U.S. Blocks China's Unicom From Nation's Telecoms Market

The Federal Communications Commission (FCC) late last week voted to ban state-owned China Unicom from offering telecom services in the United States, Brian Fung and Laura He reported for CNN Business.

Photo Insert: China Unicom claims to have complied with "relevant US laws and regulations" in the past two decades, and that the FCC has acted "without any justifiable grounds and without affording required due process."

The decision marks the telecom regulators' latest move to lock down US networks against the risk of Chinese espionage, a threat that national security officials began highlighting several years ago with the spread of cheap, Chinese-produced networking gear in small and rural wireless networks.

"Today we take another critical step to protect our communications networks from foreign national security threats," said FCC Chairwoman Jessica Rosenworcel in a statement.

"There has been mounting evidence—and with it, a growing concern—that Chinese state-owned carriers pose a real threat to the security of our telecommunications networks," she added. State-owned Chinese firms are managed by committees comprised of leaders or members of the Communist Party of China (CPC) and abide by party rules and objectives set by Beijing.

The FCC said the action "safeguards the nation's telecommunications infrastructure from potential security threats." China Unicom said in a written response to CNN Business that it has complied with "relevant US laws and regulations" in the past two decades and that the FCC has acted "without any justifiable grounds and without affording required due process."

China Unicom added that it "would act proactively to protect the rights and interests of the company and its customers." The FCC has also started similar revocation proceedings against two other Chinese companies, Pacific Networks Corp. and ComNet (USA) LLC.

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