China’s Pacific Networks ejected from US by telecoms watchdog

  • The move continues a series of bans on Chinese companies by the FCC, showing the Biden administration remains concerned over potential espionage and data theft
  • The agency previously barred China Unicom Hong Kong and China Telecom (Americas), and refused to let China Mobile enter the US market

The US Federal Communications Commission ejected Pacific Networks Corp. and ComNet (USA) LLC from the US market, continuing a series of bans of Chinese telecommunications companies over security concerns.

Wednesday’s 4-0 vote follows the agency’s January decision to bar China Unicom Hong Kong Ltd.

Last year the agency barred China Telecom (Americas) Corp., and earlier it refused to let China Mobile Ltd. enter the US market.

The move shows potential espionage and data theft by Chinese state-owned companies remains a concern under US President Joe Biden after being elevated as an issue by his predecessor, Donald Trump.

Pacific Networks and ComNet primarily sell retail calling cards in the US, the companies said in a January filing.

Shareholders include investors from the US, the UK and the European Union, the companies said.

“The participation of significant levels of public, international ownership show the companies are very different from a 100 per cent state-owned company not subject to external transparency and accountability requirements,” the companies said in the filing.

Pacific Networks is 100 per cent owned by Citic Telecom International Holdings Ltd., a publicly-listed company on the Hong Kong stock exchange, according to the filing.

Pacific Networks and ComNet earlier told the FCC their operations are not subject to Chinese government control, and had complied with FCC requirements.

Their parent company is state-owned Citic Group Corp.

The FCC’s actions against Chinese carriers have drawn attention in Beijing, with Chinese Foreign Ministry spokesman Zhao Lijian in January saying the US was using security as a pretext to revoke the licence of a Chinese company.

He called it “an abuse of state power to suppress Chinese companies”.

Author: Bloomberg, SCMP

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