FCC issues showcause notices to 3 state-controlled Chinese telecom firms

In a statement, the Federal Communications Commission (FCC) stated, it is mulling options which include the shutting down the U.S. operations of three state-controlled Chinese telecommunications companies, due to potential national security risks.

To this end, the FCC has issued show cause orders to China Unicom Americas, China Telecom Americas, and Pacific Networks Corp along with its wholly owned subsidiary ComNet (USA) LLC, directing them to explain why it should not start the process of revoking authorizations enabling their U.S. operations.

“We simply cannot take a risk and hope for the best when it comes to the security of our networks,” said FCC Chairman Ajit Pai in a statement.

The FCC had granted approvals to these firms more than a decade ago. Since then, it said, “the national security and law enforcement risks linked to the Chinese government’s activities have grown significantly.”

The FCC’s show cause orders referred to the “sophistication and resulting damage of the Chinese government’s involvement in computer intrusions and attacks against the United States”; it did not elaborate any further.

Earlier this month, the Justice Department along with other federal agencies had called on the FCC to revoke China Telecom’s ability to operate in the United States.

In May 2019, the FCC had voted unanimously to deny state-owned Chinese telecommunications company, China Mobile Ltd, the right to provide services in the United States, citing national security risks, including that the Chinese government could use the approval to conduct espionage against the U.S. government and U.S. companies.

China Telecom Americas is the U.S. subsidiary of a Chinese state-owned telecommunications company.

A spokesman for China Telecom said on Friday the company “has been operating in good standing in the United States for nearly 20 years. We look forward, in the coming weeks, to sharing information with the FCC that speaks to our role as a responsible telecom company.”

China Unicom Americas, China Telecom Americas, and Pacific Networks Corp did not respond to requests for comments.

Republican Senator Tom Cotton, had praised the review saying the firms’ “operation in the United States will continue to pose a threat to our critical networks as long as it continues.”

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