Telecom

The U.S. to Look into Chinese Telcos’ Data Risks

  • Reading time: 3 min
data, risks, data risks, U.S., China, FCC,

The FCC is investigating the data risks posed by three Chinese telecom companies.

  • The telecom regulators are looking into China Mobile, China Telecom, and China Unicom.
  • The FCC has already stopped them from offering certain services.

The U.S. is investigating three Chinese telecom companies over Beijing accessing American data risks, further asserting its dominance over Chinese businesses on its soil.

In the Sino-American tech war, the U.S. is not only placing restrictions on its companies’ business with China, but also it’s keeping a watchful eye on Chinese companies operating on its soil. The government’s biggest worries have to do with the Chinese government accessing American data through Chinese companies.

China’s National Intelligence Law includes Article 7, which forces Chinese citizens and organizations to cooperate with intelligence work. This provision triggered governmental entities to consider all Chinese citizens and businesses as possible espionage risks, especially when it comes to data.

This paranoia, justified or not, has led to placing Chinese companies under intense scrutiny.

Not even Telecom Is Spared

The U.S. Federal Communications Commission (FCC) denied China Mobile’s, China Telecom’s, and China Unicom’s licenses to provide telephone services in 2019, 2021, and 2022, respectively. Then last April, the FCC ordered all three Chinese telcos to stop offering broadband services.

All three Chinese telcos had a small presence, providing cloud services and routing wholesale U.S. internet traffic. So, despite the FCC’s best efforts, they still had access to data, putting Americans at risk of espionage.

Now, the Biden administration is investigating them again because the White House is worried that they might place American data at risk. People close to the matter spoke anonymously with Reuters, as the probe is not public. They shared that the Commerce Department is further ahead in its China Unicom probe than the two others.

When Reuters investigated the matter, the team did not find evidence of data risks or any wrongdoing on the telcos’ part.

What to Do? What to Do?

Regulators are on the fence about how to deal with the potential security threats and data risks. According to the sources, they could block all three Chinese telecom companies from operating in data centers and routing data for internet providers. However, they do not see that this road might lead to all three leaving the U.S., as it will impact their ability to remain competitive.

It feels like every week, the U.S. makes headlines for something that has to do with China. In the name of mitigating data risks, they have sanctioned the country. They have restricted what American companies can trade with it. They are banning a viral app just because its parent company is Chinese. They are extremely limiting what Chinese companies can do on U.S. soil.

They almost did everything short of banning all things Chinese.

Hold on. There’s an idea. Why NOT ban all things Chinese and be done with it? Deal with all potential data risks once and for all.

POWER

Severing all ties with China, as understandable as it is given the paranoia over data, is complicated, involving economic, political, and strategic risks. But power plays an important part in this.

These regular investigations allow the U.S. government to assert its dominance and keep an eye on any Chinese company on its soil. This sends a clear message of a tiger ready to pounce the second that one of them is confirmed as a threat to national security or economic interests.

Besides, with how both economies are intertwined, if they were to cut ties, the economic ripple effect would affect all governments, even destroying some. The U.S. vigilance helps maintain its position as a global leader in business and trade, setting the standards for everyone else.

Final Thoughts

The back and forth between the two powerhouses is not ending anytime soon. The U.S. is too paranoid about data risks to let anything go, and rightfully so. And China is too communist to not use its companies on foreign land for intelligence. So, until one of them forfeits, will be seeing more probes into Chinese companies, telecom, and otherwise, courtesy of the U.S. government.

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