FCC Votes Unanimously to Revoke China Telecom License

Today the Federal Communications Commission (FCC) voted unanimously to revoke the license of China Telecom to provide domestic interstate and international telecommunications services within the United States.  The order is based in part on the April 2020 recommendation of the Department of Justice and related Executive Branch agencies (collectively “Team Telecom”) and reflects a specific  proceeding launched in December 2020 in which the FCC asked China Telecom to address its concerns.

While China Telecom is one of the world’s largest telecom providers, its ability to operate in the US is a privilege, not a right, which it lost for failing to honor its license commitments and for presenting unacceptable national security risk to Americans. The action demonstrates that the FCC can stand up to the world’s big players and suggests that the FCC will have no problem to deny equipment authorizations for the likes of DJI, Huawei, Hikvision, Lenovo and others as it contemplates in the Covered List proceeding.

As FCC Commissioner Brendan Carr noted, “This presents another opportunity to look at updating the agency’s Covered List. The determinations reached by the Executive Branch agencies regarding China Telecom Americas appear sufficient to trigger the process of adding it to the FCC’s Covered List under our existing rules. So I would encourage the Commission to take that action, since it could impose additional restrictions on China Telecom Americas that go beyond the scope of our 214 authorizations.”

See the CTT event featuring FCC Commissioner Brendan Carr calling for DJI to be added to the FCC’s Covered List.

The FCC concluded the following:

  • China Telecom Americas, a U.S. subsidiary of a Chinese state-owned enterprise, is subject to exploitation, influence, and control by the Chinese government and is highly likely to be forced to comply with Chinese government requests without sufficient legal procedures subject to independent judicial oversight. 

  • Since granting the license to China Telecom Americas some two decades ago, the national security environment with China has changed significantly. China Telecom Americas’ ownership and control by the Chinese government raise significant national security and law enforcement risks by providing opportunities for China Telecom Americas, its parent entities, and the Chinese government to access, store, disrupt, and/or misroute U.S. communications, which in turn allow them to engage in espionage and other harmful activities against the United States. 

  • China Telecom Americas’ conduct and representations to the Commission and other U.S. government agencies demonstrate a lack of candor, trustworthiness, and reliability that erodes the baseline level of trust that the Commission and other U.S. government agencies require of telecommunications carriers given the critical nature of the provision of telecommunications service in the United States. 

  • Attempts to mitigate the situation would not address the significant national security and law enforcement concerns. 

  • China Telecom Americas willfully violated two of the five provisions of the 2007 Letter of Assurances with the Executive Branch agencies, compliance with which is an express condition of its international section 214 authorizations. 

  • Classified evidence submitted by the Executive Branch agencies further supports the decisions to revoke the domestic authority and revoke and terminate the international authorizations issued to China Telecom Americas, and the determination that further mitigation will not address the substantial national security and law enforcement risks.

China Telecom Americas is relatively small part of China Telecom. They entity will have 60 days to wind down its US operation, including wholesale voice and machine to machine communication.. The FCC will assist U.S. customers with transitioning to other mobile service providers from China Telecom Americas’ discontinued services and will issue a multilingual consumer guide which explains this action and potential consumers options and alternatives.