Yesterday, The U.S Federal Communications Commission (FCC) has officially declared that they have started the process to revoke the authorization of China Telecom. Thus, once the process is completed, China Telecom will no longer have the right to operate in the United States.
This is a large step in the process of decreasing China’s position in the telecommunications industry of the United States. The reasoning behind the revocation is national security concerns. In a 5-0 Thursday vote, the FCC decided to remove all Huawei equipment as well. As reported by Bloomberg, for Huawei and China Telecom both, the US market constitutes just a small fracture of revenue.
U.S Concerned About China Telecom’s Relation To The Government
Chairman of the FCC, Ajit Pai has commented on it saying that the U.S has “significant concerns” regarding China Telecom complying with the request of Chinese governments concerning access to information.
Pai went on to say, “Security agencies contend the company [China Telecom] hasn’t complied with cybersecurity and privacy laws and provides opportunities for Chinese state-sponsored economic espionage and disruption of U.S. communications traffic.”
China Denies U.S Allegations
Reuters has reported that Hua Chunying, the spokeswoman of the Chinese foreign ministry, has commented on the U.S claims today in the early hours of the morning. Chunying has stated that the allegations of the United States were completely false.
“This is a denial of the market economy principle and reveals the hypocrisy in its so-called level playing field,” Chunying said, “The U.S. should stop stretching the concept of national security, stop suppressing Chinese specific companies and provide fair, just and nondiscriminatory environment for companies operating there.”
FCC Banning Chinese Telecom Equipment In 2019
Already in 2019, the FCC has banned the US from purchasing telecom equipment from either Huawei or ZTE, the reasoning being national security.
After FCC’s Thursday decision, China accused the United States of “abusing its national power to oppress certain countries and companies”, as reported by Bloomberg.
The Statement By Huawei
Following the decision of the FCC, Huawei also released a statement in which the company said they are, “disappointed with the FCC’s decision to force the removal of our products from telecommunications networks. This overreach puts U.S. citizens at risk in the largely underserved rural areas – during a pandemic – when reliable communication is essential.”
Democrats Joining In The Voting Favoring Limitation Of Chinese Telecom In The US
Although the battle with China’s state-owned telecommunication industry has gained momentum during President Trump’s time in office, the FCC Democrats have also joined in the voting favoring limiting China’s telecommunication role in the United States market. Thus, it can indicate that this battle will not take an abrupt end once President-elect, Joe Bidden, will assume his position in the office in a few weeks.
What is China Telecom?
China Telecom is one of the biggest telecom providers in China. They had more than 335 million customers around the world, according to the 2019 report. According to the statement made by the FCC this Thursday, the company is substantially controlled by China’s Communist Party.
How did China Telecom vs US battle start?
In April of 2019, the FCC has spoken up about possibly discontinuing the operations of the state-controlled Chinese telecom companies in the US. The companies involved were China Telecom, China Unicom Americas, Pacific Networks Corp, and its subsidiary ComNet. In May of 2019, Donald Trump signed an executive order that banned US companies from using telecommunications equipment produced by companies that pose national security threats. Huawei was then added to the list.
