Tuesday, 04 August 2020

Chinese operators stand their ground as FCC threatens to revoke licences

by Harry Baldock, Total Telecom
Tuesday 09 June 20

Tensions between the US and China could see the telcos banned from operating in the US entirely

Back in April, the US Federal Communications Committee (FCC) issued a ‘show cause’ order to four Chinese operators – China Telecom, China Unicom, Pacific Networks, and ComNet – telling them to prove they operate independently of the Chinese government or else lose their US licence…

Back in April, the US Federal Communications Committee (FCC) issued a ‘show cause’ order to four Chinese operators – China Telecom, China Unicom, Pacific Networks, and ComNet – telling them to prove they operate independently of the Chinese government or else lose their US licence

The cause for the sudden threats are geopolitical in nature, with the FCC at the time citing the Chinese government’s opaque handling of the coronavirus pandemic as evidence that Chinese companies may pose a national security risk to the US.

Tensions increased even further in May, when the FCC had voted unanimously to deny China Mobile’s US licence application. Meanwhile, an executive order by President Donald Trump extended sanctions on Huawei, effectively stripping them of their access to the US superconductor industry. 

Now, the four telcos under pressure from the FCC to prove their independence are beginning to vocally fight their corner. 

China Telecom’s American division yesterday said the FCC’s claims were “unfounded” and “based solely on foreign policy concerns in the absence of any evidence whatsoever of specific misconduct.” It further argued that to terminate their licence, first granted almost 20 years ago, would be unlawful.

China Unicom argued likewise, asserting on June 1st their “good record of compliance with FCC regulatory obligations”.

Pacific Networks and ComNet also defending their position, saying that “neither company has been asked by the Chinese government or the Chinese Communist Party to take any action that would ‘jeopardize the national security and law enforcement interests of the United States.’” 

Sadly, much like the ongoing situation with Huawei, this clash seems to entirely stem from geopolitics, with national security risks almost a mere a pretext. Statements of good, honourable intentions do not look to be enough to defend these Chinese entities from the US’ political wrath, since this is not primarily an evidence-based conflict. 

Until the political situation cools, both sides of this legal battle will be digging in for a long conflict.

 

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