US bans China Telecom Americas over national security risks

The Federal Communications Commission (FCC) has revoked China Telecom Americas' license to provide telecommunication services within the United States.

China Telecom Americas is the largest foreign subsidiary of China Telecom Corporation, China's state-owned telecom company. It provides services in over 100 countries to over 135 million broadband subscribers and more than 255 million mobile subscribers.

The order, issued on Tuesday, instructs the Chinese telecom provider to discontinue its services in the U.S. within sixty days.

"Our decision today is informed by the views submitted by the Executive Branch agencies with responsibility for national security reviews," said FCC Commissioner Brendan Carr.

"Indeed, the FCC's own review found that China Telecom Americas poses significant national security concerns due to its control and ownership by the Chinese government, including its susceptibility to complying with communist China's intelligence and cybersecurity laws that are contrary to the interests of the United States."

Today, the FCC voted to revoke China Telecom America’s Section 214 authority to operate in the U.S. based on national security risks.

Another important step towards addressing the threats posed by Communist China and those that would do its bidding. pic.twitter.com/qDIoIitL0t

— Brendan Carr (@BrendanCarrFCC) October 26, 2021

Ban follows Executive Branch agencies' recommendation

The decision was taken after six U.S. Executive Branch agencies (the Departments of Justice, Homeland Security, Defense, State, Commerce, and the United States Trade Representative) asked the FCC to ban China Telecom Americas in April 2020 from operating in the U.S. over significant cybersecurity risks.

The U.S. agencies said at the time that China Telecom's U.S. operations provide an opening for Chinese state-backed threat actors to engage in espionage which would allow them to steal trade secrets and other confidential business info, as well as to disrupt and misroute U.S. communications traffic via BGP hijacking [1, 2].

Last year, the U.S. President also established an interagency committee by Executive Order to advise the FCC "on national security and law enforcement concerns related to certain license applications by companies under foreign ownership or control."

Months earlier, in September 2019, U.S. Senators Tom Cotton and Charles Schumer also urged the FCC to review the approvals of China Telecom and China Unicom that granted them the right to operate in the United States.

Chinese telecoms under the spotlight

This is not the first Chinese-backed telecom security threat to the U.S. national security that made the news in recent years.

In February 2020, Huawei and two of its U.S. subsidiaries were charged by the U.S. Department of Justice with conspiracy to steal trade secrets and violate the Racketeer Influenced and Corrupt Organizations Act (RICO).

According to the DOJ, the Chinese companies obtained nonpublic intellectual property, which significantly decreased research and development costs, gaining an unfair competitive advantage against U.S. telecom equipment manufacturers.

One year earlier, in May 2019, the FCC blocked China Mobile, another Chinese telecom giant, from providing international telecom services over U.S. networks.