United States seeks to block China mobile's entry, escalating tension

Daniel Fowler
July 5, 2018

In September 2011, China Mobile International (USA) Inc. first applied to the FCC to enter the US telecom market.

"Therefore, the Executive Branch of the U.S. government, through the National Telecommunications and Information Administration pursuant to its statutory responsibility to coordinate the presentation of views of the Executive Branch to the FCC, recommends that the FCC deny China Mobile's Section 214 license request".

In return, the U.S. said it would remove the ban - a negotiation that has been linked to wider trade tensions between the USA and China. The U.S. will impose tariffs on goods from China worth more than $34 billion starting July 6, and Beijing likely will respond with its own tariffs on U.S. products.

For some perspective, China Mobile is the largest carrier in the world, with nearly 900 million subscribers.

After significant engagement with China Mobile, concerns about increased risks to USA law enforcement and national security interests were unable to be resolved.

The move by U.S. President Donald Trump's administration on China Mobile comes amid growing trade frictions between Washington and Beijing.

The advice comes amid rising trade tensions between the United States and China.

"After significant engagement with China Mobile, concerns about increased risks to USA law enforcement and national security interests were unable to be resolved", the NTIA said in a statement about the mainland firm's 2011 application to the FCC.

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The company had 901.9 million mobile subscribers, 671.8 million of which are on its 4G network, as of May 31.

The FCC wasn't immediately available for comment outside of regular office hours.

It warns that Chinese spying could be facilitated by the proposals and that wouldn't be limited to customers of the China Mobile proposed service, but anything that the network touched - and given that could include USA businesses, that's potentially bigger than the sum of its prats.

Chinese smartphone and telecommunications company ZTE has been in crisis since April when the US Commerce Department banned American companies from selling it vital components.

In its recommendation, the NTIA said its assessment "rested in large parts on China's record of intelligence activities and economic espionage targeting the U.S.", along with China Mobile's size and technical and financial resources.

A Chinese man walks under a China Mobile sign, while talking on the phone.

NTIA, a branch of the Commerce Department, said China Mobile's entry "would pose unacceptable national security and law enforcement risks". In particular, the NTIA was concerned about China Mobile interconnecting with the USA telecoms infrastructure, given the "importance and sensitivity" of that infrastructure for national security and law enforcement.

Those companies are not Chinese state-owned, but are alleged to have close ties with the Chinese government.

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