The Federal Communications Commission (FCC) is launching a large-scale investigation into China-based telecommunications equipment and service providers as its first major action under the agency’s newly formed Council on National Security.
FCC Chairman Brendan Carr announced the move on March 21, saying that some Chinese telecom companies have been making an “end run” around prohibitions placed on them in recent years due to concerns that they pose threats to U.S. national security.
Companies under investigation include Huawei, ZTE, Hytera Communications, Hangzhou Hikvision Digital Technology, Dahua Technology, China Mobile International, China Telecom Corp., Pacifica Networks/ComNet, and China Unicom Operations.
Those firms’ operations were deemed an “unacceptable risk” to U.S. national security because of their close ties to the Chinese government, resulting in the bipartisan Secure and Trusted Communications Network Act which was passed in late 2019.
The legislation provided $1 billion to small private sector telecom providers to remove Huawei and ZTE-made equipment from their networks and replace that gear with equipment from other manufacturers. Smaller telecom providers were often targeted by China-based companies by significantly underbidding other competitors.
Since then, the Federal government has initiated several other “rip and replace” efforts to secure telecom technology from threats posed by companies placed on the FCC’s Covered List – intended to ban sales and the importation of equipment of services and products from listed companies.
“We have reason to believe that, despite those actions, some or all of these Covered List entities are trying to make an end run around those FCC prohibitions by continuing to do business in America on a private or ‘unregulated’ basis,” Carr said in a statement. “We are not going to just look the other way.”
Carr said that the FCC has sent letters of inquiry and at least one subpoena to the companies included on the Covered List, to “assess their current levels of operation.” The commission is also gathering “responsive information” and will decide upon actions needed to “further safeguard America’s networks and promote our national security.”
The FCC’s Council for National Security was propped up by Carr earlier this month to oversee telecom supply chain risks, cyber threats, and emerging technologies with a particular focus on threats posed by China and the Chinese Communist Party.
“It is more important than ever that the FCC remain vigilant and protect Americans and American companies from these threats,” Carr said when announcing creation of the council. “Because these threats now cut across a range of sectors that the FCC regulates, it is important that the FCC’s national security efforts pull resources from a variety of FCC organizations,” he said.
