China Telecom has been unsuccessful in getting a U.S. federal appeals court to temporarily block an FCC decision that revoked the company’s authority to operate telecom services in the country.
On Thursday the U.S. Court of Appeals for the District of Columbia denied China Telecom’s emergency motion, filed in November, that sought to halt the FCC order pending a judicial review. Under the FCC order China Telecom has to discontinue services by January 3, 2022, and the company said it would need to notify customers by tomorrow, December 4.
China Telecom last month asked the appeals court to put the FCC decision on hold.
If the court didn’t temporarily stay the order, China Telecom said it would “be forced to cease significant operations, irreparably harming its business, reputation, and relationships,” according to the November 15 motion.
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The FCC on October 26 voted unanimously to withdraw and terminate China Telecom Americas’ authority based on recommendations from the U.S. executive branch agencies and the FCC’s own review that found national security risks stemming from the Chinese government’s influence and control over the company.
“Our record makes clear that China Telecom Americas operates as a subsidiary of a Chinese state-owned enterprise and as such the Chinese government has the ability to influence and control its actions,” said FCC Chairwoman Jessica Rosenworcel at the time. “That could lead to real problems with our telecommunications networks through surveilling information, misrouting traffic, or disrupting service.”
The Commission also found that China Telecom wasn’t trustworthy in its own representations to the agency, to the point that mitigation efforts wouldn’t be enough.
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After the order was released, China’s Ministry of Industry and Information Technology put out a statement saying the U.S. has repeatedly sanctioned Chinese companies on the grounds of national security and disregarding facts.
“This is an unreasonable suppression of Chinese enterprise by abuse of state power and a serious breach of international economic trade rules,” the Chinese agency said last month, in a statement published by Reuters.
In court fillings China Telecom pointed to slow action by the FCC, which started a proceeding to revoke the company’s authority back in 2020. That came after U.S. agencies led by the Department of Justice recommended action by the FCC.
“A temporary stay would justly preserve the longstanding status quo for a relatively short time and, in turn, let this Court review the Commission’s unprecedented action,” China Telecom stated in court filings.
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China Telecom has been authorized for telecom services in the U.S. for almost 20 years. Customers include U.S. and Chinese enterprises, other telecommunications carriers, and consumers of its mobile service resale business. The company largely relies on other carriers’ facilities and services.
In March the FCC moved forward to terminate three more Chinese telecom companies authorizations to operate in the U.S. based on national security concerns, including China Unicom, Pacific Networks and ComNet. China Mobile’s application to provide telecom services between the U.S. and foreign destinations was denied by the FCC in 2019 in a unanimous vote.
The FCC also is in the process of a $1.9 billion rip and replace reimbursement program to help service providers remove existing Huawei and ZTE telecom gear in U.S. networks, after the commission deemed both companies national security risks.