The U.S. Federal Communications Commission has taken a significant step toward barring Hong Kong-based telecom giant HKT from operating within American networks, citing escalating national security risks tied to its affiliations with Chinese entities. This move, announced on October 15, 2025, underscores the intensifying scrutiny of foreign telecom operators amid broader U.S.-China tensions, particularly in the realm of data security and infrastructure protection.

HKT, a subsidiary of PCCW and one of Hong Kong’s largest telecommunications providers, holds authorizations to offer international and domestic services in the U.S. However, the FCC’s order to show cause demands that HKT explain why its operating rights should not be revoked, pointing to its connections with China Unicom, a state-controlled firm already blacklisted by the agency for posing threats to U.S. communications.

National Security Implications and Regulatory Precedents

The decision builds on a pattern of FCC actions against Chinese-linked telecoms, including prior bans on companies like China Telecom and China Mobile. According to details from the Federal Communications Commission‘s official release, HKT’s affiliations raise concerns about potential espionage or data vulnerabilities, especially given China Unicom’s inclusion on the FCC’s “Covered List” due to determinations by U.S. intelligence agencies.

Industry experts note that this expulsion could disrupt international calling routes and data transit services that rely on HKT’s infrastructure. The order, jointly issued by the FCC’s Office of International Affairs, Wireline Competition Bureau, and Enforcement Bureau, gives HKT 30 days to respond, after which revocation proceedings may commence if the explanations are deemed insufficient.

Affiliations Under the Microscope

At the heart of the issue is HKT’s ownership structure. Controlled by billionaire Richard Li’s PCCW, the company has indirect ties to China Unicom through shared interests, which the FCC argues could allow influence from the Chinese Communist Party. As reported by Bloomberg, this action intensifies pressure on Hong Kong’s business elite, including the Li family, amid the city’s evolving status under Beijing’s tightening grip since the 2020 national security law.

The broader context involves U.S. efforts to safeguard critical infrastructure from foreign adversaries. Similar measures have targeted Huawei and ZTE equipment, reflecting a policy shift toward “secure and trusted” networks as outlined in executive orders from both the Trump and Biden administrations.

Potential Economic and Geopolitical Fallout

For HKT, the ban could mean losing access to lucrative U.S. markets, affecting everything from submarine cable landings to voice traffic routing. Reuters highlights that this is part of a wave of restrictions, with the FCC previously revoking authorizations for other China-affiliated carriers, leading to operational shutdowns and rerouting challenges for global telecom players.

Geopolitically, the move signals Washington’s hardening stance on Hong Kong entities, treating them increasingly as extensions of mainland China. Analysts from CNBC suggest it may prompt retaliatory actions from Beijing, potentially escalating trade frictions in the tech sector.

Industry Responses and Future Outlook

Telecom insiders are watching closely, as the decision could set precedents for other foreign operators with opaque ownership. HKT has yet to publicly respond, but sources indicate it may argue that its operations are independent and compliant with U.S. laws. Meanwhile, U.S. carriers like AT&T and Verizon stand to benefit from reduced competition, though they face the task of filling gaps in international connectivity.

Looking ahead, this FCC initiative aligns with bipartisan efforts to fortify supply chains, as evidenced by recent legislation like the CHIPS Act. For global telecom firms, the message is clear: affiliations with high-risk entities will invite rigorous vetting, reshaping international partnerships in an era of heightened vigilance. As the 30-day clock ticks, the outcome could redefine boundaries for cross-border telecom operations, emphasizing security over seamless global integration.