The U.S. Court of Appeals for the D.C. Circuit has rejected China Telecom's appeal of its designation as a supplier of suspect tech that the U.S. government will not fund with subsidies for new broadband buildouts, and that must be ripped and replaced from existing networks.

That is according to Federal Communications Commission chair Jessica Rosenworcel — the D.C. Circuit had not posted its opinion to the court website at deadline.

“The FCC is determined to protect the security of the nation's communications networks and services,” Rosenworcel said of the decision by a three-judge panel of the D.C. Circuit. “I am pleased with today's ruling, which upholds our decision last year to revoke and terminate China Telecom’s authority to provide communications service in the United States. 

“This action was based on the recommendation of national security agencies that found that China Telecom’s operations in the U.S. provided opportunities for increased Chinese state-sponsored cyber-activities, including economic espionage and the disruption and misrouting of U.S. communications traffic,” she said. ”There is no higher FCC responsibility than safeguarding our networks, and today’s ruling is a strong affirmation of our authority to do so.”

Also: China Telecom Has Some Explaining to Do

In 2020, The Trump FCC under chairman Ajit Pai, and on the recommendation of other executive branch agencies, essentially launched the revocation process by asking China Telecom to demonstrate why it should not have its license revoked. The Biden FCC, under then-acting chair Rosenworcel, defended that process.

China Telecom responded, saying that the revocation proceeding should have been conducted via a more formal hearing or in-person hearing before an administrative law judge, rather than through dueling written comments. But the FCC was unpersuaded and began the official revocation proceeding, asking the executive branch agencies to provide written comments on what it thought of China Telecom’s response. Their initial view of the company was that there were “substantial and unacceptable national security and law enforcement risks associated with [China Telecom’s] continued access to U.S. telecommunications infrastructure.”

China Telecom appealed the FCC decision to the court, which the FCC strongly defended, and the court panel this week agreed.

China Telecom could appeal the panel’s decision to the full appeals court or to the Supreme Court. ▪️

The FCC has expanded the list of foreign companies whose tech is not welcome in U.S. networks.

The Secure and Trusted Communications Networks Act required the FCC to identify tech companies -- and their subsidiaries and affiliates -- whose products and/or services posed a national security threat.

The FCC said Friday that AO Kaspersky Lab, China Telecom (Americas) Corp., and China Mobile International USA Inc. have all been added to the "covered list" the FCC must publish and maintain.

Also: Huawei Says FCC Ban Could Be Unconstitutional

Huawai and ZTE were the first to make the list along with Hytera Communications Corp., Hangzhou Hikvision, and Dahua. This week's trio marks the second wave of untrusted companies by the reckoning of the FCC's Public Safety and Homeland Security Bureau.

“Today’s action is the latest in the FCC’s ongoing efforts, as part of the greater whole-of-government approach, to strengthen America’s communications networks against national security threats, including examining the foreign ownership of telecommunications companies providing service in the United States and revoking the authorization to operate where necessary," said FCC Chairwoman Jessica Rosenworcel.

“The FCC’s decision to add these three entities to our Covered List is welcome news," said Commissioner Brendan Carr. "The FCC plays a critical role in securing our nation’s communications networks, and keeping our Covered List up to date is an important tool we have at our disposal to do just that....I applaud Chairwoman Rosenworcel for working closely with our partners in the Executive Branch on these updates. As we continue our work to secure America’s communications networks, I am confident that we will have more entities to add to our Covered List." ■

The Federal Communications Commission has voted to revoke the authority of China Telecom Americas to provide telecommunications services between the U.S. and other countries.

“The commission’s public-interest analysis finds that the present and future public interest, convenience, and necessity is no longer served by China Telecom Americas’ retention of its Section 214 authority,” said the FCC Tuesday (Oct. 26). Section 214 of the Telecommunications Act states when and how telecom carriers can extend, change or discontinue the services they offer, subject to FCC or state regulations. 

Also Read: FCC Flags More Chinese Telecoms

To help China Telecom’s U.S. customers transition to other mobile services, the FCC will produce a consumer guide, including in Chinese, to outline those options. It will send the guide to media outlets so they can help spread the word.

Last December, the FCC voted unanimously to initiate a revocation proceeding against the company after a number of federal agencies, in what used to be called the Team Telecom national security review, recommended revocation. The FCC suggested revocation was warranted based on those agencies’ conclusion that the company posed “substantial and unacceptable national security and law enforcement risks associated with [China Telecom Americas’] continued access to U.S. telecommunications infrastructure.‘ ”

The agencies cited the company's control by the Chinese government, its alleged failure to take all possible steps to protect its records and alleged misrepresentations about its cybersecurity practices.

China Telecom appealed, then sued.

A court agrees with the FCC that China Telecom was premature in asking the court to review the FCC's initiation of license revocation proceedings.

That FCC asked the court to dismiss the China Telecom request as premature since license revocation proceedings had not concluded so there was not final agency action to challenge.

A three judge panel of the U.S. Court of Appeals for the Fourth Circuit Court unanimously agreed, saying it could only exercise its jurisdiction over such final action and the FCC order in question is "neither a final agency action nor an appealable interlocutory or collateral order.

China Telecom can go back to the court when the FCC action is final.

Also Read: FCC Tells Court to Deny China Telecom Appeal

On the recommendation of other executive branch agencies, the Trump FCC under chairman Ajit Pai a year ago launched the process by asking China Telecom to demonstrate why it should not have its license revoked.

China Telecom responded, but the FCC was unpersuaded and began the official revocation proceeding, asking the executive branch agencies to provide written comments on what it thought of China Telecom's response. Their initial view of the company was that there were "substantial and unacceptable national security and law enforcement risks associated with [China Telecom’s] continued access to U.S. telecommunications infrastructure."

China Telecom appealed the FCC order to the U.S. Court of Appeals for the Fourth Circuit, saying that the revocation proceeding should be conducted via a more formal hearing or in-person hearing before an administrative law judge, rather than through the dueling written comments.

Also Read: FCC Flags More Chinese Telecoms

The FCC under Pai's successor, acting chairwoman Rosenworcel, defended the license revocation process.

The FCC has pointed out that it can always decide to add supplemental processes, presumably including in-person queries or more formal inquiry after it reviews the full comment record.”

The FCC continues to signal that nothing has changed in the change of administrations, at least when it comes to a proceeding to pull the license from China Telecom so it can no longer connect with U.S. networks.

That came in its response to China Telecom's petition to the court to review the FCC's framework for adjudicating its fitness as an FCC licensee.

Also Read: China Telecom Has Some Explaining to Do

The FCC, then and now, views the Chinese telecom as a potential national security threat, as do the other government agencies included in national security reviews of foreign actor involvement with U.S. communications.

That was out of concern that current or potential Chinese government influence could make the company a  threat to the security of critical 5G nets in the U.S.

The Trump FCC under chairman Ajit Pai a year ago, on the recommendation of other Executive Branch agencies, essentially launched the process by asking China Telecom to demonstrate why it should not have its license revoked. The FCC under acting chair Jessica Rosenworcel is defending that process.

China Telecom responded, but the FCC was unpersuaded and began the official revocation proceeding, asking the executive branch agencies to provide written comments on what it thought of China Telecom's response. Their initial view of the company was that there were "substantial and unacceptable national security and law enforcement risks associated with [China Telecom’s] continued access to U.S. telecommunications infrastructure.”

Related: FCC Flags More Chinese Telecoms 

China Telecom will then have a chance to respond to those comments.

China Telecom appealed the FCC order to the U.S. Court of Appeals for the Fourth Circuit, saying that the revocation proceeding should be conducted via a more formal hearing or in-person hearing before an Administrative Law Judge, rather than through the dueling written comments.

The FCC argues that the decision on how to conduct a proceeding is not a final agency action--as would, say, a final decision to revoke the license at the and of the process--and so the China Telecom suit should be rejected as premature or, alternatively, denied.

The FCC pointed out that it can always decide to add supplemental processes, presumably including in-person queries or more formal inquiry after it reviews the full comment record.

The FCC has told the U.S. Court of Appeals for the Fourth Circuit that China Telecom Americas' appeal of the FCC's launch of a revocation proceeding against the company is premature.

That is because the launch of a proceeding is not an appealable final decision, it told the court according to a copy of the motion to dismiss the FCC filed with the court.

Also Read: China Telecom Touts Security

"The Court lacks jurisdiction over China Telecom’s challenges because the underlying administrative proceeding is still ongoing and the [order] challenged here is not final agency action subject to review at this time," the FCC said. 

China Telecom challenged the proceeding itself because it is being conducted via a "paper hearing"--primarily through document submissions rather than a standard adjudication procedure. But the FCC said it still must wait until it issues a decision in that "paper hearing" before challenging it.

Also Read: China Telecom Has Some Explaining to Do

Last December, the FCC voted unanimously to initiate a revocation proceeding against the company after a number of federal agencies,* in what used to be called the Team Telecom national security review, recommended revocation. The FCC suggested revocation was warranted based on those agencies' conclusion that the company posed 'substantial and unacceptable national security and law enforcement risks associated with [China Telecom Americas’] continued access to U.S. telecommunications infrastructure.'"

The agencies cited the company's control by the Chinese government, its alleged failure to take all possible steps to protect its records and alleged misrepresentations about its cybersecurity practices.

Also Read: FCC Flags More China Telecoms

As with ZTE and Huawei, whose tech the FCC has tentatively found to be suspect and in need of replacing, the FCC's issues with China Mobile were concerns that current or potential Chinese government influence could make them a national security threat to the network security of critical 5G nets in the U.S. 

* Recommending revocation were the Departments of Justice, Homeland Security, Defense, State, Commerce, and the U.S. Trade Representative.

China Telecom (Americas) appears to be working hard to try and prevent the FCC from revoking its licenses to operate in the U.S.

On Thursday (Dec. 10), the FCC voted unanimously to initiate a revocation proceeding against the company after several federal agencies recommended that action, citing the company as a national security threat. The FCC suggested such revocation was warranted "based on the 'substantial and unacceptable national security and law enforcement risks associated with [China Telecom Americas’] continued access to U.S. telecommunications infrastructure.'"

Also Read: FCC Says China Telecom Has Some Explaining to Do

On the same day the FCC voted to launch the revocation proceeding, China Telecom (Americas) announced that it had been accepted into the Mutually Agreed Norms for Routing Security (MANRS). MANRS is "a global initiative, supported by the Internet Society, that provides crucial fixes to reduce the most common routing threats."

"Even though internally it is always clear to us that we are committed to providing the most secure and reliable networks for our customers, joining MANRS is an unequivocal demonstration to the outside world of that commitment," said company president Xu Tan in a statement.

Also Read: FCC Flags More Chinese Telecoms

In April, the FCC issued a "show cause" order to China Telecom (Americas) directing it to justify why the FCC should not start revocation proceedings.

As with ZTE and Huawei, whose tech the FCC has tentatively found to be suspect and in need of replacing, the FCC's issues with China Mobile were concerns that current or potential Chinese government influence could make them a national security threat to the network security of critical 5G nets in the U.S.

China Telecom's announcement also came the same day the FCC made it official that Huawei tech would be excluded, ripped and replaced from any U.S. nets funded with government money.

The FCC has denied Huawei's appeal of the FCC's designation of the Chinese telecom as a suspect tech supplier and a threat to national security whose tech must be scrubbed from U.S. networks.

The FCC had already tentatively concluded as much, but Huawei had appealed the decision to deny broadband subsidy money to any network building out using Huawei technology.

Related: FCC's Denies ZTE Appeal

The FCC voted Thursday (Dec. 10) to approve the final designation of Huawei as on the list of threats to the security and integrity of national networks and the supply chain.

The vote came the same day the FCC voted on the framework for identifying other national security tech threats, preventing them from getting Universal Service Fund government broadband subsidies, and removing their tech  from existing networks.

FCC, Huawei Square Off in Court Briefs

The order concludes that the FCC has sufficient and independent authority to designate Huawei as a threat, and finds that the Secure and Trusted Network Communications Act did not undermine the FCC's authority, and that the FCC gave Huawei plenty of opportunity to participate in process of determining its status.

Commissioner Brendan Carr, who said Huawei was effectively under the control of the Chinese Communist Party, said the move would protect American networks. "We should treat Huawei as nothing short of a threat to our collective security.

Commissioner Jessica Rosenworcel called the decision "clear and correct." Starks called it "critically important work."

FCC chairman Ajit Pai pointed out that the company was subject to sweeping Chinese intelligence laws and was forbidden to disclose its assistance to the government. He said a "laundry list" of evidence required the commission to take its action.

China Unicom Americas (CUA) said that if the FCC evaluates the company on the merits and fact, it will find that the telecom is a stand-alone operation that adheres to U.S. law, rules and regulations and poses no threat to U.S. network security. 

That came in a response to the FCC, which gave the company until June 1 to explain why the FCC should not kick it out of U.S. networks.  

 Related: FCC Targets Other Chinese Telecoms

The FCC had issued a show cause order to it and other Chinese telecoms, stemming from what the FCC said was "our deep concern—one shared by the U.S. Departments of Commerce, Defense, Homeland Security, Justice, and State and the U.S. Trade Representative—about [this company's] vulnerability to the exploitation, influence, and control of the Chinese Communist Party, given that they are subsidiaries of Chinese state-owned entities." 

The FCC said the U.S. "simply cannot take a risk and hope for the best when it comes to the security of our networks.” 

It has also issues such orders to China Telecom (Americas), Pacific Networks and ComNet.  

In its response to the FCC, CUA said that it is not subject to undue Chinese government influence, pointing out that it no director or executive had been appointed by that government and that its current president was recruited through a competitive process.  

China Telecom Americas is registered in California and operates out of the D.C. suburb of Herndon, Va. It provides "global integrated telecommunications services including international data networking, voice, IP and value added solutions." 

"CUA has never received any instructions regarding how to run its operations from the Chinese government," it said.  

CUA said its response to the FCC "show cause" order, a mandate to show cause as to why the FCC should not pull its license, contained "extensive documentation supporting that CUA will not pose risks to the national security of the U.S., including its ownership, governance, and clean track record." 

It also said it would be willing to talk to law enforcement or the FCC about resolving any issues or concerns, including signing a national security agreement.  

"Threatening to abruptly end CUA operations would destroy the jobs of U.S. citizens and permanent residents, threaten financial losses for U.S. investors and cause economic disruption for U.S. companies who rely on CUA services," it told the FCC.  

FCC commissioner Brendan Carr said it is time for the U.S. government to reconsider its relationship with companies that are owned or controlled by the People’s Republic of China.

Related: Huawei Says FCC Band Could Be Unconstitutional 

That came after the Trump Administration this week recommended that the FCC pull the license of one China Telecom to connect to U.S. networks, a move he "welcomed." 

Carr said a lot has changed since the FCC first started letting China Telecom connect to U.S. networks. 

He said there is "substantial evidence" that the Chinese government wants to surveil Americans as well as evidence that China Telecom "has hijacked traffic in the U.S. and routed it through China before delivering it to destinations back in America." 

He said he looked forward to the FCC following the Administration's recommendation and go beyond that to "further secure America’s networks from bad actors that would do us harm." 

The FCC has already taken steps to crack down on Chinese telecoms, denying a request  by China Mobile to "provide telecommunications services between the U.S. and 'foreign destinations," and excluding networks with Huawei and ZTE tech and other allegedly suspect tech from getting government broadband subsidy money something Congress supports.