Schumer, Cotton Request FCC Conduct Review Of Prior FCC-Granted Licenses Authorizing Two Chinese Telecomm Companies – Owned And Controlled By The Chinese Government – To Operate In The U.S.; Senators’ Letter Follows FCC’s Recent Rejection Of China Mobile USA’s Application For Same Authorization On National Security Grounds

September 16, 2019

Washington, D.C.—Senate Democratic Leader Chuck Schumer (D-NY) and Senator Tom Cotton (R-AR) today sent a letter to Federal Communications Commission (FCC) Chairman Ajit Pai, requesting that the FCC open a proceeding to review whether its legacy Section 214 authorizations of Chinese-state owned telecommunications companies China Telecom and China Unicom continue to serve the public interest and, if necessary, should be revoked. The FCC recently voted unanimously to deny Chinese-state owned China Mobile USA’s application for authorization, concluding that the firm was vulnerable to exploitation, influence, and control by the Chinese government, and thereby posed national security and law enforcement risks that could not be addressed by a mitigation agreement.

The Senators note that prior to China Mobile USA’s denial, the FCC granted legacy authorizations over ten years ago to China Telecom and China Unicom, two other Chinese state-owned telecommunications companies currently operating in the United States. Over the past decade the Chinese government has substantially increased its involvement in cyber intrusions and attacks against the United States.

The Senators request that the FCC open a proceeding to review whether its legacy Section 214 authorizations of these Chinese-state owned telecommunications companies continue to serve the public interest, given the serious concerns raised in China Mobile USA’s review, the companies’ deep ties to the Chinese government, the evolving national security environment, and increased knowledge of the Chinese government’s role in economic and other forms of espionage.  The Senators also urge the FCC to examine whether prior national security mitigation measures require re-examination.

Leader Schumer and Senator Cotton’s letter to Federal Communications Commission Chairman (FCC) Pai can be read here and below:

September 16, 2019

The Honorable Ajit Pai

Chairman

Federal Communications Commission

445 12th Street SW

Washington, DC 200554

Dear Chairman Pai:

We write regarding the Federal Communications Commission’s (FCC) legacy authorizations to Chinese state-owned telecommunications companies operating in the United States.

            Earlier this year, the FCC voted unanimously to deny China Mobile USA’s application for authorization under Section 214 of the Communication Act of 1934, which requires companies to obtain approval before offering telecommunications services in the United States. In its memorandum opinion and order, the FCC determined that granting the application would not serve the public interest based on the risks to our nation’s national security and law enforcement interests.

In support of its decision, the FCC, consistent with longstanding practice, relied on the expertise and recommendation of a federal interagency working group known as “Team Telecom,” which is composed of national security, law enforcement, and foreign and trade policy experts throughout the executive branch. These experts concluded that China Mobile was vulnerable to exploitation, influence, and control by the Chinese government and that granting an authorization would pose national security and law enforcement risks that could not be addressed by a mitigation agreement. They also raised concerns regarding China’s 2017 national intelligence law that requires Chinese companies to support, provide assistance, and cooperate in China’s national intelligence work, wherever in the world they operate.

Given these serious concerns, questions have been raised regarding whether and to what extent these same concerns apply to legacy authorizations granted by the FCC to other Chinese state-owned telecommunications companies currently operating in the United States, including China Telecom and China Unicom. Although China Mobile’s application appears to have posed special concerns due to its size and resources, the evolving national security environment and increased knowledge of the Chinese government’s role in economic and other forms of espionage suggest that effectiveness of prior mitigation measures require re-examination.

China Mobile, China Telecom and China Unicom are often referred to as the “big three” of the Chinese telecommunications industry. While these companies are equally beholden to the Chinese government, two of them continue to operate in the U.S. despite the security risks identified in China Mobile’s application. These state-owned companies continue to have access to our telephone lines, fiber optic cables, cellular networks and satellites in ways that could give it the ability to target the content of communications of Americans or their businesses and the U.S. government, including through the “hijacking” of telecommunications traffic by redirecting it through China.

Put simply, we may be currently exposing ourselves to substantial economic, national security and law enforcement risks because of past decisions by the FCC that have not been revisited despite China’s continued cyber-attacks against our country. Accordingly, we request that the FCC open a proceeding to review whether its legacy Section 214 authorizations of Chinese-state owned telecommunications companies continue to serve the public interest and, if necessary, should be revoked. As part of this proceeding, we also request that the FCC continue to seek the expertise and recommendations of the relevant executive branch agencies regarding how evolving national security, law enforcement, and foreign or trade policy concerns impact their assessment of these legacy authorizations.

Thank you for your attention to this important matter.

Sincerely,

cc:        The Honorable Michael O’Rielly, FCC Commissioner

The Honorable Brendan Carr, FCC Commissioner

The Honorable Jessica Rosenworcel, FCC Commissioner

The Honorable Geoffrey Starks, FCC Commissioner

              The Honorable William Barr, Attorney General

The Honorable Kevin McAleenan, Acting Secretary of Homeland Security

The Honorable Mark Esper, Secretary of Defense

The Honorable Mike Pompeo, Secretary of State

The Honorable Wilbur Ross, Secretary of Commerce

The Honorable Robert Lighthizer, United States Trade Representative

Kelvin Droegemeier, Director, White House Office of Science and Technology Policy

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