As Assistant Attorney General of DOJ's National Security Division John Demers stated, China's "overall economic policy [is to] develop[ ] China at American expense." U.S. government officials have also warned that China will use its state-owned carriers to further its national interests. At least one Chinese carrier is publicly alleged to have hijacked and rerouted communications data through China. This allows Chinese actors to access sensitive communications, regardless of whether the data is encrypted.
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The Subcommittee reviewed the federal agencies responsible for regulating and monitoring foreign telecommunications carriers operating in the United States. Although foreign carriers have operated in the United States for decades, the U.S. government had no statutory authorities to monitor the risks associated with these carriers. This is especially evident when reviewing the agencies' oversight of Chinese state-owned carriers.
The FCC regulates the U.S. telecommunications market. Carriers seeking to provide international telecommunications services between the United States and foreign points must apply for and obtain authorization from the FCC. The FCC's process is aimed at protecting the U.S. market from anti-competitive behavior in foreign markets. Thus, in evaluating applications, the FCC considers whether the foreign carrier's proposed services are in the public interest. Once authorization is granted, the Subcommittee found that it effectively exists in perpetuity; the FCC does not periodically review existing authorizations.
The FCC historically relied on "Team Telecom" to assess national security and law enforcement risks associated with a foreign carrier's provision of international telecommunications services. The FCC's public interest calculation involves weighing the national security, law enforcement, trade, and foreign policy implications associated with a foreign carrier's proposed services. The FCC has recognized, however, that it lacks the subject-matter expertise to evaluate these topics, and thus, it relies on certain Executive Branch agencies for guidance. For years, three agencies—DOJ, DHS, and the Department of Defense ("DOD"), which until recently were collectively referred to as "Team Telecom"—were tasked with evaluating national security and law enforcement concerns. Where Team Telecom believed that risks may exist, it attempted to mitigate those risks through a security agreement with the foreign carrier. These agreements provided Team Telecom with oversight capabilities, including the right to visit the carrier's U.S.-based facilities. If Team Telecom opted not to enter into a security agreement with a foreign carrier, it had no insight into the carrier's operations.
These measures were ineffective as Team Telecom lacked formal statutory authority, leaving its operations unstructured and ad hoc. Because of the lack of
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