Bipartisan Senate investigation urges more aggressive action against Chinese telecoms

Alarm has been rising in Washington over the extent of Chinese influence in the U.S., with particular focus on universities and their research as well as on concerns around China’s acquisition of critical U.S. technologies that it needs in sectors as diverse as semiconductors and aeronautics.

Now, a new bipartisan investigatory report from the Senate urges even further action, this time in monitoring and potentially outright blocking Chinese telecommunications companies from accessing the American market.

Released this morning by the Permanent Subcommittee on Investigations, the report makes a range of recommendations, including pushing the Trump administration to take a more active role in monitoring Chinese telecom companies like China Unicom and ComNet and also pushing Congress to put more resources and legal heft behind regulations designed to monitor the national security implications of these companies.

At the heart of the investigation, which has gone on for more than a year, is the work of Team Telecom, what we have called here at TechCrunch a “shadowy” informal committee between the departments of Justice, Homeland Security, and Defense that works in conjunction with the FCC to review national security issues within the FCC’s work.

Among its open-ended responsibilities, Team Telecom has focused on reviewing applications for telecom operating licenses by foreign operators as well as opening up new underwater cables for internet traffic, including a key pipe between the U.S. and Asia partially funded by Google and Facebook.

The Trump administration, aligned with reducing Chinese telecom operations in the U.S. and perhaps hearing word of the Senate’s investigation, had previously announced in April a formalization of the process for reviewing the national security implications of telecom licensing that would expand Team Telecom’s authority and bring more transparency.

The Senate’s report notes that executive order, but says it does not go far enough, demanding that the rules be expanded to continually monitor companies receiving licenses. At this time, “Team Telecom” or what is now known as the “Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector” (I’ve dubbed it CAFPUSTSS but that is really hard to type) only reviews applications once at the time of submission and never follows up. From the report:

Team Telecom entered into a security agreement with China Telecom Americas in 2007 and ComNet in 2009. Since entering into the agreements more than ten years ago, Team Telecom conducted only two site visits to each company—or four in total. Only one of those visits occurred before 2017.

In its recommendations, the Senate’s report pushes for continual monitoring of foreign telecom operators so that any changes in its operations would be caught by U.S. investigators.

In addition to expanding the statutory authority of Team Telecom’s new committee, the report also urges more resources be appropriated to fund its work. The report castigated the paltry resources currently assigned to these investigations, noting that “[the Department of Justice and Department of Homeland Security] historically dedicated fewer than five employees to reviewing applications and monitoring compliance with security agreements.“

This most recent report is part of a long line of studies made by the Permanent Subcommittee on Investigations on China, including investigating the country’s Confucius Institutes at American universities, talent recruitment plans such as China’s Thousand Talents Plan, and Chinese cyberattacks on American infrastructure.

The bipartisan nature of the report shows the growing concern among both parties about Chinese influence in the United States, and the increased inter-party cooperation to unify against the country’s perceived threats. Late last month, a bipartisan Senate bill was introduced to eliminate Hong Kong’s special trading status with the U.S. as punishment for China’s passage of a new national security law that critics fear will chill free speech and freedom for the semi-autonomous city.