The Federal Communications Commission on Friday said it is investigating whether companies aligned with the People’s Republic of China are still selling banned equipment or services in the U.S.
The FCC sent letters of inquiry and at least one subpoena to several companies that were deemed potential security risks. The agency is now gathering information to determine what additional actions it may need to take.
Even after being placed on the agency’s “covered list”, some of these companies may still be operating in the U.S. and selling equipment that poses an unacceptable risk to national security, according to the FCC.
“We have reason to believe that, despite those actions, some or all of these Covered List entities are trying to make an end run around those FCC prohibitions by continuing to do business in America on a private or ‘unregulated’ basis,” FCC Chairman Brendan Carr said in a statement. “We are not going to look the other way.”
The probe was announced a week after the FCC launched a Council on National Security, which is focused on the growing threat of state-linked cyber espionage and other national security threats targeting the U.S.
The agency is particularly concerned about state-linked activity related to the PRC, which has been linked to a series of cyber intrusions into U.S. telecommunications companies in 2024.
The FCC said it is working with other U.S. agencies on the investigation and will take action to close any loopholes allowing companies to continue malicious operations.
The covered list entities referenced in the investigation include Huawei Technologies Co., ZTE Corp., China Mobile International USA Inc., China Telecom (Americas) Corp. and others.
The FCC investigation can have a real impact in a couple of different ways to bolster U.S. national security from the impact of prohibited technologies, according to Mark Montgomery, senior director at the Center on Cyber and Technology Innovation at the Foundation for Defense of Democracies.
The FCC can revoke telecom licenses and also not authorize equipment for importation. For example, there have been reports that white-labeled radio frequency–emitting equipment from companies on the covered list has been sold in the U.S., Montgomery said.
A report released earlier this month from BitSight shows at least one-third of the U.S. supply chain relies on software or services from companies designated as Chinese military companies by the U.S. Defense Department.
