PRC says FCC decision to pull China Telecom license was ‘based on suspicion,’ not facts

China said the U.S. decision last month to revoke the China Telecom Americas operating license was misguided and based on ‘suspicion,’ not any specific facts. The Federal Communications Commission voted unanimously to revoke the Chinese telecom giant's operating license on Oct. 26, citing national security concerns.

“The American subsidiary of China Telecom has been operating in the United States for nearly 20 years,” the Ministry of Industry and Information Technology said in a written statement. “The U.S. revoked its 214 license based on subjective speculation and suspicion without listing the specific facts of violations of law by our company. This does not conform to the image of a market-oriented country.”

When the FCC announced its decision it said one of its concerns was that China Telecom was a subsidiary of a state-owned enterprise, which raised the possibility that the company could provide the Chinese government with a conduit for cyber attacks against the U.S.

Chinese hackers are thought to have been behind this year's massive Microsoft Exchange hack. In that case, intruders helped themselves to emails, calendar entries, and contacts from on-site Exchange users and then launched a second wave of attacks to vacuum up Exchange data from tens of thousands of unsuspecting victims. Both the White House and Microsoft said publicly that Chinese government-backed hackers were behind the attack.

China has also been accused of secretly redirecting internet traffic. Back in 2018, Oracle's Internet Intelligence unit and researchers at the U.S. Naval War College and Tel Aviv University accused China of hijacking and detouring internet traffic through its normally-closed internet infrastructure.

On Wednesday, NSA Director Gen. Paul Nakasone told an audience at the Aspen Security Forum in Washington that cyber attacks launched against the U.S. this year are at a “scope and scale that is different” than anything he has seen before. “We’re seeing not just nation states but proxies and criminals operating in cyberspace,.” he said, without providing any additional detail. He added that China was “a nation state that has a different risk analysis” than America's traditional adversaries, like Russia.

China Telecom is the PRC’s largest telecommunications company and it offers, among other things, wireless services in this country that are largely marketed to Chinese Americans and Chinese tourists who travel to the U.S. and want to bring their phones with them. 

When the decision to pull the license was announced, FCC Commissioner Brendan Carr said in a statement that China Telecom’s interactions with the FCC as it conducted a review of its operations were disingenuous. He said the company “lacked candor and trustworthiness.”

Thursday’s statement from the Chinese Ministry said that the U.S. has repeatedly sanctioned Chinese companies on national security grounds and this was “an unreasonable suppression of Chinese enterprises and an abuse of state power.” The Ministry called on the U.S. to treat Chinese companies more fairly and “stop the wrong practice of generalizing the concept of national security.”