The US Court of Appeals for the District of Columbia Circuit Tuesday denied China Telecom Corporation’s challenge to the Federal Communications Commission’s (FCC) order revoking the Chinese state-owned telecommunications company’s authority to operate in the US. Circuit Judge Karen LeCraft Henderson authored the unanimous three-judge panel decision.

On appeal, the court vacated the district court’s ruling and remanded the case back with instructions to dismiss the case as moot. The court noted that it had already ruled that the FCC’s revocation decision was valid in a companion case without considering the classified evidence. Therefore, the court concluded that the issue was moot because the district court’s order denying disclosure “no longer poses a risk of continuing legal consequences.” 

In November 2021, the FCC used classified evidence to revoke China Telecom’s authority to operate in the US. The FCC found that China Telecom is subject to exploitation, influence and control by the Chinese government. The FCC also found that China Telecom “is highly likely to be forced to comply with Chinese government requests without sufficient legal procedures subject to independent judicial oversight.” Additionally, the FCC found that China Telecom’s conduct towards the FCC and other agencies demonstrates a lack of trustworthiness and reliability that “erodes the baseline level of trust” that the FCC requires for telecommunication carriers’ operations in the US.

The FCC obtained this evidence through electronic surveillance pursuant to the Foreign Intelligence Surveillance Act of 1978 (FISA). China Telecom requested disclosure of the classified evidence, but the district court denied this request and sided with the FCC. China Telecom appealed the decision.

As a result of Tuesday’s decision, the FCC’s decision to revoke China Telecom’s authority remains in effect.