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4 Jan 2023

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US Federal Court Upholds Ban on China Telecom

The US Federal Court recently ruled in favor of the Federal Communications Commission's (FCC) decision to ban China Telecom from operating in the United States. The FCC stated that the Chinese-owned telecommunications company posed a national security threat due to its potential ties to the Chinese government.

This ruling upholds the FCC’s decision and means that China Telecom can no longer provide services in the US. The appeal upholds the FCC's decision from October 2021 to ban the company from operating in the United States from January 2022 onward.

As the FCC said last year, China Telecom "can be exploited, influenced, and controlled by the Chinese government.”

FCC Chairwoman Jessica Rosenworcel implemented the ruling, implementing the ban on China Telecom shortly after taking office.

"This action was based on the recommendation of national security agencies that found that China Telecom's operations in the US provided opportunities for increased Chinese state-sponsored cyber activities, including economic espionage and the disruption and misrouting of U.S. communications traffic," she said after the ruling.

Twenty years prior, China Telecom was legally allowed to provide services to U.S. telcos and has more than 335 million subscriptions worldwide.

Earlier this year, Huawei and ZTE were banned from selling new telecommunications equipment to the US for national security reasons.

The FCC prohibits the sale or import of any devices made by the two vendors, in addition to several other companies including Dahua Technology Co, Hangzhou Hikvision Digital Technology Co Ltd, and Hytera Communications Corp Ltd.

China Telecom has strongly denied any wrongdoing and argued that the ban would harm its operations in the US. It also argued that the decision was arbitrary and not based on facts. Despite this, the US Federal Court ruled that the FCC acted lawfully and that the ban is in the best interests of the US.

This ruling is likely to cause further tensions between the US and China. It is also likely to be seen as a sign of increased protectionism from the US government. For now, it remains unclear how China Telecom will respond or how the ban will affect its operations in the US.

Also read: How the White House cybersecurity team views China's TikTok threat

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