FCC Shuts Down Chinese Telecom Firm Pacific Network Over Concern About CCP Influence

A view of the commission's hearing room before a hearing at the Federal Communications Commission on December 14, 2017 in Washington. Brendan Smialowski/AFP via Getty Images

The Federal Communications Commission (FCC) has voted to bar Pacific Networks Corp. and its wholly-owned subsidiary ComNet from providing telecommunications services in the United States, citing national security concerns associated with their ties to the Chinese regime.

With this 4-0 vote, Pacific Networks join three other Chinese telecom firms banned by the regulator from operating in the U.S. market on security grounds.

The FCC has held concerns for years about whether Pacific Networks and ComNet could operate freely in the United States without jeopardizing national security and the wellbeing of customers.

A March 16 statement from the FCC noted that the body found as far back as March 2021 that the two entities “had failed to dispel serious concerns” about the retention of their authority to offer services in America. In consequence, the FCC established procedures by which Pacific Branch Networks and ComNet could present arguments and evidence to allay the regulators’ concerns.

But the regulator came to the conclusion that, given an opportunity to address these concerns and clear the path to continued operation, the two platforms failed.

“[T]oday’s action safeguards the nation’s telecommunications infrastructure from potential security threats,” the statement read.

The FCC’s decision was based on a number of considerations.

As subsidiaries of a Chinese state-owned entity, the two companies are subject to “exploitation, influence, and control by the Chinese government,” and will have little choice but to obey the edicts of the Chinese regime without recourse to the legal protections that telecom providers in other countries might enjoy, the statement noted.

Moreover, given their relationship with the Chinese regime, Pacific Networks Corp. and ComNet may provide opportunities for Beijing “to access, monitor, store, and in some cases disrupt and/or misroute U.S. communications,” facilitating Chinese communist espionage and other harmful actions against America, it added.

The FCC also noted that the firms breached a 2009 Letter of Assurances with executive agencies, which they were required to adhere to under their authorization to operate in the United States.

The FCC’s order gives the companies 60 days to cease all domestic and international services that they currently provide under their U.S. authorization. The order also reclaims the two International Signaling Point Codes assigned to ComNet in 2001 and 2003.

Since October, the regulator has revoked the authorizations for the U.S. arms of Chinese state-owned telecom firms, China Telecom and China Unicom, citing their links to Beijing triggering national security concerns.

In February, the Justice Department announced charges against Shenzen-based telecom company Hytera, which the FCC designated as a national security threat in March 2021, alleging that the firm oversaw a campaign to steal trade secrets from Motorola. Prosecutors alleged that Hytera used stolen Motorola technology in its own services and products, which the Chinese firm has denied.