US officials: China Telecom should lose license

A US inquiry into China Telecom's operations found "substantial and unacceptable national security and law enforcement risks," the US Justice Department said on Thursday. Based on the the review, the US judiciary recommended revoking the company's license to provide international telecommunication to and from the US.

The decision was endorsed by the US Departments of Defense, State, Homeland Security, Commerce, as well as the United States Trade Representative.

China Telecom is a US subsidiary of China's state-owned telecommunications company.

"Today, more than ever, the life of the nation and its people runs on our telecommunications networks," said John C. Demers, Assistant Attorney General for National Security. "Today's action is but our next step in ensuring the integrity of America’'s telecommunications systems."

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Demers noted that data security "depends on our use of trusted partners from nations that share our values and our aspirations for humanity."

The decision on revoking the licence, obtained in 2007, would be made by the Federal Communications Commission (FCC).

'Vulnerable to exploitation, influence'

The US Justice Department said that one of the factors behind the recommendation from the various US agencies involved was the "increased knowledge of [China's] role in malicious cyber activity targeting the United States."

They also noted "concerns that China Telecom is vulnerable to exploitation, influence, and control" from Beijing, and said "the nature" of the firm's US operations provided opportunities for China's state actors "to engage in malicious cyber activity enabling economic espionage and disruption and misrouting of US communications."

China Telecom did not immediately comment. 

Chinese telecommunications companies have recently come under heightened scrutiny in the US, according to the Reuters news agency.

In September last year, Democratic Senator Chuck Schumer and Republican senator Tom Cotton urged the FCC to review the authorizations issued for China Telecom and China Unicom, a mobile service provider. The two lawmakers raised concerns that the companies "have access to our telephone lines, fiber optic cables, cellular networks and satellites in ways that could give it (China) the ability to target the content of communications of Americans or their businesses and the US government."