With a 138-page order, the Federal Communications Commission (FCC) revoked the authority of Pacific Networks and its subsidiary ComNet to operate telecommunications services in the United States. The accompanying news release explained that the companies were owned by a Chinese state-owned entity, “and are therefore subject to exploitation, influence, and control by the
Chinese government.”
The agency explained that in March 2021, it found that the two companies had not assuaged concerns raised by their state-owned status amid the “changed national security environment with respect to China.”
The decision is one of many made in recent years against entities owned by the People’s Republic of China. China Telecom faced a similar decision last fall.
The order and release, made earlier this week, cited “significant national security and law enforcement risks by providing opportunities for the companies, their parent entities and affiliates, and the Chinese government to access, monitor, store, and in some cases disrupt and/or misroute U.S. communications.” The decisions were made in connection with Executive Branch agencies.
Beyond the espionage concerns, the FCC also said the companies lacked “trustworthiness and reliability” needed to provide telecommunications services.
In her statement, FCC Chairwoman Jessica Rosenworcel stated that the agency will be moving forward with new telecommunications equipment rules soon, aimed at creating a “market for more diverse and secure communications equipment.”
