FCC Chairman Ajit Pai said in a statement before the commission's vote that the U.S. government had advised his agency previous year to reject China Mobile's application for "national security and law enforcement reasons".
Chinese Foreign Ministry spokesperson Geng Shuang said at the ministry's regular press conference today that Chinese companies are encouraged to follow local laws and regulations.
However, the executive branch agencies said that China Mobile USA's status as a US-registered company "does not diminish the national security and law enforcement risks associated with the indirect ownership and control of China Mobile USA by the Chinese government".
In a letter sent on May 1 to FCC Secretary Marlene Dortch, counsel for China Mobile USA Kent Bressie said that the company believed that the draft order was guided more by tensions in the bilateral US-China relationship than by American commitments to market access, transparency, and timeline elements in basic telecommunications under the General Agreement on Trade in Services. Earlier this month, Pai travelled to the Czech Republic and participated in the discussion of the Prague Proposals which could potentially curb Huawei's rise.
China Mobile told the agency it wouldn't provide domestic telephone or mobile services in the US.
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U.S. concern focused on Chinese law that requires companies to cooperate with state intelligence agencies, which the USA has said could be used for economic espionage or intelligence activities.
Often there is dissent among the five commissioners, usually along partisan political lines, but this time nobody dared stick up for China Mobile. FCC Commissioner Brendan Carr said the United States should also take "additional action" and investigate whether to revoke similar prior approvals for other Chinese-owned carriers, including China Unicom and China Telecom Corp., to operate in the United States.
"Granting China Mobile's application would not be in the public interest", said FCC Chairman Ajit Pai. He said it was a "top priority" to address national security concerns regarding other carriers. The reason? Espionage concerns.
As the USA shuts its doors to Chinese telecom companies, China, by comparison, is opening its telecom industry up for foreign company participation.
FCC Commissioner Jessica Rosenworcel, the agency's senior Democrat, said the Republican-majority FCC is doing too little to ensure network security.
The U.S. and China are also in the middle of high-stakes trade talks.