On Tuesday, December 24th, the United States Ninth Circuit Court of Appeals upheld the federal government’s decision to revoke the authorization for China Unicom to operate in the United States.
The three-judge panel of the Ninth Circuit Court of Appeals ruled 2-1, stating that the Federal Communications Commission (FCC) had the authority to revoke the certificate allowing the state-owned Chinese telecommunications operator, China Unicom, to operate in the United States.
China Unicom Operating Company Limited is the U.S. subsidiary of China Unicom, headquartered in California. The company filed a petition for review with the appeals court, seeking a review of the FCC’s revocation order issued in 2022.
China Unicom argued that the FCC did not have the legal authority to revoke its telecommunications certificate in the U.S., alleging that the decision was arbitrary and capricious and did not follow proper procedures.
Circuit Judges Daniel Collins and Daniel Lee, both appointed during the first term of President Donald Trump, voted in favor of upholding the FCC’s decision.
Judge Collins, representing the majority, stated in a 90-page opinion that the FCC, acting under the Communications Act, had the congressional authority to revoke a company’s operating certificate for purposes of “national defense.”
The two judges who voted in favor of the decision believed that the FCC’s revocation was justified because the “national defense” clause empowered the FCC to assess current or future threats when authorizing or revoking certificates.
This decision could potentially result in millions of China Unicom customers losing connectivity with the U.S. or within the U.S.
“The relevant executive branch has explained the changing national security landscape posed by China (CCP) to the United States over the past two decades. China (CCP) now poses a greater threat to the United States, including potential economic espionage, cyber-attacks, and intelligence gathering activities,” wrote Collins.
“A wealth of evidence supports the FCC’s conclusion that China Unicom is ultimately owned by the Chinese (CCP) government, with significant overlap between its board members and those of its parent company and CCP members, making it particularly susceptible to influence, exploitation, and control by the Chinese government,” he added.
Collins further stated that the FCC’s concerns were legitimate; the U.S. is “deeply concerned” that China’s recently enacted Cybersecurity Law and National Intelligence Law may require Chinese companies (including China Unicom’s indirect parent companies) to assist the CCP government in intelligence collection efforts.
“While Unicom asserts that it is not directly bound by these laws, the FCC reasonably finds that Unicom, indisputably a creature of these legal structures, poses a substantive national security risk to the United States,” noted Collins.
He pointed out that China Unicom’s infrastructure and capabilities could be utilized by its parent company and the CCP government to gain unauthorized access, monitor, store, disrupt, and misrepresent U.S. communications content, thereby enabling espionage activities and other hostile behaviors, including communications between the U.S. government and international destinations.
Collins also criticized China Unicom for lacking candor and credibility throughout the litigation process. He noted that Unicom attempted to conceal the fact that its parent company’s board members are all CCP members.
On the other hand, Circuit Judge Carlos Bea, appointed by President George W. Bush, dissented. He argued that the FCC did not have the authority to revoke the operating certificate without external direct intervention, and China Unicom had the right to provide telecommunications services based on its existing certificate.
According to the Courthouse News Service website, China Unicom did not respond to requests for comment on the ruling. The FCC also did not respond to requests for comment.