FCC revokes authorization from China Telecom’s US unit

WASHINGTON, Oct.26 (Reuters) – The United States Federal Communications Commission (FCC) on Tuesday voted to revoke the authorization of the US subsidiary of China Telecom (0728.HK) to operate in the United States, citing problems national security.

The ruling means China Telecom Americas must now shut down US services within 60 days. China Telecom, China’s largest telecommunications company, has been licensed to provide telecommunications services for nearly 20 years in the United States.

The FCC found that China Telecom “is subject to the operation, influence and control of the Chinese government and is very likely to be forced to comply with Chinese government demands without sufficient legal procedures subject to judicial oversight.” independent ”.

The US regulator added that Chinese government ownership and control “raises significant national security and law enforcement risks by providing opportunities” for the Chinese company and government “to access, store , disrupt and / or route American communications ”.

“The FCC’s decision is disappointing. We plan to pursue all available options while continuing to serve our customers,” a spokesperson for China Telecoms America told Reuters.

China Telecom served more than 335 million subscribers globally in 2019 and claims to be the world’s largest fixed and broadband operator, according to a Senate report, and also provides services to Chinese government facilities in the states. -United.

The US government said in April 2020 that China Telecom is targeting its mobile virtual network for more than 4 million Chinese Americans; 2 million Chinese tourists per year visiting the United States; 300,000 Chinese students in American colleges; and the more than 1,500 Chinese companies in America.

In April 2020, the FCC warned it could shut down the US operations of three state-controlled Chinese telecommunications companies, citing national security risks including China Telecom Americas as well as China Unicom Americas (0762.HK ), Pacific Networks Corp and its wholly owned subsidiary ComNet (USA) LLC after US agencies raised national security concerns.

FCC Commissioner Brendan Carr, a Republican, said the FCC “must remain vigilant in the face of threats” from China. The Chinese Embassy in Washington did not respond to a request for comment.

U.S. Senators Rob Portman and Tom Carper, who released a report in 2020 on the operations of Chinese telecommunications companies in the United States, welcomed the FCC’s decision in a joint statement that cited “substantial and serious risks to the national security and law enforcement “.

In March, the FCC began revoking the authorization granted to China Unicom Americas, Pacific Networks and its wholly-owned subsidiary ComNet to provide telecommunications services in the United States.

In May 2019, the FCC unanimously voted to deny another Chinese state-owned telecommunications company, China Mobile (0941.HK), the right to provide U.S. services.

The FCC has taken further action against Chinese telecoms and other companies.

Last year, the FCC appointed Huawei Technologies Co [RIC:RIC:HWT.UL] and ZTE Corp (000063.SZ), as a national security threat to communications networks – a statement prohibiting U.S. companies from tapping into an $ 8.3 billion government fund to buy equipment from businesses. The FCC passed rules in December requiring operators with ZTE or Huawei equipment to “tear and replace” that equipment.

In March, the FCC designated five Chinese companies as posing a threat to national security under a 2019 law, including Huawei, ZTE, Hytera Communications (002583.SZ), Hangzhou Hikvision Digital Technology Co (002415.SZ) and Zhejiang Dahua Technology Co (002236.SZ).

Reporting by David Shepardson, editing by Franklin Paul, Mark Porter, Emelia Sithole-Matarise and David Gregorio

Our standards: Thomson Reuters Trust Principles.

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