US threatens to block China Telecom from American market

A group of US security agencies is urging the Federal Communications Commission to revoke China Telecom’s permission to operate in the United States.

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

The US and China are at odds over a suite of issues such as the spread of the novel coronavirus, trade, and security of telecommunications networks.

US officials have moved to bar Chinese gear maker Huawei Technologies as a security threat, an assertion the company denies.

Thursday’s recommendation to revoke an authorisation held by China Telecom since 2007 is part of a review announced last year by the FCC, as the agency barred China Mobile from the US market.

The FCC usually follows recommendations from security agencies.

“The threat from China Telecom is a reflection of the threat that we see from Chinese telecommunications companies generally,” said John Demers, assistant attorney-general for national security.

“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 licence was approved,” Demers said.

“That raises national security concerns.”

Agencies taking part in Thursday’s filing include the Departments of Justice, Homeland Security, Defence, State, Commerce and the US Trade Representative.

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

The Chinese government has “ultimate ownership and control” of China Telecom, and the company’s US operations “provide opportunities for increased Chinese government-sponsored economic espionage,” according to the filing.

The company made inaccurate statements about where its records were stored, and had “inadequate” cyber-security and privacy practices, the agencies said in the filing.

– Bloomberg