Chinese carriers protest innocence in response to FCC ‘show cause orders’
- The FCC wants Chinese carriers operating in the US to explain why they shouldn’t be kicked out due to links with the regime
- However, their pleas are unlikely to work any magic at this stage
- Just as Huawei’s protestations are unlikely to move the needle for its infrastructure role in the UK
A similar drama to that being played out in the UK around Huawei’s fitness to be a supplier to the UK’s mobile telecoms networks, has been unfolding in Washington. (See Love me do. Huawei makes public commitment to the British Public).
This week the US units of two Chinese carriers, China Telecom and China Unicom, have been defending their records in an attempt to convince the Federal Communications Commission (FCC) not to revoke their licenses to provide international services to and from the US.
In April, the US DoJ, Homeland Security, Defense, State and Commerce Departments referred the problem of Chinese carriers operating within the US to the FCC, asking it - as the licencing authority - to act to revoke the permissions, citing unacceptable national security and law enforcement risks.
So the FCC issued ‘show-cause orders’ and threatened to shut down the U.S. operations of three state-controlled Chinese telecommunications companies: China Telecom, China Unicom and Pacific Networks Corp and its subsidiary ComNet (USA). The FCC Chairman, Ajit Pai, spoke of deep concerns about the carriers’ vulnerability to the exploitation, influence, and control of the Chinese Communist Party.
The ‘Show Cause Orders’ meant the carriers had 30 days to explain why the FCC should NOT initiate proceedings to revoke their authority to operate in the U.S. The four carriers are China Telecom Americas, China Unicom Americas, Pacific Networks, and ComNet. Last year the other large Chinese operator, China Mobile, has already been blocked from entering the U.S. market.
The Chinese telcos have naturally argued that the US government’s claims were all unfounded; there was no evidence that might lead to any ‘lack of trust’ either. So therefore, they maintain that the FCC should not revoke their rights based on foreign policy concerns without any specific evidence of misconduct.
The companies also cited ‘positive’ reasons for the carriers’ continued presence in the US. According to China Unicom it has had a two-decade track record as a valuable contributor to US telecoms markets, a good record of compliance with its FCC regulatory obligations, and a demonstrated willingness to cooperate with U.S. law enforcement agencies.
Pacific and ComNet said neither company has been asked by anyone to take any action that would jeopardize the national security and law enforcement interests of the United States and China Telecom says that its 224 employees there, including 72 U.S. citizens, had always complied with U.S. law enforcement and national security inquiries. Not quite as impressive as Huawei’s £29 billion of "productive benefit" but a similar approach.
There’s no doubt the Chinese carriers face an uphill struggle - the claimed unblemished record and the hiring of 72 US citizens is unlikely to move FCC Commissioner Brendan Carr, the FCC cheerleader for the action against China, who said in a statement: “Last year, when we blocked China Mobile from entering the U.S. market based on national security concerns, I said it was time for a top to bottom review of every telecom carrier with ties to the communist regime in China. I am pleased with the progress we are making on that front, as evidenced by today’s Show Cause orders.”
But one does wonder how a substantial telecom carrier anywhere can NOT have ties to its own government or ‘regime’? Think about lobbying and political donations, lawful intercept arrangements, emergency communications and so on.
On this basis the FCC must also soon be training its beady eye on T-Mobile USA which has ties to the German government, it’s former 100 per cent owner. As of this year the German state actually retains (gasp!) a 14.5% stake in Deutsche Telekom company stock directly, and another 17.4% through the government bank KfW. Cause for concern?
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