China telecoms face US exit risk as FCC deepens crackdown on data centres

The latest US restrictions on Chinese telecoms operators could ultimately force them out of the American market, analysts said, marking an escalation in Washington’s multi-year crackdown on Chinese technology.

The US Federal Communications Commission (FCC) said on Thursday that it was considering broader measures to bar Chinese telecom carriers from operating data centres in its territory, further restricting Chinese telecoms carriers’ access to US networks and infrastructure.

China Mobile, China Telecom and China Unicom – all on the Covered List of entities deemed to pose national security risks – could be affected, depsite limited financial impact, analyts said.

The US telecommunications regulator said on Thursday that it was considering broader measures to bar Chinese telecom carriers from operating data centres in its territory and further restrict their access to US networks and infrastructure. China Mobile, China Telecom and China Unicom – all on the Covered List of entities deemed to pose national security risks – could be affected.

Under the proposal, US carriers would also be barred from interconnecting with those companies, citing “significant national security concerns” around such links, the FCC said in the draft.

“The proposal marks an escalation in the FCC’s restrictions, from banning Chinese firms from directly providing services to the public and limiting their hardware, towards deeper controls over underlying internet infrastructure and interconnection protocols,” said Harry Wang Yuxiang, a partner at Tahota Law Firm, who is qualified in China, the UK and California.