Several US agencies, including the Departments of Justice, Homeland Security, Defense, State and Commerce, today asked the FCC to revoke and terminate China Telecom's "authorizations to provide international telecommunications services to and from the United States."
China Telecom is a Tier 1 carrier and has points of presence in several major US cities, connecting businesses to Asia and all over the world. The recommendation made to the FCC would strip the carrier of its ability to operate as a "common carrier" in the US, crippling its business here and disrupting US enterprise and carrier customers that depend on it for wholesale connectivity and other services.
China Telecom first opened offices in the US in 2000, received its first license from the FCC in 2002 and boasts that it was "the first Chinese telecommunications provider to enter the US market." The company's massive CN2 IP network, launched in 2006, is built on core routing and switching gear from Cisco and Juniper.
The agencies said in a press release that since China Telecom is owned by the People’s Republic of China (PRC), having it operate in any way with US networks is too big a security risk. The group maintains that "China Telecom is vulnerable to exploitation, influence, and control by the PRC government."
The group of agencies also alleges that China Telecom lied about where it stores US records and who can access those records.
The final reason listed was that having China Telecom working in the US would provide "opportunities for PRC state-actors to engage in malicious cyber activity enabling economic espionage and disruption and misrouting of US communications."
The prompt for this action was an executive order signed by President Trump on April 4 that created a committee to "assist the FCC in its public interest review of national security and law enforcement concerns that may be raised by foreign participation in the United States telecommunications services sector."
China Telecom replied with the following statement sent via email to Light Reading: "Today, several government agencies took the procedurally unprecedented step of making allegations related to China Telecom Americas' FCC licensing. We unequivocally deny the allegations. The company has always been extremely cooperative and transparent with regulators. In many instances, we have gone beyond what has been requested to demonstrate how our business operates and serves our customers following the highest international standards. We look forward to sharing additional details to support our position and addressing any concerns."
— Phil Harvey, Editor-in-Chief, Light Reading