U.S. Continues To Divest Chinese Companies From Telecommunications Networks

Date:Jun 05, 2020


On June 3, the US government continued to exclude Chinese companies from its communications network.

This week, Pacific Networks expressed the hope that the Federal Communications Commission (FCC) will not shut down its operations in the United States.

In addition, the FCC's lawyers provided the legal basis for prohibiting US telecommunications companies from using Huawei equipment.

At the same time, the United Kingdom is also affected by the US action against China. The British government is discussing whether to comply with US requirements and completely ban Chinese Huawei from entering the country's telecommunications market.

Responses from Pacific Networks and ComNet

"The Chinese government has never asked our two companies to take any action that would'endanger US national security and law enforcement interests', and our two companies will not be easily affected and controlled by the Chinese government." Pacific Networks and ComNet submitted to The FCC document stated, “Instead, Pacific Networks and ComNet provide high-quality services to customers, have consistently complied with FCC regulations, and have been cooperating with the US National Security and Law Enforcement Department.”

Pacific Networks and ComNet are two of the four Chinese telecommunications companies targeted by the FCC that pose a potential risk to US national security. Following a ban on China Mobile’s construction of telecommunications facilities in the United States, the FCC opened new processing procedures in April against China Telecom Americas, China Unicom Americas, Pacific Networks and its wholly-owned subsidiary ComNet, asking them to indicate that the agency should not Reasons to start the process of revoking the authorization so that they can conduct business in the United States.

In a 92-page response document, Pacific Networks and ComNet mentioned that the FCC threat to ban them from entering the US market is "unnecessary and unfounded."

They disputed the basic premise of the FCC inquiry.

"The only reason for the FCC to take these actions is that we are an investment company held by the Chinese government that indirectly accounts for more than 50% of the shares, not because they discovered any intervention by the Chinese government or loopholes in the company's operations and networks." Pacific Networks and ComNet wrote this. "The FCC did not mention any specific misconduct regarding the two companies--that is, the act that would result in the revocation of our business authorization and therefore prohibit the provision of telecommunications services to the public, but instead invoked the FCC in its "China Mobile Directive 2019" Actions, and assert that since these Chinese companies have been authorized, there is widespread concern about the increased national security and law enforcement risks posed by China."

The two companies also detailed their respective businesses and ownership structures.

According to Reuters reports, two other Chinese companies targeted by the FCC-China Telecom Americas and China Unicom Americas have not yet responded to the agency's actions.