Page:2020-06-09 PSI Staff Report - Threats to U.S. Communications Networks.pdf/81

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proactively reach out to CUA and ask questions, but CUA might be unwilling to comply.[1] CUA representatives informed the Subcommittee that the company would engage in discussions with Team Telecom if approached.[2] It has also recently publicly expressed that it "would be willing to engage in discussions with the [FCC] and the other relevant U.S. government agencies regarding . . . an agreement that would be acceptable to resolve any national security concerns."[3]

3. CUA Shares Characteristics Highlighted by Team Telecom about China Mobile USA and CTA

CUA has been providing international telecommunications services pursuant to Section 214 authorizations granted nearly 20 years ago with no oversight by Team Telecom.[4] Nevertheless, CUA and its operations share some similar characteristics with China Mobile USA and CTA.[5] CUA is ultimately majority-owned by the Chinese government, it provides a range of telecommunications services in the United States and can expand those services without further FCC approval, and it has established relationships with major U.S. carriers.

CUA is ultimately majority owned by the Chinese government. China Unicom is a state-owned entity that is ultimately owned by SASAC.[6] SASAC currently owns approximately 98 percent of China Unicom.[7] Over time, China Unicom has added additional ownership layers, including holding companies jointly owned by

  1. ↑ Id.
  2. ↑ See Email from Squire Patton Boggs, counsel to CUA, to the Subcommittee (June 3, 2020) (on file with the Subcommittee).
  3. ↑ In the Matter of China Unicom (Americas) Operations Limited, Response to Order to Show Cause, GN Docket No. 20-110, at 15 (June 1, 2020), http://licensing.fcc.gov/cgi-bin/ws.exe/prod/ib/forms/reports/related_filing.hts?f_key=-32708&f_number=ITC2142002072800361.
  4. ↑ CUA stressed to the Subcommittee that, as a U.S. company, it is subject to U.S. corporate laws, has a good record of compliance with its FCC regulatory obligations, and is willing to cooperate with U.S. law enforcement agencies when asked. See Email from Squire Patton Boggs, counsel to CUA, to the Subcommittee (June 3, 2020) (on file with the Subcommittee).
  5. ↑ As noted above, CUA explained to the Subcommittee that it also differs significantly from China Mobile USA and CTA with respect to shareholding structure, corporate governance, and history of compliance with the U.S. government. It further noted that there are many government-owned telecommunications carriers operating in the United States with operations and infrastructure similar to CUA. See Email from Squire Patton Boggs, counsel to CUA, to the Subcommittee (June 3, 2020) (on file with the Subcommittee).
  6. ↑ See China Unicom FY2019 Form 20-F, supra note 434, at 72 (indicating that the ultimate controlling shareholder is Unicom Group, which is controlled by SASAC); Company Profile, China Unicom, https://www.chinaunicom.com.hk/en/about/profile.php; Briefing with China Unicom Americas (Apr. 16, 2020); China Unicom (Americas) Operations Limited, Notification of Pro Forma Transfer of Control of Section 214 Authority, File No. ITC-T/C-20170301-00025, Attach. 1 (filed Mar. 1, 2017), https://fcc.report/IBFS/ITC-T-C-20170301-00025 (unofficial website).
  7. ↑ In the Matter of China Unicom (Americas) Operations Limited, Response to Order to Show Cause, GN Docket No. 20-110, at 18 (June 1, 2020), http://licensing.fcc.gov/cgi-bin/ws.exe/prod/ib/forms/reports/related_filing.hts?f_key=-32708&f_number=ITC2142002072800361.

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