FCC Releases Order to Revoke China Telecom Americas Corporation’s Section 214 Authority

On November 2, 2021, the FCC released an Order on Revocation and Termination (“Order”) that was adopted during the October Open Meeting and revokes China Telecom (Americas) Corporation’s (“CTA”) domestic Section 214 authority and revokes and terminates CTA’s international Section 214 authority.  The FCC found that CTA’s retention of its Section 214 authority was not in the public interest for two independent reasons: such retention presented national security and law enforcement risks, and CTA demonstrated a lack of candor, trustworthiness, and reliability.  The FCC also found that these risks cannot be addressed through further mitigation with Executive Branch agencies.  The Order directs CTA to discontinue all services relating to its domestic and international Section 214 authority sixty days from the release date of the Order and must provide all affected customers thirty days’ notice of service discontinuance.

CTA holds two international section 214 authorizations which are conditioned on compliance with commitments made in its 2007 Letter of Authorization (“LOA”) to the DOJ, FBI and DHS.  CTA is authorized to provide domestic interstate telecommunications service pursuant to blanket Section 214 authority, and provides the following services pursuant to domestic and/or international Section 214 authority: Mobile Virtual Network Operator (“MVNO”) service, International Private Leased Circuit (“IPLC”) service, International Ethernet Private Line (“IEPL”) service, and Multiprotocol Label Switching/Virtual Private Network (“MLPS VPN”) service.

The Order finds that CTA retention of Section 214 authority presents national security and law enforcement risks because CTA: 1) is a U.S. subsidiary of a Chinese state-owned enterprise; 2) is subject to exploitation, influence, and control by the Chinese government; 3) has access to U.S. telecommunications infrastructure and sensitive consumer information; 4) has opportunities to access, monitor, store, disrupt, or misroute U.S. communications; and 5) is highly likely to be forced to comply with Chinese government requests, including requests for communications intercepts, without sufficient legal procedures subject to independent judicial oversight.

The Order also finds that CTA demonstrated a lack of candor, trustworthiness, and reliability sufficient so that its retention of Section 214 authority was not in the public interest because of its history of failure to disclose important information and provide accurate information to the U.S. government.  This history shows that CTA cannot be trusted to cooperate with Executive Branch agencies, assist the FCC in acting for the purpose of national defense or promoting safety of life and property, or comply with FCC rules.

The FCC also independently found that termination of CTA’s international Section 214 authorizations is warranted based on willful violations of two obligations under the 2007 LOA: 1) to take all practicable measures to prevent unauthorized access to or disclosure of content of communications or U.S. Records; and 2) to notify certain Executive Branch agencies if there are any material changes in represented facts or if the CTA acts in ways that require notice to or application to the FCC.  In addition to other violations that are redacted in the Order, the FCC found that CTA did not provide copies of policies concerning information security (a list of which CTA provided), did not explain how the policies protected U.S. records, did not provide evidence of when CTA implemented the policies, and, for some circumstances, did not provide evidence on whether such policies existed.  CTA also failed to notify the relevant Executive Branch agencies of applications for International Signaling Point Codes (“ISPC”) to the FCC.

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