without sufficient legal safeguards. The order also cited the likelihood that China could use the company to engage in espionage or other activities harmful to the national interest “given the changed national security environment with respect to China,” since the company began providing services in the country almost two decades ago.
The FCC also pointed to the company’s lack of “candor, trustworthiness, and reliability,” with governmental agencies and violations of agreements with certain agencies. Further mitigation would not meaningfully address the significant national security and law enforcement risks posed by China Telecom Americas’ continued operation, the order said.