U.S. poised to deny China Mobile access to American market due to spying fears

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On Monday, the Trump administration moved to block a large Chinese telecommunications company from entering the U.S. market, recommending that its application be rejected on national security grounds.

China Mobile, the world’s largest mobile operator, had sought to move into the U.S. cell phone and communication services space. In 2011, the company filed an application to U.S. regulators at the Federal Communications Commission for a license to do business in the United States.

In a statement released Monday, the National Telecommunications and Information Administration (NTIA) announced that the Federal Communications Commission (FCC) should deny China Mobile’s application.

“After significant engagement with China Mobile, concerns about increased risks to US law enforcement and national security interests were unable to be resolved,” David Redl, the assistant secretary for communications and information at the Commerce Department, said in NTIA’s statement.

The NTIA is an arm of the Commerce Department that advises the White House on telecom and information policy matters.

The move comes as U.S. lawmakers mull increasingly aggressive actions to prevent Chinese telecoms from engaging in commercial activity with the U.S. government or private sector. Washington has moved to bar a growing list of Chinese companies from doing business in the United States, and even upped the pressure on the private sector to sever ties with Chinese companies.

Washington’s thinking is driven by fears that Chinese telecom companies, with cozy relationships or direct ties to the Chinese Communist Party and People’s Liberation Army, could tunnel into American communications network through backdoors in the hardware and software that they distribute stateside.

But an NTIA spokeswoman said that the timing was unrelated to the ongoing Chinese telecom saga playing out in Washington related to Huawei and ZTE, two other Chinese telecom companies.

“This decision was made after years of looking at it and extensive inter-agency consultation and trying to get an agreement on what needed to be done,” the spokeswoman told CyberScoop.

In its recommendation, the NTIA said its decision relied “in large part on China’s record of intelligence activities and economic espionage targeting the US, along with China Mobile’s size and technical and financial resources.”

The NTIA also wrote that China Mobile was “subject to exploitation, influence and control by the Chinese government” and that the firm posed “substantial and unacceptable national security and law enforcement risks in the current national security environment.”

Chinese foreign ministry spokesman Lu Kang, responding to a question about China Mobile at a daily briefing, commented: “We urge the relevant side in the United States to abandon Cold War thinking and zero sum games,” as reported by Reuters.

The state-owned company is China’s largest mobile operator, with a massive customer base of nearly 900 million people. NTIA’s recent position is unlikely to affect China Mobile’s core business, analysts say, though the company’s share fell Monday to their lowest in more than four years.

The decision was greeted with applause from Sens. Marco Rubio (R-FL) and Tom Cotton (R-AR), who have been among the loudest voices leading the charge against Chinese telecom companies on Capitol Hill.

“Agree with this decision 100%. It would be grossly irresponsible to allow #ChinaMobile to operate in the U.S. market. Like every #China telecommunication company, they pose a grave security risk,” Sen. Rubio tweeted Tuesday.

“The NTIA is right to recognize the threat posed by China Mobile, especially given Beijing’s long track record of espionage, both political and economic,” Sen. Cotton said in a press release. “The FCC should be on guard against any threats to U.S. national security and block China Mobile from entering our market.”

China Mobile did not respond immediately to CyberScoop’s request for comment.

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China Mobile, Federal Communications Commission, NTIA, People's Liberation Army, telecommunications, trade, trade policy
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