The FCC has revoked Pacific Networks' and its wholly-owned subsidary ComNet's authority to provide domestic interstate and international telecommunications services within the US.

In a case reminiscent of that involving Huawei, the FCC had serious concerns last year regarding "their retention of their authority to provide telecommunications." Both Pacific Networks and ComNet were given an opportunity to present arguments and evidence to prove otherwise, but ultimately the Commission decided to remove section 214 authority from both carriers.

The evidence against Pacific and ComNet is extensive, with the FCC noting that both companies are US subsidiariers of a Chinese state-owned entity, meaning they are subject to "exploitation, influence, and control" by the Chinese government. Further to that, ownership and control by the Chinese government raises significant national security and law enforcement risks, including the potential for espionage and the disruption/misrouting of US communications.

The FCC also makes it clear that both the national security and law enforcement risks could not be solved with further mitigation. In other words, the only way to remove the threat is to remove the companies from the US telecommunications infrastructure altogether. Both Pacific and ComNet now have sixty days in which to cease all US operations, with the FCC producing a consumer guide to advise their customers of the options they have.

As Reuters reports, Pacific's US lawyer, Jeffrey J. Carlisle, told the FCC in a letter that neither company poses a national security threat and that their primary business is "providing retail calling cards." However, he also confirmed that Pacific and ComNet are owned by CITIC Telecom International Holdings, which is a Chinese state-owned company.