The Federal Communications Commission (FCC) April 24 issued Orders to Show Cause against China-based services providers China Telecom Americas, China Unicom Americas, Pacific Networks, and ComNet. The orders require that the companies provide responses within 30 days that would persuade the FCC not to begin the process of revoking the domestic and international section authorizations that enable them to operate in the U.S. The FCC drew a line between the orders and the commission’s rejection in 2019 of China Mobile USA’s application to provide international telecommunications services between the United States and other countries. Both the issuance of the orders and the rejection of China Mobile’s application are the result of the belief that these companies are subject to the ownership and control of the Chinese government and therefore their operation in the U.S. would pose a national security risk.
“Foreign entities providing telecommunications services—or seeking to provide services—in the United States must not pose a risk to our national security,” said Chairman Pai. “The Show Cause Orders reflect our deep concern—one shared by the U.S. Departments of Commerce, Defense, Homeland Security, Justice, and State and the U.S. 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.”
The four companies are thus directed to demonstrate that they are not subject to the influence and control of the Chinese government, that they continue to be qualified to hold domestic and international section 214 authorizations and International Signaling Point Codes, and that their possession of the authorizations in question serve “public convenience and necessity.” In addition, China Telecom must answer allegations raised in an Executive Branch Recommendation to Revoke their international section 214 authorization. The recommendation, filed by the National Telecommunications and Information Administration (NTIA) of the Department of Commerce on April 9, 2020, is based on increased concerns about “malicious cyber activities” by the Chinese government and China Telecom’s potential to be used for such activities as a state-owned service provider.
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