FCC Adds China Unicom to List of Chinese Telecoms Banned in U.S. on Espionage Fears

Todd Shields, Bloomberg News

Signage for China Unicom Ltd. is displayed outside a store in Shanghai, China, on Monday, Aug. 21, 2017. Shares of Unicom Group's key units in Shanghai and Hong Kong rose after China's second-largest wireless carrier announced a $11.7 billion stock sale as part of a government push to draw private capital into its state-owned enterprises. Photographer: Qilai Shen/Bloomberg , Bloomberg

(Bloomberg) -- The U.S. Federal Communications Commission ejected China Unicom Hong Kong Ltd. from the U.S. market, adding to the tally of Chinese telecommunications companies sanctioned by the agency over security concerns.

Thursday’s actions on a 4-0 vote follows last year’s FCC action to bar China Telecom (Americas) Corp., and the agency’s refusal two years earlier to let China Mobile Ltd. enter the U.S. market.

Thursday’s vote shows potential espionage and data theft by Chinese state-owned companies remains a concern under President Joe Biden after being elevated as an issue by his predecessor President Donald Trump.

“There has been mounting evidence, and with it growing concern, that Chinese state-owned carriers pose a real threat to the security of our telecommunications networks,” said FCC Chairwoman Jessica Rosenworcel.

The FCC has started “similar revocation proceedings” against Chinese carriers Pacific Networks Corp. and ComNet, Rosenworcel said.

China Unicom must discontinue service in the U.S. within 60 days of the order’s release. The company provides mobile service and leased lines in the U.S., as well as internet access and cloud and data services.

The unit formally known as China Unicom (Americas) Operations Ltd. was earlier challenged by the FCC to show it was independent from the Chinese government. The company, one of the largest carriers in China, but isn’t a major service provider in the U.S.

China Unicom replied that it had operated in the U.S. for nearly 20 years through a subsidiary that fully complies with the law. In a June 2020 filing, China Unicom said it had followed rules and there was no basis to oust it from the U.S.

(Updates with comment from FCC chair in fourth paragraph.)