By David Shepardson
WASHINGTON (Reuters) -A federal appeals court on Tuesday rejected China Telecom (NYSE:CHA) Corp's challenge to a Federal Communications Commission order withdrawing the company's authority to provide services in the United States.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia rejected the bid by the U.S. arm of China Telecom to reverse the order that took effect in January. The FCC said in 2021 that China Telecom (Americas) "is subject to exploitation, influence and control by the Chinese government."
A lawyer for China Telecom (Americas) did not immediately comment. The appeals court panel did not immediately make its opinion public.
FCC Chairwoman Jessica Rosenworcel on Tuesday praised the ruling upholding the unanimous commission decision she said "was based on the recommendation of national security agencies that found that China Telecom's operations in the U.S. provided opportunities for increased Chinese state-sponsored cyber activities, including economic espionage and the disruption and misrouting of U.S. communications traffic."
The FCC has raised mounting concerns about Chinese telecom companies in recent years which had won permission to operate in the United States decades ago.
Last month, the FCC banned approvals of new telecommunications equipment from China's Huawei Technologies and ZTE (HK:0763) because they pose "an unacceptable risk" to U.S. national security, in the latest crackdown on China by U.S. regulators.
In 2019, the FCC voted to deny state-owned Chinese telecom firm China Mobile (NYSE:CHL) Ltd the right to provide U.S. services and later withdrew U.S. authorizations for several Chinese telecom carriers.
China Telecom had argued the FCC violated its rules by refusing to hold a hearing before revoking China Telecom (Americas)’ domestic and international common-carrier authorizations.
China Telecom, which had been authorized for 20 years to provide U.S. telecommunications services, had more than 335 million subscribers worldwide in 2019 and has provided services to Chinese government facilities in the United States, according to FCC filings.
The FCC in January voted to revoke the authorization for China Unicom (NYSE:CHU)'s U.S. unit to operate in the United States, citing national security concerns.