The US government has recommended that the FCC revoke licences allowing China Telecom to provide international telecommunications services to and from the US. The Department of Justice said it found increased security risks since the authorisations were last renewed in 2007.
The recommendation follows input from the Departments of Justice, Homeland Security, Defense, State and Commerce, and the US Trade Representative, which operate the recently formalised 'Team Telecom' to assess foreign interests in the sector. They pointed to increased intelligence over China's role in cyber-attacks against the US and the vulnerability of Chinese companies to government control and influence. They also claim Chin Telecom provided "inaccurate statements" to US authorities about where it stored its US records and misrepresented publicly its cybersecurity practices.
The statement said these issues "raise questions about China Telecom’s compliance with federal and state cybersecurity and privacy laws" and the nature of China Telecom’s US operations, which could provide opportunities for Chinese state actors to engage in malicious cyber activity such as economic espionage or misrouting US communications.
The FCC took a similar step against China Mobile last year. The latest move follows a campaign by the Trump administration in the past year to exclude Chinese companies from the ICT sector due to security concerns. This included the ban on US businesses selling to Huawei, forbidding US government agencies and universal service carries from using equipment from Huawei or ZTE and most recently blocking the use of an international cable from the US to Hong Kong.
The Department of Justice said China Telecom had failed to meet the commitments provided in a Letter of Assurance agreed with its licence in 2007. As a result, the government agencies concluded the security risks in granting the company's licence could not be mitigated. It will be up to the FCC to take the final decision on the licence.
