FCC wants to stop 'unregulated end-run' by banned Chinese telecom companies

The Federal Communications Commission has announced a new investigation into the activities of blacklisted Chinese telecommunication companies, with the FCC concerned that the banned CCP-linked groups might still be operating secretly inside the country.

The FCC said Friday that it had launched “a sweeping investigation into the ongoing U.S. operations of CCP-aligned businesses” which have been found to “pose unacceptable risks to America’s national security.”

Brendan Carr, the chairman of the FCC, said in a Friday interview with Just the News that “over the years we have taken lots of actions against entities beholden to the CCP” and that the companies under investigation have all been deemed national security threats and have had their FCC licenses revoked. But Carr said that “some or all of these entities have nevertheless continued doing business in this country” despite losing their FCC authorizations.

The FCC chairman dubbed this “the unregulated end-run” and said that “this has long been a vision of mine — that we need to end the unregulated end-run” by Chinese telecom companies in the United States, saying Chinese companies may still be operating in a secret or unregulated way. Carr said that “if anyone is evading our rules we will obviously take enforcement action” and that if there is a “loophole” then the FCC will seek to close it.

The FCC previously placed all of these Chinese telecoms on its “Covered List” — which is for “communications equipment and services that are deemed to pose an unacceptable risk to the national security of the United States or the security and safety of United States persons.”

The new FCC investigation targets nine CCP-linked telecom firms, including Huawei, ZTE, Hikvision, China Mobile, China Unicom and China Telecom.

The FCC’s new Council on National Security will lead the investigation, will look into the “ongoing U.S. businesses” of the Chinese telecoms, and will “move quickly to close any loopholes that have permitted untrustworthy, foreign adversary state-backed actors to skirt our rules.” The mission of the new council, announced last week, includes "ensuring the U.S. wins the strategic competition with China over critical technologies."

A national security issue

The FCC said Friday that despite the equipment and services from these Chinese companies being banned, “some or all of those entities may still be operating in the U.S.” The FCC said it sent letters to the Chinese companies and at least one subpoena to one of the Chinese telecoms as well, saying that the FCC “is now gathering responsive information and will determine any actions that may be necessary to further safeguard America’s networks and promote our national security.”

Carr said in a press release Friday that “the FCC has taken concrete actions to address the threats posed by Huawei, ZTE, China Telecom, and many other entities that pose an unacceptable risk to America’s national security, including by doing Communist China’s bidding” but that “we are not going to just look the other way” if those companies are still operating in the U.S. surreptitiously.

The other Chinese companies targeted by the FCC inquiry are Hytera Communications, Dahua Technology and Pacifica Networks.

Carr also told Just the News he was interested in seeing what data center efforts the Chinese telecoms might be undertaking in the United States. Loudon County, in Northern Virginia outside of the nation’s capital, has been dubbed “Data Center Alley” because it is “the world’s largest concentration of data centers.”

The Pentagon has also assessed that Huawei, China Mobile, China Telecom, China Unicom, Hikvision and Dahua are “Chinese Military Companies.” China Unicom was the official telecom provider for the 2022 Winter Olympics in Beijing.

Huawei and the other Chinese telecoms have all denied that they pose national security threats, but the FCC has repeatedly insisted that they do pose such a risk. The Chinese telecoms have fought in U.S. federal courts to have the designations removed, but federal courts have repeatedly upheld the FCC’s authority to blacklist the Chinese companies.

Cyberattacks

The FBI warned in October about the “unauthorized access to commercial telecommunications infrastructure by actors affiliated with the People’s Republic of China.” The massive cyber espionage effort by Chinese intelligence-linked hackers — dubbed “Salt Typhoon” — reportedly gained access to a massive amount of data.

The FCC announced in December that it was “taking decisive steps to address vulnerabilities in U.S. telecommunications networks following the Salt Typhoon cyberattack.”

The FCC during the first Trump administration launched an initial crackdown on Chinese telecoms, including the risk posed by Huawei. The Chinese company has lost legal battles attempting to fight against its limitations in the U.S. That crackdown was based in part on U.S. intelligence agencies and federal law enforcement's collective belief that Huawei and other Chinese companies are working hand-in-hand with the ruling Chinese Communist Party, potentially giving China’s surveillance state access to hardware and networks around the world.

The Republican-led Senate Permanent Subcommittee on Investigations released a report in 2020 warning that at that point the federal government had “provided little-to-no oversight of Chinese state-owned telecommunications carriers operating in the United States for nearly twenty years” and how China is targeting U.S. communications the same way it has targeted education, research, and personal data.”

The first Trump administration made a significant push to convince U.S. allies — especially the “Five Eyes” intelligence partners — not to use Huawei in their 5G networks.

Huawei's previous run-ins with the law

During the Biden administration in 2021, Meng Wanzhou, Huawei’s chief financial officer and daughter of its founder, walked free in Canada and quickly returned to China after the Biden DOJ agreed to enter into a deferred prosecution agreement with her and acquiesced to ending the U.S.’s extradition request to Canada, where she was being held on U.S. charges of bank fraud and wire fraud related to helping Huawei dodge sanctions in Iran. The Biden White House denied any link between dropping the charges against the Huawei executive and China’s simultaneous agreement to free two Canadians — Michael Spavor and Michael Kovrig — from Chinese imprisonment.

The FCC chairman announced in January that he was “ending the FCC’s promotion of DEI” and said he would “focus the agency’s work on competently carrying out the Commission’s statutory mission, as defined by Congress, without promoting invidious forms of discrimination.” The next month he announced he was launching an investigation into their own DEI policies.

Carr also successfully pushed CBS to hand over its unedited transcript of the raw version of its October 2024 interview with former Vice President Kamala Harris.

While still just an FCC commissioner, he criticized then-House Intelligence Committee Chairman Adam Schiff (D-CA) in 2020 for having engaged in the “secret and partisan” act of collecting and publishing private phone call records during the Ukraine-related impeachment investigation into Trump during his first term.

Carr: "Drop the hammer on this hammer and sickle operation"

The House and Senate passed, and then-President Biden signed, legislation last year which would require Chinese-owned TikTok either to entirely shed its Chinese ownership or cease operating in the United States. Trump has delayed enforcement of the law as he engages in negotiations with TikTok and with prospective buyers.

Carr told Just the News on Friday that “we’re not involved here at the FCC” with the ongoing negotiations about TikTok, but that “I’m confident that the administration is going to land that in a good spot” which protects U.S. national security.

Carr praised the 2024 bipartisan legislation that took aim at TikTok’s links to the CCP, saying, “I want to applaud the strong, bipartisan leadership that Members of Congress have shown in advancing this bill, which would definitively resolve the serious national security threats TikTok poses by banning the app or requiring that it genuinely sever ties to the CCP.” The then-commissioner said in the past that “it is time to drop the hammer on this hammer and sickle operation.”