U.S. Moves to Hinder China Telecom and Links to Hong Kong

The Trump administration wants to revoke licenses used by China Telecom’s U.S. subsidiary to act as a common carrier, connecting domestic and international networks. The U.S. Department of Justice, leading the departments of Defense and Homeland Security, requested that the FCC permanently rescind these licenses. The administration stated that China’s technology interests are a threat to U.S. security. Citing the same concerns, U.S. gave Google permission to open a high-speed Internet link to Taiwan but not Hong Kong.

The Wall Street Journal reports that, if the proposal goes through, it “would effectively bar China Telecom from serving U.S. clients and could hinder its ability to send data across American networks.” The federal agencies referred to an “evolving national security environment since 2007,” the year China Telecom first received the licenses, as well as more information about China’s role “in malicious cyber activity targeting the United States.”

China Telecom, one of that country’s three major phone/Internet providers, is state-owned, raising U.S. officials’ fears that it “would be forced to comply with any Chinese government request, including those for communications intercepts.” The officials added that China Telecom couldn’t be trusted “to identify, disrupt, or provide assistance for investigations into unlawful activity sponsored by the Chinese government.”

The U.S. agencies also alleged that, “China Telecom made inaccurate statements to officials about where it stores U.S. records, that its lax network security threatened American interests, and that the company disrupted and misrouted Internet traffic.” China Telecom has denied all such claims and stated its readiness to share “additional details” and address “any concerns.”

Last year, the FCC denied an application of China Mobile’s U.S. subsidiary to secure common carrier licenses.

Elsewhere, WSJ reports that, “U.S. officials granted Google permission to turn on a high-speed Internet link to Taiwan but not to the Chinese territory of Hong Kong.” The U.S. Department of Justice, backed by the departments of Defense and Homeland Security, ruled that, “there is a significant risk that the grant of a direct cable connection between the United States and Hong Kong would seriously jeopardize the national-security and law-enforcement interests of the United States.”

The agencies, however, urged the FCC to grant Alphabet permission to start using its Pacific Light cable connecting California to Taiwan. The 8,000-mile underwater cable had already been built, “with branches to Taiwan and Hong Kong” remaining dormant. WSJ notes that, although the FCC has final authority over the licenses, “it usually defers to other agencies on projects’ national-security reviews.”

The decision impacts a Facebook project to build a fiber-optic line linking Los Angeles to Hong Kong and a Google project linking Hong Kong to the U.S. territory of Guam. China has blocked these companies from operating on the mainland, but Hong Kong, as a semi-autonomous territory, has free access to the Internet and “has served as a stopping-off point for global companies seeking connections to the region.”