China Telecom must quit US by early Jan after appeal fails

China Telecom must quit US by early January after appeal fails

03 December 2021 | Alan Burkitt-Gray

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China Telecom must cease all operations in the US by early January, after it lost a bid to appeal against revocation of its licence.

The company had applied to the US Court of Appeals for the District Columbia against a decision in October by the Federal Communications Commission (FCC) to cancel its 20-year-old licence to operate in US territory.

But the court declined the bid to block the FCC order, though it might carry out a full review of the legal challenge.

However, the FCC’s ruling stands, and China Telecom Americas – the company’s US-based operation – has already warned customers that it “will be forced to cease significant operations, irreparably harming its business, reputation, and relationships”.

According to Reuters last night China Telecom provides services to Chinese government facilities in the US and it has warned the FCC action would force it “to end its entire resold mobile resale service in the US”.

The ban covers communications services within the US and international communications, all of which are regulated by the Communications Act of 1934. China Telecom has not commented on the move.

The ban on China Telecom was proposed by the FCC in April 2020, during the Trump administration, because of concerns about national security.

The FCC told China Telecom, plus China Unicom and two subsidiaries of Chinese state-owned CITIC that they must show cause why their licences should not be revoked.

The decision to implement the ban was the first that Jessica Rosenworcel (pictured) took in October when she was confirmed as chairwoman of the FCC. She said then that the other operators – China Unicom and the two CITIC offshoots, Pacific Networks and ComNet – were next on the list.

“We are moving expeditiously to complete our security reviews for similarly situated carriers like China Unicom Americas, Pacific Networks, and ComNet,” she said in October.

That announcement followed the May 2019 decision by the FCC to reject China Mobile’s application for a licence to provide services to and from the US – a rejection that came eight years after China Mobile first applied for a licence under section 214 of the Communications Act.

China Telecom Americas has been led since 2004 by Luis Fiallo, based in Washington DC. In April 2021, faced with exclusion from the US, he announced plans to develop the company’s IP backbone infrastructure to new PoPs in Argentina, Brazil, Chile, Mexico, Panama and Peru over the next three years.

“Latin America is an exciting market for our company. Based on the success of our Brazil operations, we are confident that other key cities across the region will result in commercial success,” he said.