U.S. failed to properly oversee Chinese telecom carriers: Senate panel

[June 09, 2020]  By David Shepardson

WASHINGTON (Reuters) - A U.S. Senate report released Tuesday says the U.S. government failed to properly oversee Chinese-owned telecommunications companies for nearly two decades.

The report from the Senate's Permanent Subcommittee on Investigations says the U.S. government "provided little-to-no oversight of Chinese state-owned telecommunications carriers operating in the United States for nearly twenty years."

It faulted the Federal Communications Commission (FCC) and "Team Telecom" - an informal group comprised of officials from the Justice, Homeland Security, and Defense Departments - in their oversight of China Telecom (Americas) Corp <728.HK>, China Unicom (Americas) <0762.HK>, and Pacific Networks Corp, which all received FCC approval for U.S. operations about two decades ago.

In April, the FCC issued show-cause orders requiring the three state-owned Chinese carriers to explain why the agency should not revoke their authorization to operate in the United States. All three carriers have urged the FCC not to do that.

The report urged the FCC to quickly decide whether to revoke the three Chinese carriers' authorizations.

"Federal agencies have done little to protect the integrity of U.S. telecommunications networks and counter national security threats from China," the panel's chairman, Rob Portman, a Republican, said in a statement.

The company logo of China Telecom is displayed at a news conference in Hong Kong, China August 20, 2018. REUTERS/Bobby Yip

The panel's top Democrat, Tom Carper, said the report shows "how we've allowed Chinese government-owned companies gain a foothold in our telecommunications industry while their American competitors face significant barriers to entry in China."

In May 2019, the FCC denied approval for another Chinese carrier, China Mobile Ltd <0941.HK>, to operate in the United States, citing national security concerns.

An FCC spokesman said the commission looks forward to reviewing the Senate report.

Team Telecom until recently conducted limited oversight of the Chinese state-owned carriers and had no interaction with China Unicom Americas since the FCC's authorization in 2002, the report found.

The White House issued an executive order in April to formalize Team Telecom's scrutiny of foreign telecommunications firms, but the panel wants Congress to grant formal legislative authority to "provide for greater oversight over foreign carriers."

(Reporting by David Shepardson. Editing by Gerry Doyle)

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