FCC revokes U.S. authorization of Chinese telecom firm Pacific Networks

The U.S. Federal Communications Commission (FCC) on Wednesday voted to revoke authorization for Chinese telecom Pacific Networks and its wholly owned subsidiary ComNet to provide U.S. telecommunications services.

The 4-0 vote to revoke the authorisation first granted in 2001 is the latest move by the American regulator to bar Chinese telecommunications carriers from the United States citing national security concerns. The FCC said Pacific Networks and ComNet are indirectly and ultimately owned and controlled by the Chinese government.

Jeffrey J. Carlisle, a U.S. lawyer representing Pacific Networks, declined comment. In January, he told the FCC that Pacific Networks and ComNet are owned by CITIC Telecom International Holdings.

The FCC says the carriers are ultimately controlled by CITIC Group Corp, a Chinese state-owned limited liability company.

Carlise's letter said the carriers "engage in very limited and small scale facilities-based operations in the United States that do not pose national security concerns....The primary business of the companies is providing retail calling cards."

The Chinese commerce ministry criticised the U.S. actions, and said China would adopt measures necessary to safeguard the legitimate rights of its firms.

"The U.S. should stop the groundless crackdown on Chinese firms right now and the wrongdoings of politicizing trade and economic issues immediately," Gao Feng, a spokesman at the ministry, said during a regular press conference on Thursday.

FCC Commissioner Geoffrey Starks noted the three-year commission effort to address Chinese telecom carriers. "Taken as a whole, our actions have strengthened our national security," Starks said.

In March 2021, the FCC found Pacific Networks and ComNet had failed to "dispel serious concerns regarding their retention of their authority to provide telecommunications services in the United States."

In January, the FCC voted to revoke a similar authorization for China Unicom's U.S. unit to operate in the United States, citing national security concerns.

In October, the FCC revoked the U.S. authorization for China Telecom (Americas), saying it "is subject to exploitation, influence and control by the Chinese government." Chinese Telecom failed to convince a U.S. court to reverse the decision.

In 2019, the FCC rejected China Mobile Ltd's bid to provide U.S. telecommunications services, citing national security risks.