FCC considers revoking operations of four Chinese state-controlled telecom firms in the US

The companies will need to prove in 30 days that they are not subject to Chinese government's influence

The Federal Communications Commission (FCC) is considering plans to stop operations of four Chinese state-controlled firms in the US.

The Commission said last week that it had issued show cause orders against China Unicom Americas, China Telecom Americas, ComNet and Pacific Networks, asking them to explain why their authorisations to operate in the US should not be revoked.

The Chinese firms have 30 days to prove that they are not subject to Chinese government's influence and control.

These companies will also need to demonstrate that they "qualify to hold domestic and international section 214 authorisations and International Signalling Point Codes."

The regulator has directed China Telecom to submit a detailed reply to accusation made in the Executive Branch Recommendation that its cyber security practices and other operations pose substantial risks to the national security of the United States.

"Foreign entities providing telecommunications services - or seeking to provide services - in the United States must not pose a risk to our national security," said FCC Chairman Ajit Pai.

According to Pai, the US Departments of State, Defense, Commerce, Homeland Security, Justice, and the US Trade Representative have raised concerns in recent months that these firms are subsidiaries of Chinese government-owned entities and vulnerable to influence and exploitation by the Chinese Communist Party.

China Telecom Americas is a Delaware corporation that is indirectly and ultimately owned and controlled by the government of the People's Republic of China (Chinese government).

"China Telecom, a corporation organized under Chinese law, holds a 70.89% voting and equity interest in CTL," FCC said.

"China Telecom is 100% directly owned by the State-owned Assets Supervision and Administration Commission of the State Council, a Chinese government organization," it added.

In 2018, the firm was accused of abusing its position as a point-of-presence inside networks in the US and Canada to help China's intelligence agencies conduct espionage.

The FCC's move against Chinese firms is the latest indication that the White House administration is planning to take a tough line toward China. Earlier this month, the US Justice Department and other federal agencies urged the FCC to revoke the authorisation of China Telecom to operate in the US.

Last year, the most members of Commission had voted unanimously to reject the right of another Chinese telecom firm, China Mobile Ltd, to offer services in the US. The FCC said at that time that the approval could be misused by Beijing to conduct espionage operations against the US government.

Also last year, five Chinese supercomputer firms were placed by the US Commerce Department on its blacklist over concerns of potential military applications of supercomputers against the US.

The move came following the inclusion of telecom giant Huawei and subsidiaries on the US blacklist in May 2019.