The 4-0 vote was announced Thursday and ends the company’s authorization to operate in the United States that was first granted in 2001.
Pacific Networks is owned by CITIC Telecom International Holdings and is sold publicly on the Hong Kong Stock Exchange. Earlier this year, Pacific Networks argued that as a publicly traded company with investors from the US, European Union and the United Kingdom, the company is required to provide outside transparency and accountability, unlike wholly state owned companies.
The FCC argued that CITIC Telecom International Holdings’ parent company is CITIC Group Corp, which is a Chinese state-owned limited liability company (LLC).
Pacific Networks and ComNet primarily sell international calling cards in retail settings.
The move follows similar actions against Chinese technology companies operating in the US. Last year, the FCC revoked its authorization for China Telecom Corp and declined to authorize China Mobile LLC. In 2019, the FCC moved against Chinese tech giants Huawei and ZTE, banning telecom companies from using their components.
“Pacific Networks and ComNet are ultimately owned by a Chinese state entity, and are subject to the exploitation, influence, and control of the Chinese government. As such, they are highly likely to be forced to comply with Chinese government requests – including the accessing, monitoring, and disrupting of U.S. communications,” FCC Commissioner Geoffrey Starks said in a statement. “Taken as a whole, our actions have strengthened our national security and affirmed the FCC’s statutory responsibility to protect the national defense and the safety of life and property.”
Responding to the move, Gao Feng, spokesman for the Chinese commerce ministry, called the accusations baseless. “The U.S. should stop the groundless crackdown on Chinese firms right now and the wrongdoings of politicizing trade and economic issues immediately,” he said in a statement, via Yahoo.
Starks’ statement similarly implied that the FCC did not find any evidence of snooping by Pacific Networks or ComNet, but it’s their Chinese roots that pose a threat. “While Pacific Networks and ComNet don’t appear to have BGP [Border Gateway Protocol] misrouting capabilities, they pose a threat similar to their fellow Chinese carriers.”
The FCC has yet to present any evidence of spying by the Chinese telecommunications company it has taken action against, something that has not escaped the attention of Zhao Lijian, spokesman of China’s Ministry of Foreign Affairs.
“The US, without providing any facts about [the] offense, revoked the Chinese company’s license in the US with the excuse of ‘national security’ again... The Chinese government supports relevant companies in defending their interests in accordance with law, and will continue to take necessary measures to resolutely safeguard the lawful rights and interests of Chinese companies.”
Lijian did not specify what those measures would entail.
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