FCC poised to revoke licences held by four more China-backed operators

28 Apr 2020

The Federal Communications Commission (FCC) has issued ‘Orders to Show Cause’ against four companies that it says are ultimately subject to the ownership and control of the Chinese government, namely: China Telecom Americas, China Unicom Americas, Pacific Networks and ComNet. The Orders direct the companies to explain why the FCC should not start the process of revoking their domestic and international section authorisations, which enable them to operate in the United States. The action builds on the FCC’s 2019 rejection of China Mobile USA’s application to provide international telecommunications services between the US and foreign destinations; that refusal was based on national security and law enforcement grounds.

FCC chairman Ajit Pai commented: ‘Foreign entities providing telecommunications services – or seeking to provide services – in the United States must not pose a risk to our national security. The Show Cause Orders reflect our deep concern – one shared by the US Departments of Commerce, Defense, Homeland Security, Justice, and State and the US 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.’

Note: Pacific Networks Corp, and its direct subsidiary ComNet, are owned by CITIC Telecom International Holdings, a company ultimately owned by the Chinese government via a series of holding companies and investment firms.