U.S. continues push to keep China out of its telecom networks

The U.S. government’s battle to keep Chinese companies out of its communications networks rages on.

This week, Pacific Networks and its subsidiary ComNet urged the FCC not to shut down their U.S. operations.

Separately, lawyers from the FCC laid out their legal argument for banning U.S. telecom companies from using Huawei equipment.

And America’s anti-China influence is being felt in the UK, where that government’s ongoing debate over whether to bow to US demands and ban Huawei outright from that country’s telecom market.

A response from Pacific Networks and ComNet
“Neither company has been asked by the Chinese government or the Chinese Communist Party to take any action that would ‘jeopardize the national security and law enforcement interests of the United States’ or would suggest that the companies are vulnerable ‘to the exploitation, influence, and control of the Chinese government,'” wrote Pacific Networks and ComNet in a filing to the FCC. “To the contrary, Pacific Networks and ComNet have provided valuable services to their customers, and consistently demonstrated compliance with Commission regulations and cooperation with both national security and law enforcement authorities.”

Pacific Networks and ComNet are two of the four companies targeted by the FCC as potential risks to national security. After banning China Mobile from building telecom facilities in the US, the FCC in April opened a new proceeding against China Telecom Americas, China Unicom Americas, Pacific Networks and ComNet. The agency asked the companies “to explain why the Commission should not start the process of revoking their domestic and international section authorizations enabling them to operate in the United States.”

In their 92-page response, Pacific Networks and ComNet argued that the FCC’s threat to ban them from the US market was “unnecessary and unwarranted.”

And they took issue with the basic premise of the FCC’s inquiry.

“The [FCC] bureaus propose these actions for the sole reason that an investment company owned by the People’s Republic of China holds an indirect ownership interest in the companies in excess of 50% – not because they are aware of any intervention by the Chinese government or vulnerabilities in the Companies’ operations and networks,” the companies wrote. “The bureaus do not refer to any specific wrongdoing on the part of either company that would warrant authorization revocation and consequent prohibition from providing telecommunications services to the public, but rather cite to the Commission’s action in its 2019 China Mobile Order and assert the general concern – not specific to Pacific Networks or ComNet – that national security and law enforcement risks posed by China have grown since the companies received their authorizations.”

The firms also offered a detailed look at their operations and ownership structure.

Reuters reported that the other two other companies targeted by the FCC – China Telecom Americas and China Unicom Americas – haven’t yet filed their response to the agency’s proceeding.

Huawei’s fight back
In a separate proceeding this week, the FCC’s lawyers filed a 122-page argument with the US Court of Appeals for the Fifth Circuit detailing why the agency has the legal authority to prevent U.S. telecom companies from using Universal Service Fund money to buy Huawei equipment.

That particular topic is simply one of many proceedings by U.S. government agencies against China’s Huawei. For example, the FCC is conducting a separate proceeding into whether it can pay smaller U.S. wireless network operators to replace their existing Huawei equipment. And the U.S. Commerce Department has extended its ban on US business with Huawei for another 12 months.

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