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FCC: China covered up COVID-19, so we'll ban Chinese telcosFCC: China covered up COVID-19, so we'll ban Chinese telcos

Blaming China for the spread of the deadly virus, US authorities are moving to ban Chinese service providers from the US market.

Iain Morris

April 27, 2020

4 Min Read
FCC: China covered up COVID-19, so we'll ban Chinese telcos

In the latest sign of a growing international backlash against China, US authorities have said China's initial efforts to cover up the outbreak of COVID-19 would justify a US ban on Chinese operators with suspected links to the communist regime.

The Federal Communications Commission has threatened to ban four Chinese service providers – China Telecom Americas, China Unicom Americas, Pacific Networks and ComNet – unless they are able to convince it otherwise. Each operator has been given 30 days to respond to so-called "Show Cause Orders" issued on April 24.

A strongly worded statement by FCC Commissioner Brendan Carr says the operators will have to provide evidence to show "they are not subject to the exploitation, influence and control of the Chinese government."

The move has been linked by the FCC directly to China's alleged suppression of news about COVID-19 and "disappearance of hero doctors and citizen journalists," rather than any telecom abuses by the four Chinese operators.

That could set a dangerous new precedent in the trade war between China and the US, which has previously blocked Chinese firms including equipment makers Huawei and ZTE on grounds of national security or because they were charged with violating trade sanctions or stealing intellectual property.

"Since communist China is willing to disappear its own people to advance the regime's geopolitical agenda, it is appropriate for the FCC to closely scrutinize telecom carriers with ties to that regime," said Carr in his statement.

Major US service providers have been warned off building networks with Huawei and ZTE ever since a US government report in 2012 identified the Chinese vendors as a threat to national security.

The apparent concern is that China's government could introduce malware into products developed by the Chinese vendors and use this for spying or even sabotage.

But in the case of the four operators, any ties to a regime that is accused of a COVID-19 cover-up amount to a security threat, according to the FCC statement. "This is a prudent step to ensure the security of America's telecom networks," says the FCC about its latest move.

It follows a recent US government recommendation to ban China Telecom on the grounds that it deliberately diverted US network traffic to China on multiple occasions between 2015 and 2019.

That recommendation, under Section 214 of the US Communications Act, would seem to affect China Telecom's investments in the TPE and forthcoming HKA trans-Pacific cables, as well as CTExcel, a US mobile virtual network operator catering mainly to Chinese tourists and Chinese-Americans.

It would not, however, have stopped China Telecom from operating about 20 colocation facilities in the US or providing public and private cloud services.

Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.

The FCC has already taken steps against China Mobile, the largest of China's three national service providers, voting in May 2019 to ban it from providing telecom services in the US market.

That ban was implemented on grounds that China Mobile poses "substantial national security and law enforcement risks," with FCC officials arguing that China would potentially be able to access and disrupt US network traffic if China Mobile were allowed to build interconnection facilities in the US.

Hostility toward China is growing in the US, which has recorded a higher number of COVID-19 deaths and infections than any other country, and US authorities have argued that China's clampdown on reports about the deadly virus worsened its spread.

"Americans are now experiencing the consequences of those oppressive actions in their own lives – whether in the loss of their jobs or their kids not being able to attend school due to COVID-19," said Carr.

China faces a growing backlash in other parts of the world, too. Officials at the European Union say national governments should build stakes in critical European firms to ensure they are not vulnerable to a hostile takeover by Chinese companies. Australia and India are assessing rules on foreign direct investment that could be used to block Chinese takeovers.

In the UK, politicians opposed to China have reiterated their calls for a total ban on Huawei and ZTE after the government recently decided on restrictions rather than a total exclusion.

Tom Tugendhat, a member of the ruling Conservative Party who chairs the UK's Foreign Affairs Committee, has argued that China is trying to exploit the disarray caused by the coronavirus pandemic for geopolitical and economic gains.

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— Iain Morris, International Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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