FCC blocks China Mobile's application to provide telecom services in US

FCC blocks China Mobile's application to provide telecom services in US

Composed of Democrats and Republicans, the five-member FCC next month is due to vote on an order that, if approved, would deny China Mobile's request to operate. I hope that my colleagues will join me in voting to reject China Mobile's application.

The chairman of the US FCC has urged the agency to reject China Mobile's applications to provide telecom services in the US market on national security grounds, in the latest salvo in the telecom trade war between China and the US.

The Federal Communications Commission (FCC) issued a communication on Wednesday that FCC Chairman Ajit Pai is opposed to and will vote against an application by China Mobile Ltd. (NYSE: CHL) to offer telecommunications services inside the United States.

We've reached out to China Mobile for comment and will update this story if we hear back. The move to ban China Mobile in the U.S. comes amid espionage concerns from Chinese tech companies.

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On July 2, 2018, after a lengthy review of the application and consultation with the US intelligence community, the Executive Branch agencies recommended that the Commission deny China Mobile's application due to substantial national security and law enforcement risks that can not be resolved through a voluntary mitigation agreement. Such facilities would be connected to domestic networks operated by the likes of AT&T and Verizon.

China Mobile USA, which is a DE corporation, first applied for permission in 2011.

FCC officials argued that allowing a company owned by the Chinese government to build interconnection facilities in the U.S. would potentially allow the Chinese government to access USA network traffic and potentially disrupt that traffic. Some governments believe this is a component of the Chinese government's wider project of geopolitical expansion through its companies. The FCC also said China Mobile was indirectly and ultimately owned and controlled by the Chinese government and calls through the company's networks "could be intercepted for surveillance and make the domestic network vulnerable to hacking and other risks". According to a variety of reports, such attacks - reportedly backed by the Chinese government - have occurred for years.

Why this matters FCC officials explained that this is the first time the agency is using Section 214 of the Communications Act and Section 63.18 of its rules to prevent a foreign telecom company from entering the USA market.

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