Senate report says U.S. failed for years to monitor Chinese telecom companies

Several Chinese telecommunications companies have operated in the United States for years without adequate federal oversight, a bipartisan Senate report warned Tuesday.

The Senate Homeland Security & Governmental Affairs Permanent Subcommittee on Investigations found that the U.S. government cited national security concerns in 2019 when it rejected China Mobile USA's request to offer international telecommunications services. But three other Chinese businesses had long-before been permitted to offer similar services in the U.S. and did not face significant government scrutiny.

"The Subcommittee’s year-long investigation found that the FCC and 'Team Telecom'— an informal group comprised of officials from the Departments of Justice, Homeland Security, and Defense — have failed to monitor these three Chinese government-owned carriers," the committee said. 

"The Subcommittee’s report documents how Team Telecom had little engagement with China Telecom Americas and ComNet USA, until recently," according to committee's press release. "Team Telecom has only visited the two carriers twice in more than a decade. The Subcommittee also found that Team Telecom had no oversight of or interaction with China Unicom Americas since the FCC authorized it to provide international telecom services in 2002."

The press release notes that the national security issues regarding China Mobile USA are also relevant regarding the Chinese telecom companies that are functioning in the U.S.  

Subcommittee Chairman Sen. Rob Portman (R-OH) and Ranking Member Tom Carper (D-DE) in their statements noted the dearth of government oversight and the importance of American national security.

"Today’s report highlights 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," Carper said.

"In recent months, and in response to this investigation, the federal government has begun to do more, including an important Executive Order by the President to ensure foreign-owned carriers are properly monitored and reviewed," Sen. Portman said according to a statement.

Once one of the businesses has been authorized to operate it does not ever need to be reauthorized as the "authorizations can exist in perpetuity." One of the recommendations provided is that Congress "should require the periodic review and renewal of foreign carriers’ authorizations to provide international telecommunications services."

There has been some movement recently on the issue of these types of Chinese companies operating in the U.S.

"On April 9, 2020, the Executive Branch, led by Team Telecom, recommended that the FCC revoke China Telecom Americas’ authorizations to provide international telecom services because of 'substantial and serious national security concerns,'" the committee's press release noted. 

The FCC on April 24, 2020 demanded several Chinese companies "demonstrate why the FCC should not initiate proceedings to revoke the existing authorizations," it also noted. "The FCC is currently considering the carriers’ responses and whether to proceed with revocation."