FCC kicks China Telecom out of United States

Chinese telco given 60 days to stop providing domestic and international services.

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Image: Getty Images

The United States Federal Communications Commission (FCC) has removed the authority of China Telecom to operate in the US, and given it 60 days to pack its bags, and stop providing domestic and international services.

Citing a recommendation from the Trump-era Justice Department, the Commission said China Telecom America "failed to rebut" a series of concerns raised.

"China Telecom Americas, a US subsidiary of a Chinese state-owned enterprise, is subject to exploitation, influence, and control by the Chinese government and is highly likely to be forced to comply with Chinese government requests without sufficient legal procedures subject to independent judicial oversight," the FCC said.

"China Telecom Americas' ownership and control by the Chinese government raise significant national security and law enforcement risks by providing opportunities for China Telecom Americas, its parent entities, and the Chinese government to access, store, disrupt, and/or misroute US communications, which in turn allow them to engage in espionage and other harmful activities against the United States."

The FCC also said the national security landscape has changed since China Telecom entered the US market almost two decades ago, the company showed a lack of "candor, trustworthiness, and reliability" when dealing with US authorities, as well as breaking two of five provisions in a 2007 letter of assurance, and it was not possible to mitigate the expressed concerns.

"Today, based on the totality of the extensive unclassified record alone, the commission's public interest analysis finds that the present and future public interest, convenience, and necessity is no longer served by China Telecom Americas' retention of its section 214 authority," the FCC said before also stating the classified material backed up its decision.

Elsewhere in America on Tuesday, the Republican sections of the Senate Committee on Commerce, Science, and Transportation released a report that said Seagate sold hard drives to Huawei without the required licence.

"The investigation found that Seagate flouted the regulation designed to protect US national security by making unlawful transactions with Huawei for as long as one year, allowing the company to gain significant profits as it monopolised the market," the GOP members said.

The report said Huawei spends $800 million annually on drives and Seagate holds a "large part" in supplying them.

"Based on the evidence available to Minority Staff, it appears that Seagate Technology knowingly violated the Foreign Direct Product Rule for more than one year," the report states.

"Seagate likely made the strategic calculation to continue violating national security regulations based on the prospect of earning significantly greater profits through market monopolisation than the potential cost of regulatory penalties. All unlicensed shipments of prohibited products to Huawei should cease without delay."

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