Yahoo Finance FCC Adds China Unicom to List of Chinese Telecoms Banned in U.S. on Espionage Fears
(Bloomberg) -- The U.S. Federal Communications Commission ejected China Unicom Hong Kong Ltd. from the U.S. market, adding to the tally of Chinese telecommunications companies sanctioned by the agency over security concerns.
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Thursday’s actions on a 4-0 vote follows last year’s FCC action to bar China Telecom (Americas) Corp., and the agency’s refusal two years earlier to let China Mobile Ltd. enter the U.S. market.
The vote Thursday shows potential espionage and data theft by Chinese state-owned companies remains a concern under President Joe Biden after being elevated as an issue by his predecessor President Donald Trump.
“There has been mounting evidence, and with it growing concern, that Chinese state-owned carriers pose a real threat to the security of our telecommunications networks,” said FCC Chairwoman Jessica Rosenworcel.
The FCC has started “similar revocation proceedings” against Chinese carriers Pacific Networks Corp. and ComNet, Rosenworcel said.
“This is another indication that the administration is taking a very careful and deliberate approach to securing America’s telecommunications networks,” said Martijn Rasser, director of the Technology and National Security Program at the Washington-based Center for a New American Security.
“It’s a big deal in the sense that any Chinese telecommunications firm poses a threat,” Rasser said in an interview. “From a purely business point of view, it’s not a big deal.”
China Unicom is one of the largest carriers in China, but isn’t a major service provider in the U.S. The company provides mobile service and leased lines in the U.S., as well as internet access and cloud and data services.
It said in an emailed statement that it has complied with the law and that the FCC acted “without any justifiable grounds and without affording the required due process.”
China Unicom “will proactively protect the rights and interests of the company and its customers,” the company said in the statement.
Chinese Foreign Ministry spokesman Zhao Lijian echoed those comments Friday at a regular press briefing in Beijing, adding that the U.S. “once again used security as pretext to revoke the license of a Chinese company.”
“That is a blatant overstretching of the national security concept, and an abuse of state power to suppress Chinese companies,” he said.
The firm must discontinue service in the U.S. within 60 days of the order’s release, said Rosenworcel.
The unit, formally known as China Unicom (Americas) Operations Ltd., was earlier challenged by the FCC to show it was independent from the Chinese government.
(Updates with comment from China’s Foreign Ministry.)
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