Kate O'Keeffe

An influential Senate panel is calling for stricter oversight of Chinese telecommunications companies operating in the US after an investigation found years of weak supervision by regulators threatens national security. In a forthcoming report, the Senate Permanent Subcommittee on Investigations will level sharp criticism at a group of telecom regulators for failing to scrutinize the Chinese companies and the way they handle data going back nearly two decades.

Trump administration officials sought to revoke federal licenses used by China Telecom to do business in the US as part of a broader campaign to curb global Chinese technology interests on national security grounds. A collection of federal agencies led by the Department of Justice and including the departments of Defense and Homeland Security asked the Federal Communications Commission to permanently revoke licenses the Chinese internet service provider’s US subsidiary has used since 2007 to act as a “common carrier” connecting domestic and overseas networks.

US officials granted Google permission to turn on a high-speed internet link to Taiwan but not to the Chinese territory of Hong Kong, citing national-security concerns in a ruling that underscores fraying ties between Washington and Beijing.

A new front has opened in the battle between the US and China over control of global networks that deliver the internet. This one is beneath the ocean. While the US wages a high-profile campaign to exclude China’s Huawei Technologies from next-generation mobile networks over fears of espionage, the company is embedding itself into undersea cable networks that ferry nearly all of the world’s internet data.

Apparently, T-Mobile won approval from US national-security officials for its planned takeover of Sprint, bringing the two rivals a step closer to closing their roughly $26 billion combination. The Committee on Foreign Investment in the US, or Cfius, told the companies that it had cleared the union of the No 3 and No 4 carriers by subscribers after several months of negotiations with company representatives.

The US government has initiated an extraordinary outreach campaign to foreign allies, trying to persuade wireless and internet providers in these countries to avoid telecommunications equipment from China’s Huawei Technologies Co., apparently. American officials have briefed their government counterparts and telecom executives in friendly countries where Huawei equipment is already in wide use, including Germany, Italy and Japan, about what they see as cybersecurity risks.

ZTE Corp can resume business with its US suppliers, the Commerce Department said July 13, after the Chinese telecommunications giant met the conditions of a deal President Donald Trump made to save the company. The saga over the fate of the Chinese firm began in April when Commerce banned US companies from selling to ZTE as punishment for its failure to honor an earlier US agreement to resolve its sanctions-busting sales to North Korea and Iran. Because ZTE relies on US suppliers to make its smartphones and to build telecommunications networks, the penalty was effectively a death knell.

Some White House officials view next-generation 5G wireless service as a “key area of competition,” and they say that the threat from China, in particular, justifies a “moonshot” government effort like the construction of the interstate highway system. A National Security Council memo urges the Trump administration to consider extraordinary efforts to clear the way for the new technology or even to help build it in order to counter the growing economic and political threat from China’s aggressive efforts to develop 5G. 

Chinese telecommunications giant ZTE Corp has agreed to pay $892 million and plead guilty to violating US sanctions on Iran and obstructing a federal investigation, ending a five-year probe that has raised trade tensions between the US and China. The penalties, among the largest ever in a sanctions case, were imposed on ZTE for a six-year-long plan to obtain technology products from the US, incorporate them into ZTE equipment and ultimately ship the equipment to Iran, US officials said.

Still, the company avoided a more devastating outcome: a supply cutoff of US components, which the Commerce Department slapped on ZTE in March 2016, prompting the company to come forward to negotiate the eventual settlement, according to US authorities. The Commerce Department suspended the sanctions during the talks and, in conjunction with the settlement agreement, it will now move to fully remove them, officials said. Without key components such as Qualcomm Inc. processors for its smartphones, ZTE’s ability to produce some of its major products could have been crippled in a matter of months, putting it at risk of bankruptcy.