ANALYSIS AND BREAKING: US blocks China Mobile, citing national security

Date created : 10/05/2019 - 01:41  GMT/ZULU

Washington authorities blocked an effort by China Mobile to enter the US telecom market due to national security concerns AFP/File

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Washington 

by Melissa Gruz and Biodun Iginla, France24 Security and Techology Analysts

US regulators on Thursday denied a request by China Mobile to operate in the US market and provide international telecommunications services, saying links to the Chinese government pose a national security risk.

The Federal Communications Commission said that because of China Mobile USA's ownership and control by the Chinese government, allowing it into the US market "would raise substantial and serious national security and law enforcement risks."

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The decision brings the Chinese telecoms giant's eight-year effort to crack the US market to an end, but was not really a surprise since FCC Chairman Ajit Pai had publicly opposed the company's application last month.

China Mobile -- the world's largest mobile operator with nearly 930 million customers as of February -- first filed an application for permission to operate in the United States in 2011.

The five-member FCC said in a statement that the decision was made after "extensive review" and "close consultation" with national security and law enforcement agencies.

It also marks the first instance in which executive branch agencies have recommended that the FCC deny an application due to national security and law enforcement concerns, the statement said.

The move comes as Chinese tech firms -- such as Huawei and ZTE -- have faced stiff resistance from US government agencies, which have described them as security threats.

- Wider trade battle -

ZTE came close to collapse last year after American companies were banned from selling it vital components over its continued dealings with Iran and North Korea.

Federal authorities unveiled sweeping charges against Huawei in January for allegedly stealing technology and violating US sanctions on Iran.

The company has also been under fire as it faces a global US campaign to blacklist Huawei over espionage fears.

Washington has barred the Chinese networking equipment company Huawei from developing the new ultra-fast 5G mobile network in the United States and has blocked US government purchases of its services.

Defense of intellectual property in China and getting fair access to that country's markets have long been points of concern for US tech companies. They are also considered hard-to-fix problems when it come to trade between the US and China.

Meanwhile, technology has become increasingly vital to national security and economies.

Denial of the China Mobile request came as US President Donald Trump held out hopes of salvaging a trade deal with China, just hours before Beijing's negotiators were due to return to the bargaining table amid a sudden flare-up in hostilities.

Since last year, the two sides have exchanged tariffs on more than $360 billion in two-way trade, gutting US agricultural exports to China and weighing on both countries' manufacturing sectors.

The International Monetary Fund also repeated its warning on Thursday that the trade battle between the world's top economies was a "threat" to global growth.

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U.S. lawmakers urge AT&T to cut commercial ties with Huawei

January 16, 2018  15H:40  GMT/UTC/ZULU TIME

by Tamara Kachelmeier and Biodun Iginla, BBC News and Reuters Technology and security reporters, Washington/Beijing

WASHINGTON  - U.S. lawmakers are urging AT&T Inc, the No. 2 wireless carrier, to cut commercial ties to Chinese phone maker Huawei Technologies Co Ltd and oppose plans by telecom operator China Mobile Ltd to enter the U.S. market because of national security concerns, two congressional aides said.

FILE PHOTO - A man walks past a logo during the presentation the Huawei's new smartphone, the Ascend P7, launched by China's Huawei Technologies in Paris, May 7, 2014. REUTERS/Philippe Wojazer/File Photo

The warning comes after the administration of U.S. President Donald Trump took a harder line on policies initiated by his predecessor Barack Obama on issues ranging from Beijing’s role in restraining North Korea to Chinese efforts to acquire U.S. strategic industries.

Earlier this month, AT&T was forced to scrap a plan to offer its customers Huawei [HWT.UL] handsets after some members of Congress lobbied against the idea with federal regulators, sources told us at Reuters.

The U.S. government has also blocked a string of Chinese acquisitions over national security concerns, including Ant Financial’s proposed purchase of U.S. money transfer company MoneyGram International Inc.

The lawmakers are also advising U.S. firms that if they have ties to Huawei or China Mobile, it could hamper their ability to do business with the U.S. government, one aide said, requesting anonymity because they were not authorized to speak publicly.

One of the commercial ties senators and House members want AT&T to cut is its collaboration with Huawei over standards for the high-speed next generation 5G network, the aides said. Another is the use of Huawei handsets by AT&T’s discount subsidiary Cricket, the aides said.

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Chinese foreign ministry spokesman Lu Kang said on Tuesday he did not know anything about the details of the commercial cooperation cases, but added China hopes other countries would provide a fair operating environment for Chinese firms.

“We hope that China and the United States can work hard together to maintain the healthy and stable development of trade and business ties. This accords with the joint interests of both,” Lu told a daily news briefing in Beijing.

China Mobile, the world’s biggest mobile phone operator, did not respond to requests for comment.

AT&T declined to comment but said that it had made no decisions on 5G suppliers.

U.S. lawmakers who have in the past expressed concerns about the prospect of the deal between AT&T and Huawei either declined to comment or were not immediately available.

Huawei declined to comment, but earlier this week told us at Reuters that it sells its equipment through more than 45 of the world’s top 50 carriers and puts the privacy and security of its customers as its top priority.

National security experts fear that any data from a Huawei device, for example about the location of the phone’s user, would be available to Chinese government intelligence services.

In 2012, Huawei and ZTE Corp were the subject of a U.S. investigation into whether their equipment provided an opportunity for foreign espionage and threatened critical U.S. infrastructure - a link that Huawei has consistently denied.

“The next wave of wireless communication has enormous economic and national security implications. China’s participation in setting the standards and selling the equipment raises many national security issues that demand strict and prompt attention,” said Michael Wessel, a member of the U.S.-China Economic and Security Review Commission, which was set up by Congress.

U.S. lawmakers do not want China Mobile to be given a license to do business in the United States, the congressional aides said. China Mobile applied for the license in 2011, and the application is pending before the Federal Communications Commission.

Huawei and Chinese telecom firms have long struggled to gain a toehold in the U.S. market, partly because of U.S. government pressure on potential U.S. partners.

Two Republican lawmakers, Representatives Michael Conaway and Liz Cheney, introduced a bill this week that bars the U.S. government from using or contracting with Huawei or ZTE Corp, a Chinese telecommunications and equipment and systems company.