The report released Tuesday by Portman and the committee’s top Democrat, Tom Carper of Delaware, also found that China forces U.S. telecommunications companies to enter joint ventures with Chinese companies if they want to do business in China, which has the most subscribers of any market in the world. U.S. companies that operate in China are often forced to transfer both technology and know-how to their Chinese counterparts, the report said.
The probe was spurred by Federal Communications Commission’s May 2019 denial of China Mobile USA’s application to provide international telecommunications services in the United States on national security grounds. It found that three Chinese government owned telecommunications companies that were previously authorized to operate in the United States - China Telecom Americas, China Unicom Americas, and ComNet USA - operated with little U.S. government oversight until recently, even though the Chinese government could also force them to assist in cyber and economic espionage activities targeted at the United States.
The report said the Chinese companies have established relationships with major U.S. carriers, including AT&T, Verizon, and Centurylink—all of which serve government entities, as well as private customers. The Chinese companies have been accused of routing their data through China, where they could monitor what’s being transmitted without end users realizing it.
“The Chinese Communist Party uses its state-owned enterprises to further its cyber and economic espionage efforts against the United States, and they’ve been exploiting our telecommunications networks for nearly two decades while the federal government historically put in little effort to stop it," said a statement from Portman.
Portman said that after his committee began to examine the issue, the federal government began to do more, including a presidential executive order to ensure the proper review and monitoring of foreign-owned carriers. In April, the Trump administration recommended revocation of China Telecom Americas’ license to operate in the United States after concluding the company’s operations provide opportunities for the Chinese government “to engage in malicious cyber activity enabling economic espionage and disruption and misrouting of U.S. communications."
Portman said he’s encouraged by the new efforts, and will work with Carper on legislation "to ensure federal agencies have the oversight and enforcement tools necessary to protect our telecommunications networks going forward.”
A statement from Carper noted that their committee has previously investigated “how the Chinese government has launched cyber-attacks against U.S. businesses and government agencies and worked to get ahead militarily and economically with stolen American research and intellectual property.”
Last year, it released a report on a Chinese program called the “Thousand Talents Plan” that recruits U.S. scientists to transfer taxpayer funded intellectual property to China in exchange for incentives that include money, research funding and lab space. Last month, a former Cleveland Clinic researcher was charged with fraud for failing to disclose his ties to that program.
The report urges the FCC to promptly review the three other companies to ensure U.S. communications networks aren’t unnecessarily put at risk, to establish a clear standard for revoking foreign company’s licenses, and for Congress to require the periodic review and renewal of foreign companies’ authorizations to provide international telecommunications service in the United States. It also says Congress and the administration should take steps to ensure that U.S. companies get reciprocal access to China’s telecommunications market.
“Especially when dealing with state-owned telecommunications carriers, greater controls are needed, and the Administration and Congress must work together to ensure sufficient safeguards and oversight mechanisms are in place,” the report concludes.
©2020 The Plain Dealer, Cleveland. Distributed by Tribune Content Agency, LLC.
