FCC Considers Barring China Telecom from U.S. Over Security

Todd Shields, Bloomberg News

Ajit Pai, chairman of the Federal Communications Commission (FCC), speaks during an open meeting in Washington, D.C., U.S., on Thursday, Nov. 16, 2017. The FCC plans to vote in December to kill the net neutrality rules passed during the Obama era. Photographer: Zach Gibson/Bloomberg , Bloomberg

(Bloomberg) -- The Federal Communications Commission said it’s considering whether to revoke China Telecom (Americas) Corp.’s access to the U.S. market.

The agency on a 5-0 vote said it would consider whether China Telecom’s ties to the Chinese government pose a threat to U.S. security.

“We do so for good reason,” said FCC Chairman Ajit Pai. He said security agencies contend that China Telecom Americas hasn’t complied with cybersecurity and privacy laws, and provides opportunities for Chinese state-sponsored economic espionage and disruption of U.S. communications traffic. The company is owned by the Chinese government, Pai said.

The agency in April named China Telecom, China Unicom Americas Ltd., Pacific Networks Corp. and its subsidiary ComNet, and told them to explain why the agency shouldn’t move to revoke their authorizations.

China Telecom Americas in a June 8 filing told the FCC it’s an independent business based in the U.S. and isn’t subject to Chinese government control. It called for a hearing if the FCC were to move against it.

The FCC barred China Mobile from the U.S. market last year, and said it would review other companies’ records.

(Updates with FCC chairman, background starting in third paragraph.)