The US government has opened an investigation into Chinese carriers China Mobile, China Telecom, and China Unicom amid concerns that the state-owned companies could provide US data to the Chinese government via their US cloud and wholesale routing services.
As reported by Reuters, the government has subpoenaed the trio, which cited sources familiar with the matter.
So far, the government has completed “risk-based analyses” of China Mobile and China Telecom, but is less advanced in its probe of China Unicom.
All three telcos have a presence in the US, albeit a limited one, following a decision to ban them amid fears of their links with the Chinese State.
In 2022, the Federal Communications Commission (FCC) revoked China Unicom Americas’ permit to provide telco services in the US due to national security fears.
A similar ban was imposed on China Telecom in 2021, before being implemented a year later.
China Mobile's application to provide telephone services in the US was denied in 2019.
Earlier this year, the FCC ordered the US units of China Telecom, China Unicom, and China Mobile to discontinue fixed or mobile broadband Internet operations in the country.
The regulator has previously said that Chinese telecom firms were "subject to exploitation, influence and control by the Chinese government," and has highlighted its concerns around Chinese access to Points of Presence (POPs) typically located within data centers.
Reuters noted in its report that it has not found any evidence to suggest that the companies have intentionally provided sensitive US data to the Chinese government or committed any other type of wrongdoing.
Despite the bans imposed, the three companies have been able to provide wholesale cloud services in the country.
Sources told the publication that regulators have yet to address the potential threat, but could seek to block transactions that allow the trio to operate in data centers and route data for Internet providers.
Such a move could cripple the carriers' remaining US businesses.
Relations between the US and China have strained significantly in recent years, with the US regularly asserting that China is a security threat.
In 2022, the US banned approvals of new telecommunications equipment from Chinese vendors Huawei and ZTE, with the Biden Administration saying at the time that the two companies posed "an unacceptable risk" to US national security.
The stance followed that of the previous government, with former President Donald Trump signing an executive order in May 2019 aimed at giving the federal government power to block US companies from purchasing any foreign-made telecommunications equipment deemed a national security risk.
The move was particularly focused on Huawei and led to the vendor facing severe restrictions on its use of Google Mobile Services (Android OS), which in turn severely hurt Huawei's smartphone business.
