China syndromeChinese Govt.-Controlled Telecoms Operated in the U.S. with Little or No U.S. Government Oversight

Published 10 June 2020

A bipartisan report released Tuesday by the Senate investigative panel found that U.S. government officials had “exercised minimal oversight” of the risks posed by three Chinese telecom companies which have operated on American communications networks for nearly twenty years. The Trump administration took steps to limit the ability if Huawei and China Telecom to operate in the United States, but U.S. officials have failed to keep an adequate watch on three other Chinese government-controlled companies — China Unicom Americas, China Telecom Americas, and ComNet (USA).

On Tuesday, 9 June, Senators Rob Portman (R-Ohio) and Tom Carper (D-Delaware), the Chairman and Ranking Member of the Permanent Subcommittee on Investigations (PSI), released a new bipartisan report detailing how the federal government provided little-to-no oversight of Chinese state-owned telecommunications carriers operating in the United States for nearly twenty years.  As demonstrated in recent PSI investigations, China routinely exploits the American education and scientific research sectors to further its national interest and engages in cyber-attacks against U.S. companies, like Equifax and Marriott.  This report reveals how the telecommunications industry has been similarly targeted. 

In May 2019, the Federal Communications Commission (FCC) denied China Mobile USA’s application to provide international telecommunications services.  The FCC found that because of its Chinese government ownership, allowing China Mobile USA to operate in the United States would create an unacceptable risk to our national security.  This marked the first instance in which the FCC denied an application on national security grounds.   

The Subcommittee reviewed three other Chinese government-owned telecom companies, all authorized by the FCC to provide similar services China Mobile USA applied (and was denied permission) to provide.  The Subcommittee’s year-long investigation found that the FCC and “Team Telecom”— an informal group comprised of officials from the Departments of Justice, Homeland Security, and Defense — have failed to monitor these three Chinese government-owned carriers.  China Telecom Americas, China Unicom Americas, and ComNet USA have been operating in the United States since the early 2000s.  The Subcommittee’s report documents how Team Telecom had little engagement with China Telecom Americas and ComNet USA, until recently.  Team Telecom has only visited the two carriers twice in more than a decade.  The Subcommittee also found that Team Telecom had no oversight of or interaction with China Unicom Americas since the FCC authorized it to provide international telecom services in 2002.