US Agencies In Favour Of Axing China Telecom US Licence

A group of US federal agencies is urging the US Federal Communications Commission (FCC) to revoke the ability of China Telecom to operate in America.

China Telecom (Americas) Corp is the US subsidiary of its parent China Telecom Corp, which is the second-largest mobile provider in China, with 336 million subscribers.

But US officials cited ‘substantial and unacceptable national security and law enforcement risks associated with China Telecom’s operations‘, which is reportedly owned by the Chinese state.

FCC filing

The recommendation to revoke the licence of China Telecom to operate in the US, which it has held since 2007, came in a filing to the FCC on Thursday.

The agencies that backed the revoking of the China Telecom licence include the Department of Justice, Department for Homeland Security, Defense Department, State Department, Commerce and the US Trade Representative Department.

“This recommendation reflects the substantial and unacceptable national security and law enforcement risks” associated with China Telecom’s access to the U.S. telecommunications network, the agencies said in a filing.

It should be noted that the FCC usually follows recommendations from security agencies.

Chinese firms such as Huawei and ZTE have already been blacklisted in the US (although ZTE has subsequentally been allowed to do some business in the US).

The FCC last year revoked China Mobile licence last year, removing its ability to operate in the US market.

Carrier denial

China Telecom meanwhile “unequivocally” denies the allegations, a representative said in an email, reported by Bloomberg.

“The company has always been extremely cooperative and transparent with regulators,” the representative, Ge Yu was quoted as saying. “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 welcome the input of the executive branch agencies and will review it carefully, Tina Pelkey, an FCC spokeswoman was quoted as saying by Bloomberg.

Chinese threat?

“The threat from China Telecom is a reflection of the threat that we see from Chinese telecommunications companies generally,” John Demers, assistant attorney general for national security was quoted as saying. “They are beholden to the government of China both by law and in fact to do its bidding.”

“We have seen behaviour in violation of the mitigation agreement that we had entered into with China Telecom at the time that the license was approved,” Demers said. “That raises national security concerns.”

It is reported that China Telecom offers US customers access to international private lines, which it markets as providing secure bandwidth for sensitive data. It also provides a mobile service under the CTExcel brand name.

The FCC filing also alleged that China Telecom made inaccurate statements about where its records were stored, and had “inadequate”cybersecurity and privacy practices.

Last September a number of US Senators raised concerns that China Telecom and China Unicom had access to US telephone lines, fibre optic cables, and cellular networks and satellites.

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