China Telecom U.S. unit asks court to block U.S. FCC action

Signage is seen at the headquarters of the Federal Communications Commission in Washington, D.C., U.S., August 29, 2020. REUTERS/Andrew Kelly/File Photo

WASHINGTON, Nov 15 (Reuters) - China Telecom Corp Ltd's (0728.HK) U.S. subsidiary asked a U.S. appeals court on Monday to block the decision of the Federal Communications Commission to revoke the telecommunication company's authorization to operate in the United States.

China Telecom Americas was ordered on Oct. 26 by the FCC to discontinue U.S. services by early January after the U.S. regulator cited national security concerns.

The largest Chinese telecommunications company told the U.S. Appeals Court for the District of Columbia on Monday it must notify customers of the decision by Dec. 4 and said without a temporary halt to the FCC action, it "will be forced to cease significant operations, irreparably harming its business, reputation, and relationships."

The FCC found that China Telecom "is subject to exploitation, influence, and control by the Chinese government and is highly likely to be forced to comply with Chinese government requests without sufficient legal procedures subject to independent judicial oversight."

China Telecom argued the FCC should have first held an administrative hearing and it noted the agency considered action for 18 months, arguing the FCC has offered no evidence "of any imminent threat."

The FCC did not immediately respond to requests for comment.

China Telecom, which has had authorization to provide telecommunications services for 20 years in the United States, served more than 335 million subscribers worldwide as of 2019, according to a Senate report, and also provides services to Chinese government facilities in the United States. It told the court the FCC action would force it "to end its entire resold mobile resale service in the U.S."

The company added it "is actively negotiating an arrangement with another service provider that would allow it to seamlessly transfer its mobile service customers to the other provider."

In March, the FCC began efforts to revoke authorization for China Unicom Americas, Pacific Networks and its wholly owned subsidiary ComNet to provide U.S. telecommunications services.

In May 2019, the FCC voted unanimously to deny state-owned Chinese telecommunications company, China Mobile Ltd (0941.HK), the right to provide U.S. services.

Last year, the FCC designated Huawei Technologies Co Ltd [RIC:RIC:HWT.UL] and ZTE Corp (000063.SZ) as national security threats to communications networks.

In March, the FCC designated five Chinese companies as posing a threat to national security under a 2019 law, including Huawei, ZTE, Hytera Communications Corp Ltd (002583.SZ), Hangzhou Hikvision Digital Technology Co Ltd (002415.SZ) and Zhejiang Dahua Technology Co (002236.SZ).

Reporting by David Shepardson; Editing by Chris Reese and Peter Cooney

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