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China Unicom and Pacific Network banned by FCC

Jessica Rosenworcel FCC.jpg

The US government last night banned two Chinese companies, China Unicom and Pacific Network, from providing international telecoms services in the country.

The rule, under the Secure Networks Act, also applied to Pacific Network’s wholly owned subsidiary ComNet (USA), and follows an earlier banning of China Telecom at the start of 2022. China Mobile was refused a licence in 2019, but was also banned in March 2022.

The Federal Communications Commission (FCC) declared that China Unicom and Pacific Network were “a threat to national security” and added the companies to its list of communications equipment and services that are banned from the US.

FCC Chairwoman Jessica Rosenworcel (pictured) said: “Today we take another critical step to protect our communications networks from foreign national security threats.”

The list of equipment and services covered by section 2 of the Secure Networks Act – which the FCC calls the “covered list” – now includes five Chinese vendors: telecoms equipment makers Huawei and ZTE, video equipment makers Dahua, Hikvision and Hytera, and four telecoms service providers: China Mobile, China Telecom, China Unicom, ComNet and Pacific Network.

The FCC also added Russian cyber security company Kaspersky Lab to its list in March, after Russia’s unprovoked invasion of Ukraine.

Rosenworcel said: “Earlier this year the FCC revoked China Unicom America’s and PacNet/ComNet’s authorities to provide service in the United States because of the national security risks they posed to communications in the United States. Now, working with our national security partners, we are taking additional action to close the door to these companies by adding them to the FCC’s Covered List. This action demonstrates our whole-of-government effort to protect network security and privacy.”

The FCC claimed “PacNet/ComNet and China Unicom are subject to the exploitation, influence and control of the Chinese government, and the national security risks associated with such exploitation, influence, and control.”

It added: “Today’s actions are part of our ongoing effort to protect and strengthen the integrity of our nation’s critical communications network.”

The move does not necessarily mean China Unicom Americas will have to move out of its office at Dulles Corner Boulevard in Herndon, Virginia. China Telecom Americas also maintains an office in the area, and at International Telecoms Week in May VP Luis Fiallo told Capacity that the unit is focusing on expanding services in the Americas outside the US.

Capacity has contacted China Unicom Americas for a comment on the FCC ban.

ComNet has already terminated calling card services that it provided from California, via a message in Chinese and English on its website.

The FCC said its rules require it “to place on the Covered List any communications equipment or service if a source enumerated in the Secure Networks Act determines that the equipment or service poses an unacceptable risk to the national security of the United States and if the communications equipment or service is capable of posing an unacceptable risk to the national security of the United States”.

It said it had evidence that explains “how PacNet/ComNet and China Unicom, respectively, are subject to the exploitation, influence and control of the Chinese government, and the national security risks associated with such exploitation, influence, and control of the Chinese government, and the national security risks associated with such exploitation, influence, and control”.

LinkedIn identifies at least two VPs of China Unicom Americas. David (Yuchen) Tian is listed as VP, based in Los Angeles, while Chi (Andy) Zhang is VP of its enterprise business, based in the New York area.

Tian has worked in Los Angeles since at least 2003 and before that studied at the University of California, Irvine, gaining a BS degree as a computer engineer. Zhang worked at China’s Ministry of Information Industry in Beijing before moving to the US first to work for China Telecom Americas and China Telecom Global until 2017 and then China Unicom Americas. Capacity has contacted both for comment.