Regulators have begun legal proceedings that could strip three Chinese state-owned telecommunications companies of their right to operate in the United States, officials said Wednesday, citing national security concerns.
The three firms — China Unicom America, Pacific Networks, and ComNet — had failed to adequately prove their Americas operations were not subject to “undue influence” from Beijing, the Federal Communications Commission said.
Commission officials voted 4-0 at a hearing to begin an investigation, which could see the firms stripped of their right to operate within the US.
“The threat to our networks from entities aligned with Communist China is one that we must address head on, and I am pleased that the FCC continues to show the strength and resolve necessary to meet this menace,” FCC commissioner Brendan Carr said in a statement.
“When it comes to Communist China, we have set a high bar for action over the last few years,” he added.
The move spells more bad news for the embattled firms’ US operations, following a January decision by the New York Stock Exchange to bar them from trading.
In a statement following Wednesday’s ruling, China Unicom — one of the world’s largest carriers — insisted that it has never acted illegally and expected a “thorough, fair and fact-based review of the company’s conduct by the FCC,” Bloomberg reported.
Wednesday’s decision comes amid a broader drive by US regulators to crackdown on Chinese telecoms groups they see as a threat to national security.
Last week, regulators listed tech giant Huawei to a roster of communications companies thought to pose “an unacceptable risk”, signaling that hopes for are set with the United States under President Joe Biden, after the firm was battered by sanctions imposed by Donald Trump’s administration, were unfounded.