The Federal Communication Commission (FCC) is eyeing up to three new Chinese telecoms companies for potential addition to the U.S.’ Communist Chinese military companies (CCMC) designation, the regulator announced on Wednesday.
The FCC launched proceedings to determine whether to end authorization, China Unicom Americas, Pacific Networks and its wholly owned subsidiary ComNet’s authority to provide domestic interstate and international telecommunications services within the United States under section 214 of the Communications Act.
“Promotion of national security is an integral part of the Commission’s public interest responsibility, and today’s action seeks to protect the nation’s telecommunications infrastructure from potential security threats,” the agency said.
Back in April last year, the FCC issued show-cause orders warning it might revoke the operating licenses of three state-controlled Chinese telecommunications companies — the three mentioned above — as well as China Telecom Corp Ltd, the country’s largest telecoms company.
It is worth mentioning that China Unicom Americas has a two-decade old authorization to provide the U.S. with international telecoms services.
According to the U.S. regulator, Pacific Networks and ComNet are indirectly and ultimately owned and controlled by the government of the People’s Republic of China. “The Commission has raised concerns regarding the vulnerability of subsidiaries of Chinese state-owned entities to the exploitation, influence, and control of the Chinese government,” it said in a statement.
FCC staff reviewed the companies’ responses as well as comments from U.S. Executive Branch agencies that identified several significant national security and law enforcement concerns.
“Today, the Commission determined that Pacific Networks and ComNet have failed at this stage to dispel serious concerns regarding their retention of section 214 authority in the United States,” the FCC said.
FCC Commissioner Geoffrey Starks noted many Chinese telecom carriers “also own data centers operating within the United States.” He said the FCC currently lacks authority to “address this potential national security threat.”
This is not the first time the regulator has chosen to take a hard line on Chinese telecoms operating on American soil. In May 2019, the FCC unanimously denied state-owned China Mobile the right to provide telecommunication services in the country, citing fears that the Chinese government would use the telcos’ operations for espionage.