FCC to investigate potential US operations of restricted Chinese firms 

The Federal Communications Commission is probing a group of Chinese tech and telecom providers that the agency says could still be operating in the U.S. despite prior restrictions being levied on them.

The companies targeted include Huawei, ZTE, Hytera Communications, Hikvision, Dahua Technology and China Mobile, as well as the U.S. units of China Telecom, Pacifica Networks and China Unicom, the FCC said Friday.

The companies are already on an agency “Covered List” that deems them an unacceptable national security risk to U.S. networks and bars them from receiving federal funds, being used by government contractors or supplying equipment and services to U.S. critical infrastructure. The agency says some or all of those entities may still be operating in the U.S. despite their designation.

“We have reason to believe that, despite those actions, some or all of these Covered List entities are trying to make an end run around those FCC prohibitions by continuing to do business in America on a private or ‘unregulated’ basis. We are not going to just look the other way,” FCC Chairman Brendan Carr said.

Anna Gomez, poised to be the lone Democrat commissioner on the FCC for the near term, concurred with the investigation in a Friday X post: “I support any step that builds on the successful and bipartisan effort of previous FCC administrations to ensure that companies posing a national security risk are removed from our networks.”

The initiative is the first under Carr’s new FCC Council of National Security announced last week, aimed at deterring tech threats from China.

The FCC sent letters of inquiry and at least one subpoena to the entities on the Covered List to assess their operations. The subpoenaed Chinese entity was not named, and an FCC spokesperson did not immediately respond to a request for comment.

In response to the sweeping Chinese Salt Typhoon hacks discovered last year that targeted several U.S. telecommunications operators, the Commerce Department moved to jettison the remaining American operating units of China Telecom, the New York Times reported in December. The current status of those actions isn’t clear.

The telecom intrusions have fueled interest from the nation’s top oversight office, which is considering penning a study to assess the cost of administering a far-reaching operation to rip out and replace swaths of at-risk or compromised telecommunications equipment owned by small providers around the nation, Nextgov/FCW previously reported. There is no known link between the Chinese entities on the FCC’s restriction list and the Salt Typhoon hacks.

The FCC’s Covered List was established under the Secure and Trusted Communications Networks Act of 2019, which requires the FCC to identify and restrict communications equipment and services that pose national security risks, including threats of cyber-espionage, network vulnerabilities or foreign government influence. 

Most of the entities on the list are Chinese, though the agency added Russia-tied AO Kaspersky Lab to the list shortly after Russia invaded Ukraine in 2022. Last year, in response to a Commerce Department order, the FCC also listed any cybersecurity and antivirus software manufactured by Kaspersky. The moves effectively barred the American private sector from buying Kaspersky offerings altogether.