FCC’s Carr alleges Chinese companies are making ‘end run’ around Chinese telecom bans, announces investigation

The FCC commissioner said letters of inquiry and at least one subpoena have been sent to Chinese-owned companies.

The first initiative from The Federal Communications Commission’s newly-created Council on National Security will be a “sweeping” investigation of Chinese-made equipment in America’s telecommunications infrastructure, the agency announced Friday.

In particular, FCC Commissioner Brendan Carr said the focus will be on equipment and services from Chinese companies already barred from U.S. networks under the Secure and Trusted Communications Networks Act.

That law, passed in 2019, charged the FCC with developing a list of Chinese telecommunications equipment and services providers who “pose an unacceptable risk to the national security of the United States or the security and safety of United States persons.” It also offered millions of dollars in incentives for smaller telecoms to rip out and replace their Chinese-made telecommunications equipment.

The list includes Chinese companies Huawei, ZTE, Hytera Communications, Hikvision, Chinese Telecom, China Mobile, China Unicom, Dahua Technology Company and Pacific Networks Corp.

The law already forbids U.S. telecoms from using federal subsidies to purchase equipment and services, but Carr alleged the FCC was aware of potential violations.

“We have reason to believe that, despite those actions, some or all of these Covered List entities are trying to make an end run around those FCC prohibitions by continuing to do business in America on a private or ‘unregulated’ basis,” Carr said in a statement. “ We are not going to just look the other way.”

Carr said the FCC has sent letters of inquiry and at least one subpoena to companies for more information on their business practices, and that the council would work with other federal agencies to “identify the scope of their ongoing activities and move quickly to close any loopholes that have permitted untrustworthy, foreign adversary state-backed actors to skirt our rules.”

A request  to the FCC press office for evidence of Chinese companies evading U.S. laws was not immediately returned. Requests for comment from Huawei, ZTE, Hikvision and other covered Chinese companies were not immediately returned.

The investigation marks the latest effort by the U.S. government to eliminate  foreign equipment from critical infrastructure, particularly from adversaries like China and Russia. Officials have long focused on Huawei and ZTE, citing concerns that their technology may contain backdoors for hackers and that Chinese laws might force these companies to share customer data with the government.

In 2022, the FCC estimated that there were at least 24,000 pieces of equipment from those companies in more than 8,000 locations across the U.S. wireless network.

 These Chinese companies often make inroads with smaller U.S. telecommunications providers by drastically underbidding their competition –  raising national security concerns about potential covert Chinese government support or subsidies from the government that influences the companies’ pricing strategies.

The investigation comes as the federal government is currently grappling with the aftermath of  a massive Chinese espionage campaign that has broadly compromised U.S. telecommunications infrastructure. Attackers linked to the Chinese government were able to access phones and data for millions of Americans, including President Donald Trump and Vice President JD Vance.

However, U.S. officials have never claimed these intrusions relied on vulnerabilities in Chinese-made products. Most available evidence indicates the campaign exploited cybersecurity weaknesses in non-Chinese telecommunications equipment.

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