US threatens to block China Telecom from its market

WASHINGTON (AFP) - The United States has threatened to cut off Beijing-controlled China Telecom from serving the US market because of legal and security risks, announced the Justice Department.

A recommendation by the government’s top departments, including Defence, State and Homeland Security, said the Federal Communications Commission (FCC) should “revoke and terminate” all authorisations for the Chinese giant’s US subsidiary, China Telecom (Americas), to provide international telecommunications services to and from the United States.

“The Executive Branch agencies identified substantial and unacceptable national security and law enforcement risks associated with China Telecom’s operations, which render the FCC authorisations inconsistent with the public interest,” the Justice Department said in a statement Thursday. If approved, the move could mean China Telecom’s hundreds of millions of phone and internet customers - it is China’s second largest mobile phone operator could lose connectivity with or through the United States.

The agencies making the recommendation -- which also included the Justice Department, the Commerce Department, and the US Trade Representative  said China Telecom is vulnerable to “exploitation, influence and control” by Beijing.

The agencies also made the recommendation based on “the nature of China Telecom’s US operations,” which they said allow Chinese government actors “to engage in malicious cyber activity enabling economic espionage and disruption and misrouting of US communications.”

The recommendation has to be decided upon by the FCC, but will almost certainly involve the White House, where it could be weighed amid ongoing trade negotiations with Beijing.  Yesterday, the Chinese foreign ministry said it was “firmly opposed” to the recommendation. 

“We urge the US to abide by market principles, stop its wrong practices of using national security as a catchphrase and politicising commercial matters, as well as stop unfairly suppressing Chinese enterprises,” spokesman Zhao Lijian said.