National Security leads the US to Deny Access to Chinese Telecom Provider

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The FCC intends to ban a Chinese telecommunications provider from allowing international telecommunications service within the United States and various points based on national security interests at its next public listed meeting. As per a draft Order issued last week, the agency would determine that the Chinese government is conclusively regulating China Mobile International USA (“China Mobile USA” or the “Company”) and subject to Chinese government exploitation, control, and being directed that could threaten the security and dependability of U.S. networks. The rejection of China Mobile USA’s application would identify the first time the FCC has denied an application to enter the U.S. market based on national security businesses raised by the group of Federal Executive Branch agencies generally known as “Team Telecom.”

The dismissal also would describe another barrage in the FCC’s recent attempts to combat network security and corporate surveillance issues involving foreign-owned transmitters. While the recommended action against China Mobile USA is hardly to make any kind of effect on foreign carrier investment or entrance to the U.S. telecommunications market overall, it works as a reminder of the difficulties foreign-owned telecommunications providers (and especially those with affinities to China) may face when apportioning with the FCC.

Team Telecom concluded after years of inspection that, although China Mobile USA is a Delaware organization, it is eventually owned by a Chinese government-backed enterprise controlled to the supervision and administration of Chinese authorities. Team Telecom additionally found that the Chinese government could use its share in China Mobile USA to make the Company to covertly watch, degrade, and disrupt U.S. communications, including U.S. government intelligence.

Based on Team Telecom’s evaluation and the FCC’s report, the FCC plans to reject China Mobile USA’s application owing to substantial national security interests and law enforcement uncertainties that cannot be lessened. Persistent with its solicitation of, and administration of deferring to, Team Telecom’s proficiency on national security issues, the Commission’s recommended decision reflects Team Telecom’s national security evaluation of China Mobile USA as well as the FCC’s investigation.