Yahoo Finance China’s Pacific Networks Ejected From U.S. Over Security
(Bloomberg) -- The U.S. Federal Communications Commission ejected Pacific Networks Corp. and ComNet (USA) LLC from the U.S. market, continuing a series of bans of Chinese telecommunications companies over security concerns.
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Wednesday’s 4-0 vote follows the agency’s January decision to bar China Unicom Hong Kong Ltd. Last year the agency barred China Telecom (Americas) Corp., and earlier it refused to let China Mobile Ltd. enter the U.S. market.
The move shows potential espionage and data theft by Chinese state-owned companies remains a concern under President Joe Biden after being elevated as an issue by his predecessor, President Donald Trump.
Pacific Networks and ComNet primarily sell retail calling cards in the U.S., the companies said in a January filing. Shareholders include investors from the U.S., the U.K. and the European Union, the companies said.
“The participation of significant levels of public, international ownership show the companies are very different from a 100% state-owned company not subject to external transparency and accountability requirements,” the companies said in the filing.
Pacific Networks is 100% owned by Citic Telecom International Holdings Ltd., a publicly-listed company on the Hong Kong Stock Exchange, according to the filing.
Pacific Networks and ComNet earlier told the FCC their operations aren’t subject to Chinese government control, and had complied with FCC requirements. Their parent company is state-owned Citic Group Corp.
The FCC’s actions against Chinese carriers have drawn attention in Beijing, with Chinese Foreign Ministry spokesman Zhao Lijian in January saying the U.S. was using security as a pretext to revoke the license of a Chinese company. He called it “an abuse of state power to suppress Chinese companies.”
China said it firmly opposes the U.S. move as it hurts the legitimate rights and interests of Chinese companies and U.S. consumers, commerce ministry spokesman Gao Feng said at a regular briefing Thursday in Beijing. “The U.S. should immediately stop its unreasonable suppression of Chinese companies and the wrong practice of politicizing economic and trade issues,” Gao said, vowing necessary measures to safeguard the rights and interests of Chinese enterprises.
(Updates with comments from China’s commerce ministry in final paragraph.)
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