FCC Denies China Mobile USA Section 214 Application

On May 10, 2019, the Commission released a Memorandum Opinion and Order denying the application of China Mobile International USA (“China Mobile USA”) for a section 214 authorization to provide international telecommunications services between the US and foreign destinations. The Commission finds that, based on a number of factors related to China Mobile USA’s ownership and control by the Chinese government, granting the application “would raise substantial and serious national security and law enforcement risks that cannot be addressed through a mitigation agreement,” and therefore is not in the public interest.

China Mobile USA is a Delaware corporation that is indirectly and ultimately controlled by the Chinese government. On September 1, 2011, China Mobile USA filed a section 214 application, and following a lengthy review and consultation period, on July 2, 2018, NTIA, on behalf of the Executive Branch agencies, recommended that the Commission deny the application due to the concerns stemming from its foreign ownership. In its opposition, China Mobile USA argued that the agencies relied on a 2012 House Report concerning security issues surrounding companies such as Huawei and ZTE, and noted that it has no common ownership, governance, management, operation, or other coordination arrangements with either Huawei or ZTE, and that it has already voluntarily removed Huawei equipment from its U.S. network and has committed to not use Huawei equipment in its U.S. operations in the future. Despite these assertions, the Commission now determines that China Mobile USA is “vulnerable to exploitation, influence, and control by the Chinese government,” and there is a significant risk that granting the application would allow China Mobile USA to exploit the US telephone network to increase intelligence collection against US government agencies and further jeopardize US national security and law enforcement interests.

This item was voted upon and adopted in the May Open Meeting.

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