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WASHINGTON -- Sens. Charles Schumer and Tom Cotton on Monday asked the Federal Communications Commission to consider whether two big Chinese telecommunications companies should be barred from operating in the U.S.

Schumer, D-N.Y., and Cotton, R-Ark., cited national security concerns in a letter asking the FCC to review the licenses that give China Telecom and China Unicom the right to use networks in the United States.

In the letter, they said the two Chinese government-linked telecom operators could use their access to "target" Americans' communications. The senators warned that the companies could reroute communications traveling on their networks through China. The text of the letter was obtained by The New York Times.

President Donald Trump in recent weeks has seemed open to pulling back on some restrictions on Chinese technology firms as part of trade negotiations with China. But the senators' focus on two previously untouched firms shows that efforts by lawmakers to restrict Chinese technology firms are expanding.

The U.S. has levied $360 billion in tariffs on Chinese goods, moved to block the ability of U.S. companies to export their technology to China, and tried to stop certain products linked to the Chinese government from being sold in America.

National security officials have been worried for years that the Chinese government could use its companies to gain access to crucial telecommunications infrastructure. Those concerns have become more prominent as carriers in the United States and in China race to launch next-generation 5G wireless networks.

U.S. regulators have targeted Chinese telecom companies in the name of security.

In May, the FCC denied an application from China Mobile to operate in the United States. Ajit Pai, the commission's chairman, said at the time that there was a risk that the Chinese government would use the carrier to "conduct activities that would seriously jeopardize the national security, law enforcement, and economic interests of the United States."

But China Unicom and China Telecom have retained the ability to operate in the United States. Both have licenses that were granted by the FCC in the early 2000s, but some regulators have said that they should be re-examined even though the companies are smaller than China Mobile.

Brendan Carr, a Republican commissioner on the FCC, said in May that the agency should go "even further" than denying China Mobile's application and should look at the other two companies. A Democrat on the commission, Geoffrey Starks, said that the "national security environment has changed" since the firms were allowed access to networks in the United States.

Some experts disagreed with the idea that cutting off China Unicom and China Telecom would protect national security, in part because those firms largely serve companies that do business in China as well as some Chinese consumers in the United States.

"They're not operating in the sense of a Bell company, or a T-Mobile, or a Verizon; they don't compete in the U.S.," said James Lewis, a senior vice president at the Center for Strategic and International Studies. "I think it's overblown."

The United States has employed many tactics in trying to check China's tech sector since Trump's 2017 inauguration.

The Committee on Foreign Investment in the United States, the panel that vets deals between U.S. and foreign firms, said in 2018 that the acquisition of the chipmaker Qualcomm by then Singapore-based Broadcom could have limited America's ability to compete. The same panel demanded this year that a Chinese gaming company sell the gay dating app Grindr.

The administration has been especially aggressive in cutting off Chinese telecom companies' access to U.S. customers. It temporarily banned the networking manufacturer ZTE from buying U.S. products in 2018. Earlier this year, it placed Huawei on a Commerce Department list of businesses to which U.S. companies cannot export goods.

Some of the Huawei restrictions are expected to take effect in November, but the White House has reconsidered its Chinese telecom restrictions under pressure from U.S. companies and the Chinese government during on-again, off-again trade negotiations.

After Chinese President Xi Jinping appealed on ZTE's behalf, Trump interceded with his administration to reverse the ban. In trade negotiations this summer, the administration expressed a willingness to back down from some of the restrictions it had placed on Huawei.

But lawmakers have been taking their own steps to put pressure on the companies.

"If we're serious about this, we need to have something with teeth," said Sen. Chris Van Hollen, D-Md. "Making a statement may have symbolic importance, but it does nothing to address the real issues."

Business on 09/17/2019

Print Headline: China telecom firms' FCC review sought by Schumer, Cotton


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