The US Federal Communications Commission (FCC) on Wednesday voted to revoke the authorisation for Pacific Networks and its wholly owned subsidiary ComNet to provide domestic telecommunications services in another blow to Chinese telecom stocks.
The 4-0 vote to revoke the authority that had been granted in 2001 is the latest move by the regulator to bar Chinese telecommunications carriers from the US, 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, an attorney at Lerman Senter in Washington, 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, a Chinese state-owned limited liability company.
Beijing said it opposed the US crackdown on its telecom groups, the commerce ministry said on Thursday. Commerce ministry spokesman Gao Feng said China would take measures necessary to safeguard the legitimate rights of its companies.
Chinese Telecoms Under Fire
Carlisle’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 embassy in Washington did not immediately comment.
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,” he said.
In January, the FCC voted to revoke a similar authorisation for China Unicom’s US unit, citing national security concerns.
In October 2021, the FCC revoked the US authorisation for China Telecom (Americas), saying it “is subject to exploitation, influence and control by the Chinese government.” China Telecom failed to convince a US court to reverse the decision.
In 2019, the FCC rejected China Mobile’s bid to provide US telecommunications services, citing national security risks.
- Reuters, with additional editing by George Russell