FCC votes to block top Chinese telecom company from US market

FCC votes to block top Chinese telecom company from US market
© Greg Nash

The Federal Communications Commission (FCC) on Thursday voted to block China Mobile, one of the largest telecom companies in the world, from U.S. markets due to national security concerns. 

The 5-0 vote is the latest broadside against Chinese-owned companies hoping to work in the U.S. and escalates the Trump administration's campaign to limit Beijing's influence over the telecommunications industry. 

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The commissioners argued that China Mobile USA is vulnerable to "exploitation, influence and control" by the Chinese government and it would not be in the public interest to allow its entry into U.S. markets. 

"China Mobile ultimately is owned and controlled by the Chinese government," FCC Chairman Ajit Pai, a Republican, said shortly before the vote. "There is a significant risk that the Chinese government would use China Mobile to conduct activities that would seriously jeopardize the national security, law enforcement, and economic interests of the United States."

China Mobile applied to provide services in the United States in 2011, and multiple executive agencies last year recommended that the FCC deny the Chinese telecom giant's application. The company was seeking to provide services for phone calls between the U.S. and other countries. 

The order adopted by the FCC on Thursday says China Mobile USA's ownership and control by the Chinese government raises national security risks that "cannot be addressed through a mitigation agreement." 

The vote sparked disagreement among the commissioners over whether to investigate other Chinese telecom companies operating in the U.S. 

While each of the commissioners voted to deny China Mobile USA's application, several said they believe the FCC is not doing enough to address other telecom companies with ties to the Chinese government. 

Republican Commissioner Brendan Carr called for an investigation into China Unicom and China Telecom, both of which were authorized to connect with U.S. networks in the early 2000s. Pai later in the meeting confirmed that the FCC is looking into those companies' authorizations to operate in the U.S. market.

Carr said the FCC should consider revoking those authorizations, saying the Chinese companies pose similar threats to the U.S.

"Much, if not all, of the reasoning behind today’s decision appears to apply with equal or greater force to those legacy authorizations," Carr said. "Let’s ensure that our decisions from decades past don’t inadvertently endanger American interests." 

But Republican Commissioner Michael O'Rielly said calls to investigate other companies amounted to an "attempt to conflate issues and mangle the situation." 

The China Mobile vote comes as the White House reportedly considers banning U.S. companies from using equipment made by Chinese telecommunications companies Huawei and ZTE over similar national security concerns. The White House has focused most of its ire on Huawei, calling it an arm of the Chinese government.

Updated 3:56 P.M.