FCC cites national security concerns to block Hong Kong’s HKT from U.S. networks

The Federal Communications Commission (FCC) has moved to bar Hong Kong’s telecommunications company, HKT, and its subsidiaries from interconnecting with U.S. networks due to national security concerns. The Commission’s Chairman, Brendan Carr, said the move is appropriate to ensure the integrity and safety of the country’s communications networks.

The FCC sent an Order to Show Cause to HKT, asking the company to justify why its authorizations should not be revoked, escalating concerns over HKT’s ties to China.

Specifically, Carr said the FCC will continue safeguarding the country’s communications networks against penetration from foreign adversaries like China. China Unicom, which owns an 18.4% stake in PCCW, lost its access to U.S. networks in 2022 due to national security concerns. 

As reported by Cryptopolitan, the FCC recently tightened undersea cable security to protect U.S. AI networks from China. FCC Commissioner Olivia Trusty cautioned that global adversaries, including China, expose the networks to sabotage, espionage, and surveillance. The measures are part of the U.S. push to curb China’s influence in critical U.S. technologies.

FCC plans tighter restrictions for Chinese telco equipment

The FCC revealed plans to vote for tighter restrictions on Chinese telecommunication equipment on October 28. Chairman Brendan Carr said the Commission is working to ensure that Chinese-controlled entities posing national security risks cannot connect to U.S. telecom networks. 

The FCC disclosed that HKT’s current authorizations allow the company to exchange data and calls directly with U.S. carriers, a privilege generating significant revenue for the operator. HKT and PCCCW derived nearly 13% of their 2024 revenues from outside China, with HKT representing 90% of the revenue.

Last week, Carr said major online retail websites in the U.S. have removed millions of listings for restricted Chinese electronics as part of the FCC’s crackdown. The restriction list will include smartwatches and home security cameras from companies like Hangzhou Hikvision, Dahua Technology, ZTE, and Huawei. 

FCC digs into HKT subsidiaries

The Commission investigated HKT and found that the Chinese government indirectly owns its subsidiaries, including PCCW Global, PCCW Global UK, PCCW Global Limited, and Gateway Global Communications. The PRC government uses intermediate entities organized locally, in the British Virgin Islands, Hong Kong, and the Cayman Islands. 

Section 2 of the Secure Network Act requires the FCC to publish a list of communications equipment and services that threaten the U.S. and its citizens. The FCC delegates the Public Safety and Homeland Security Bureau (PSHSB) to monitor these sources of unacceptable risk. The Commission has undertaken several unanimous actions focused on national security threats like China. 

The Commission established a Council on National Security to coordinate its investigatory, enforcement, and regulatory authorities in countering foreign adversaries.

In May, it took action in two proceedings to protect the country’s communications infrastructure from foreign threats. The FCC prohibits recognizing any telecommunication certification body (TCB), laboratory accreditation body, or measurement facility controlled or owned by foreign adversaries.  

The Commission has proposed applying new certification and disclosure requirements to entities holding every type of license, permit, or authorization, going beyond foreign ownership to cover all entities controlled by or subject to the direction of foreign adversaries. It also adopted a Report and Order that updated its licensing process by implementing reporting and certification requirements, routine conditions, and a presumptive disqualifying condition related to entities owned or controlled by foreign adversaries. 

The FCC also relies on the Secretary of Commerce’s determinations, which have identified six foreign adversaries, including China, Hong Kong, and Macau. The Commission’s identification of Hong Kong as a foreign adversary is consistent with President Trump’s Executive Order 13936, which suspended the preferential treatment of Hong Kong. 

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