Executive agencies recommend FCC strip China Telecom of authorizations

by Chris Mills Rodrigo - 04/09/20 4:36 PM ET

Multiple Cabinet-level federal agencies on Thursday recommended that the Federal Communications Commission (FCC) revoke authorizations for China Telecom, a state-owned company, to operate services to and from the U.S.

The departments of Justice, Homeland Security, Defense, State and Commerce identified national security and enforcement risks with the company’s activities that they claim make the “FCC authorizations inconsistent with the public interest.”

According to the agencies, China Telecom made inaccurate statements about where it stored its U.S. records, misrepresented its cybersecurity practices and is vulnerable to control by the Chinese Communist Party.

“Today, more than ever, the life of the nation and its people runs on our telecommunications networks,” John Demers, assistant attorney general for National Security, said in a statement.

“The security of our government and professional communications, as well as of our most private data, depends on our use of trusted partners from nations that share our values and our aspirations for humanity,” he added.

A spokesperson for China Telecom denied the allegations.

“The company has always been extremely cooperative and transparent with regulators,” they said in a statement to The Hill.

“In many instances, we have gone beyond what has been requested to demonstrate how our business operates and serves our customers following the highest international standards. We look forward to sharing additional details to support our position and addressing any concerns.”

The pressure on the FCC to revoke China Telecom’s authorizations comes amid broader scrutiny of Chinese telecommunications companies operating in the U.S.

Both Huawei and ZTE have been designated as national security threats.

Many of the elevated concerns about the Chinese companies comes from a 2017 intelligence law that requires companies and citizens to assist in state intelligence work if requested, including sharing data and information.

Last month, President Trump signed legislation banning the use of federal funds to purchase equipment from telecom companies deemed a national security threat and requiring the FCC to establish a $1 billion fund to help small telecom groups remove existing equipment that is deemed to be a threat.

—Updated Friday at 9:58 a.m.