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ROUTING THROUGH CHINA
China Telecom, China Mobile and China Unicom have long been in Washington’s crosshairs. The FCC denied China Mobile’s application to provide telephone service in 2019 and revoked China Telecom and China Unicom’s licenses to do the same in 2021 and 2022 respectively. In April, the FCC went further and barred the companies from providing broadband service. A spokesman for the FCC said the agency stands by its concerns.
One factor in the FCC’s decision was a 2020 report from other US government agencies that recommended revoking China Telecom’s license to provide US telephone service. It cited at least nine instances where China Telecom misrouted internet traffic through China, putting it at risk of being intercepted, manipulated or blocked from reaching its intended destination.
“China Telecom’s US operations … provide Chinese government-sponsored actors with openings to disrupt and misroute US data and communications traffic,” authorities said at the time.
China Telecom has previously denied the government’s allegations and told US agencies that routing problems are common and occur on all networks.
The telecoms company sought to reverse the FCC decision, but a US appeals court rejected its arguments, noting that the agencies presented “compelling evidence that the Chinese government may use Chinese information technology firms as vectors of espionage and sabotage.”
ACCESS POINTS, CLOUD UNDER SCRUTINY
The Chinese telecoms companies’ reach extends deep inside the US internet infrastructure.
According to its website, China Telecom has 8 American Points of Presence (PoPs) that sit at internet exchange points, which allow large-scale networks to connect to each other and share routing information.
China Telecom did not respond to requests for comment about its US based PoPs.
According to the FCC, there are “serious national security and law enforcement risks” posed by PoPs when operated by firms that pose a national security risk. In cases where China Telecom’s PoPs reside in internet exchange points, the company “can potentially access and/or manipulate data where it is on the preferred path for US customer traffic,” the FCC said in April.
Bill Woodcock, executive director of Packet Clearing House, the intergovernmental treaty organization which is responsible for the security of critical Internet infrastructure, said traffic flowing through these points would be vulnerable to metadata analysis, which can capture key information about the data’s origin, destination, size and timing of delivery. They also might allow for deep packet inspection, where parties can glimpse the data’s contents, and even decryption.
Commerce investigators are also probing the companies’ US cloud offerings, the focus of the 2020 referral from the Justice Department on China Mobile, China Telecom and Alibaba that prompted the investigations, the people said. The probe was later expanded to include PoPs and China Unicom, whose cloud business was small at the time of the referral, two of people added. Alibaba did not respond to a request for comment.
Regulators fear that the companies could access personal information and intellectual property stored in their clouds and provide it to the Chinese government or disrupt Americans’ access to it, two of the sources said.
Commerce department officials are particularly concerned about one data centre that is part owned by China Mobile in California’s Silicon Valley, according to one of the sources.
China Mobile did not respond to requests for comment about the data centre.
Reuters could not determine the reason for the government’s specific interest in China Mobile’s data centre, but ownership of one provides greater opportunity to mishandle client data, according to Bert Hubert, a Dutch cloud computing expert and former member of a board that regulates Dutch Intelligence and security agencies.
He noted that ownership would make it easier to meddle with clients’ servers at night, for example, by installing backdoors to enable remote access or bypass encryption. Those actions would be much tougher in a data centre with strict security policies where the company merely leases space.
“If you have your own data centre you have your own unique piece of China within the US,” he said.
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