HKT says US order ‘ceased’ as firm reportedly agrees to exit American market

A leading Hong Kong telecommunications carrier has confirmed that an order requiring it to justify its operation in the United States has ceased, after the company reportedly agreed to wind down its business under pressure from a US regulatory agency over national security concerns.

A spokeswoman for Hong Kong Telecom (HKT) told the South China Morning Post on Saturday that the Order to Show Cause issued by the US Federal Communications Commission (FCC) in October requiring it to justify why the carrier’s right to provide international and domestic services to and from the country should not be revoked “has been ceased”.

Reuters reported earlier in the day that HKT had agreed to halt its operations in the US under pressure from the FCC.

Without commenting directly on whether it would wind up its business in the country, the spokeswoman said HKT remained “fully compliant with all applicable regulatory requirements”.

“We will continue to deliver seamless, first-rate service and support to our customers drawing on our trusted established world-class network,” she said.

The FCC issued a notice in October last year requiring HKT to justify why the commission should not revoke its right to provide domestic and international services to and from the United States via an Order to Show Cause.

The basis for a show-cause order appeared to be HKT’s affiliation with China Unicom (Americas), which had been listed on the FCC’s Covered List involving national security determinations.

Since the notice on October 15 last year, HKT had 30 days to file a response.

The US agency said at the time that its action against HKT was part of a wider move to prevent Chinese carriers from providing telecommunications in the United States to safeguard national security.

Other Chinese carriers banned from offering telecommunications services in the US included China Mobile, China Telecom and China Unicom.

The Chinese embassy in Washington said at the time that China opposed the misuse of national security safeguards and the politicisation of trade and technology, while the country would firmly safeguard the legitimate rights and interests of its firms.

In July this year, the FCC also added California-based Digitalsystem Technology to a list of firms posing risks to US national security, citing its partnerships with Hong Kong-based PCCW, China Mobile and China Unicom, as well as its ownership by a Chinese national.

PCCW is the largest shareholder of HKT.

On Thursday, the FCC proposed a ban on Chinese telecoms companies from obtaining American phone numbers through internet-based voice services in a move against illegal robocalls and other malicious activity while balancing national security risks. The commission was due to vote on the proposal on November 19.