United States Senate PERMANENT SUBCOMMITTEE ON INVESTIGATIONS Committee on Homeland Security and Governmental Affairs
Rob Portman, Chairman Tom Carper, Ranking Member
THREATS TO U.S. NETWORKS: OVERSIGHT OF CHINESE GOVERNMENT-OWNED CARRIERS
STAFF REPORT PERMANENT SUBCOMMITTEE ON INVESTIGATIONS UNITED STATES SENATE
THREATS TO U.S. NETWORKS: OVERSIGHT OF CHINESE GOVERNMENT-OWNED CARRIERS
TABLE OF CONTENTS I.
China Views the Telecommunications Industry as Critical to National Priorities ......................................................................................................... 16
China Encourages State-Owned Telecommunications Carriers to Expand Internationally ............................................................................................. 21
The United States Government Has Highlighted National Security Concerns Associated with Chinese State-Owned Carriers Operating within the United States ........................................................................................... 22
The Chinese Government Engages in Extensive Cyber and Economic Espionage Efforts against the United States ............................................. 23
Chinese State-Owned Companies are Subject to Control by the Chinese Government ................................................................................................. 27
Chinese State-Owned Carriers Can Facilitate the Chinese Government’s Espionage Efforts by Hijacking Data through Their Relationships with U.S. Carriers ................................................................................................ 29
EFFORTS TO MITIGATE NATIONAL SECURITY RISKS OF FOREIGN CARRIERS OPERATING IN THE UNITED STATES ........................................ 32
The FCC Regulates the Operations of Foreign Telecommunications Carriers in the United States ....................................................................................... 32
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Evaluate National Security, Law Enforcement, Foreign Policy, and Trade Concerns ....................................................................................................... 34
The FCC Does Not Periodically Review Section 214 Authorizations Once Granted ........................................................................................................ 36
Team Telecom Assessed National Security and Law Enforcement Risks, but It Historically Operated in an
Team Telecom’s Lack of Statutory Authority, Established Procedures, and Limited Resources Hampered its Review Process ..................................... 42
Team Telecom’s Post-Authorization Monitoring and Oversight Was Also Limited and Sporadic .................................................................................. 44
Nearly a Year after the Subcommittee’s Investigation Began, the Administration Took Steps to Formalize Team Telecom ............................. 46
CHINESE STATE-OWNED TELECOM COMPANIES OPERATED IN THE UNITED STATES WITH MINIMAL OVERSIGHT FROM THE FCC AND TEAM TELECOM ...................................................................................................... 48
Team Telecom’s Review of China Mobile USA’s Application Lasted Seven Years ............................................................................................................ 51
Ten Months after Team Telecom’s Recommendation, the FCC Denied China Mobile USA’s Application on National Security Grounds .............. 54
The FCC Streamlined and Approved China Telecom’s and CTA’s Initial Section 214 Authorizations within Two Weeks .......................................... 56
After a Change in Ownership in 2007, Team Telecom Sought a Security Agreement with CTA ................................................................................... 57
Team Telecom’s Oversight of CTA Since 2007 Has Consisted of Two Site Visits and Intermittent Email Communication ......................................... 62
Team Telecom Did Not Engage CTA regarding Public Allegations that China Telecom and Its Affiliates Hijacked and Rerouted Data through China ............................................................................................................ 65
Nearly Two Decades after Obtaining Section 214 Authorization, Team Telecom Recommended CTA’s Authorizations Be Revoked and Terminated ...................................................................................................................... 69