UPDATE 2-China Unicom warns planned US crackdown could disrupt global communications

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By David Shepardson

- China Unicom's U.S. unit warned that a Trump administration proposal to prohibit U.S. telecommunications carriers from interconnecting with Chinese telecom firms deemed national security risks could cause severe disruption to the global communications network.

China Unicom 0762.HK said in a filing on Tuesday with the Federal Communications Commission that the proposal would "harm U.S. companies with significant business and supply chain interests in China."

The FCC has proposed barring U.S. and other telecommunications carriers operating in the U.S. from interconnecting with China Unicom, China Mobile 600941.SS, China Telecom 601728.SS and others, saying they pose national security risks.

"Chinese-funded telecommunications operators collectively serve as the primary gateways for communications traffic flowing between the United States and China, the world’s two largest economies," China Unicom said.

"A blanket prohibition on interconnection with these entities would fundamentally fracture a critical segment of the global communications network."

The FCC, which did not immediately comment on Tuesday, also said in April it was considering banning Chinese telecoms companies which own data centers in the United States or so-called Points of Presence, which ⁠sit at internet exchange points, from interconnecting with other companies. That would effectively require Chinese telecoms to stop operating those U.S. centers.

USTelecom, a trade group representing AT&T T.N, Verizon VZ.N, T-Mobile and other U.S. carriers, said in a filing it opposed revoking interconnection authority for Chinese carriers.

The group argued the proposal "could reduce U.S. provider visibility into risky traffic flows, push communications through foreign or less accountable intermediaries, create uncertainty for ordinary commercial and operational communications, and disrupt technical safeguards that depend on known points of contact and established escalation paths."

USTelecom also said that the rule could "create pressure to avoid ordinary international routing and exchange relationships necessary for global communications."

The FCC could ​also prohibit telecommunications carriers from interconnecting with companies that have installed equipment from companies on the list, including Huawei and ZTE 000063.SZ.

On October 15, the FCC said it was moving to revoke the ‌ability ⁠of HKT, a leading Hong Kong telecoms carrier and subsidiary of PCCW, to operate in the U.S.

In December, the ​FCC banned the import of all new models of Chinese drones and in March banned imports of new models of Chinese-made consumer ​routers, the boxes connecting computers, phones, and smart devices to the internet.