The U.S. Commerce Department is moving to crack down further against the U.S. unit of China Telecom ( 601728.SS ), allowing Beijing to exploit access to American data through its U.S. cloud and Internet businesses, a source told Reuters.
The source confirmed a New York Times report that last week the department sent China Telecom Americas a preliminary determination that its presence on US networks and cloud services poses US national security risks and gave the company 30 days to respond.
In 2021, the Federal Communications Commission revoked China Telecom’s license to operate in the United States, citing national security concerns.
China Telecom Americas did not immediately respond to a request for comment.
There is alarm in Washington over China’s alleged efforts, known as Salt Typhoon, to hack into American telecommunications companies and steal data on US calls. Senators have said the attack represents the largest telecommunications hack in US history.
Reuters first reported in June that the Biden administration was investigating China Telecom, China Mobile ( 600941.SS ) and China Unicom ( 0762.HK ) over their U.S. cloud and internet businesses.
In June, the FCC issued a proposal to boost the networks’ internet security in the face of concerns raised by US officials about China’s ability to divert internet traffic.
Chinese companies still have a small presence in the US, for example, providing cloud services and routing bulk US internet traffic. It provides access to Americans’ data even after the FCC banned the provision of telephone and retail Internet services in the United States.
Border Protocol (BGP) is central to the Internet’s global information routing system. The FCC said China Telecom used BGP vulnerabilities to “misroute US Internet traffic on at least 6 occasions.”
In 2022, the FCC revoked China Unicom America’s permission to operate in the United States. In 2019, the FCC rejected China Mobile’s bid to provide US telecommunications services.
