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Trump administration asks FCC to ban China Telecom in US

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People visit China Telecom’s booth during 2019 World 5G Convention at Beijing Etrong International Exhibition & Convention Center on November 21, 2019 in Beijing, China.

A number of U.S. executive agencies have asked the Federal Communications Commission terminate China Telecom’s authorization to operate, citing “unacceptable” national security risks, as the Trump administration’s campaign against the Chinese telecommunications industry continues.

State-owned China Telecom is one of the country’s largest mobile networks and broadband providers.

The Department of Justice along with other federal agencies including the State Department, want the FCC to revoke China Telecom’s license to carry out international telecommunications services to and from the U.S.

“Today, more than ever, the life of the nation and its people runs on our telecommunications networks,” said John Demers, assistant attorney general for national security.

“The security of our government and professional communications, as well as of our most private data, depends on our use of trusted partners from nations that share our values and our aspirations for humanity.  Today’s action is but our next step in ensuring the integrity of America’s telecommunications systems.”

The FCC was not immediately available for request when contacted by CNBC.

China Telecom (Americas) was given authorization by the FCC in 2007 but the DOJ claims that the company has failed to comply with terms of its “existing agreement” with the department.

The request by federal agencies is the latest move in the Trump administration’s trade and technology battle with China, particularly in the area of telecommunications.

Huawei, the world’s largest networking equipment maker, was put on a U.S. blacklist last year restricting its access to American technology. Washington maintains the Chinese firm’s gear could be used by Beijing for espionage.

And last year, the FCC voted unanimously to bar another state-owned carrier China Mobile from providing its services in the U.S.

The federal agencies laid out a number of issues they had with China Telecom including the “evolving national security environment since 2007” and “increased knowledge of the PRC’s (People’s Republic of China) role in malicious cyber activity targeting the United States.”

China Telecom is “vulnerable to exploitation, influence, and control by the PRC government,” the agencies claim.

And the Trump administration claims that there could be opportunities for Chinese state actors to “engage in malicious cyber activity enabling economic espionage and disruption and misrouting of U.S. communications.”

China Telecom did not immediately respond to a request for comment when contacted by CNBC.

The company sells mobile services to Chinese customers residing in or travelling to the U.S.

A large part of the U.S.’s campaign on China’s telecommunications sector is about who has control of next-generation mobile infrastructure known as 5G. It promises super-fast data speeds and the ability to underpin critical infrastructure. The U.S. is concerned that China, via Huawei and its telecommunications providers, could come to be a dominant force in 5G globally.

But the U.S. doesn’t have a direct competitor to Huawei and suffers from a lack of coherent policy around how to counter China’s rise in this area.

Attorney General William Barr suggested earlier this year that the U.S. take direct stakes in Huawei’s European rivals Nokia and Ericsson. The suggestion was later dismissed by Vice President Mike Pence.

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