Washington: The U.S. Commerce Department has moved to further crack down on China Telecom’s US unit over concerns that it could exploit access to American data through its US cloud and internet businesses by providing it to Beijing.
According to a source, the department last week sent China Telecom Americas a preliminary determination that its presence in US networks and cloud services poses US national security risks and gave the company 30 days to respond.
In 2021, the Federal Communications Commission revoked China Telecom Americas’ authorization to operate in the US, citing national security concerns. The Chinese companies, including China Telecom, China Mobile, and China Unicom, still have a small presence in the US, providing cloud services and routing wholesale US internet traffic, which gives them access to Americans’ data.
The Commerce Department is taking action following reports that China has launched a sophisticated hacking campaign, known as Salt Typhoon, which has targeted US telecommunications companies and stolen data about US calls.
In addition, the Federal Communications Commission has advanced a proposal to boost internet routing security and has revoked authorization for other Chinese companies to operate in the US due to security concerns.
China Telecom did not respond to a request for comment, but it has used vulnerabilities in the Border Gateway Protocol, which is central to the internet’s global information routing system, to misroute US internet traffic on at least six occasions, the FCC has said.
The FCC revoked China Unicom America’s authorization to operate in the US in 2022, while it rejected China Mobile’s bid to provide US telecommunications services in 2019. In 2022, an FCC commissioner raised alarm that Chinese telecom firms could “continue to offer data center services to American consumers” despite the revocation, urging further action to address security concerns posed by these centers.