The FCC on Thursday voted unanimously to block China Mobile USA from providing international phone services in the U.S., citing threats to national security.
In denying China Mobile’s request, the commission determined the entity is ultimately owned and controlled by the Chinese government, and therefore could be used to exploit communications networks in the U.S. and partake in activities like espionage. China Mobile’s application, first filed in 2011, sought broad authorization under section 214 of the Communications Act, which through interconnection agreements with U.S. carriers could give the company access to large amounts of U.S. traffic.
At a press conference Friday, China’s Foreign Ministry responded to the decision against China Mobile, urging the U.S. to “stop unjustified oppression of Chinese enterprises and provide a fair, just and non-discriminatory environment for their investment and operation in the U.S.”
The FCC stance on China Mobile follows recommendations from Executive Branch agencies in 2018 to deny the request, also determining that national security risks could not be fixed through a voluntary mitigation agreement. This marks the first time the executive branch recommended the FCC deny an application based on national security concerns.
“Simply put, granting China Mobile’s application would not be in the public interest. China Mobile ultimately is owned and controlled by the Chinese government. That makes it vulnerable to exploitation, influence, and control by that government,” said FCC Chairmain Ajit Pai in a statement. “And in the current security environment, which features Chinese government involvement in computer intrusions and economic espionage, there is a significant risk that the Chinese government would use China Mobile to conduct activities that would seriously jeopardize the national security, law enforcement, and economic interests of the United States.”
In issuing a statement, Commissioner Brendan Carr argues that evidence from the multi-year inquiry into China Mobile suggests the federal government needs to go further and investigate Chinese-owned entities that have already been authorized to operate in the United States including China Unicom and China Telecom.
“Those companies hold the same Section 214 authorizations that China Mobile sought. The evidence I’ve seen in this case calls those existing authorizations into question,” said Carr. “For instance, the decision today cites reports that China Telecom has been hijacking U.S. traffic and redirecting it through China.”
Carr called on the FCC to open a proceeding on those matters, and urged national security agencies to examine whether the existing authorizations should be revoked.
“Security threats have evolved over the many years since those companies were granted interconnection rights to U.S. networks in the early 2000s,” said Carr. “Much if not all of the reasoning behind today’s decision appears to apply with equal or greater force to those legacy authorizations.”
Speaking at a press conference, Pai said that the FCC was also looking at the authorizations previously granted to China Unicom and China Telecom, according to the Associated Press.
Commissioner Jessica Rosenworcel on Thursday criticized the FCC for doing “too little to address the vast challenges of network security and safety.” Rosenworcel voted to deny China Mobile’s application, but called the FCC decision “performative security,” noting the request had been placed for more than eight years.
“It has been on permanent pause,” said Rosenworcel in a statement. “So while I support this vote, it does nothing to change the status quo. Nor does it address any of the fundamental challenges to the security of digital age communications.”
The U.S. and China have been at odds, including tensions around inclusion in telecom infrastructure. The U.S. has been urging allies to ban equipment from Chinese telecom giant Huawei from 5G networks due to security concerns. Recent reports have indicated the UK may allow Huawei in “non-core” parts of next-generation networks.
The FCC is also considering pulling funding from U.S. service providers that use telecom equipment from Chinese companies that have been flagged as national security risks.