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Photo: Alex Tai/SOPA Images/LightRocket via Getty Images

The Justice Department led a group of executive branch agencies in calling on federal regulators Thursday to revoke a Chinese state-owned telecom company's permission to provide service in the U.S., citing national security concerns.

Why it matters: It's the latest crackdown from the federal government on China-based communications companies amid tensions between Washington and Beijing over a range of issues.

What's happening: Officials from the DOJ, Office of the U.S. Trade Representative and the departments of Homeland Security, Defense, State and Commerce found "substantial and unacceptable national security and law enforcement risks" in reviewing China Telecom's operations in the U.S.

  • They want the Federal Communications Commission to revoke a 2007 authorization letting the company provide service. China Telecom's U.S. offerings include a wireless service aimed at Chinese Americans and Chinese tourists and lines for privately transferring data internationally, according to a filing from the agencies.
  • The agencies said the U.S. wing of China Telecom has failed to comply with the requirements related to the 2007 authorization, and also raised concerns about its status as a subsidiary of a state-owned enterprise.
  • The company's U.S. operations offer opportunities for state actors to engage in malicious cyber activity, the Justice Department warned.
"Today, more than ever, the life of the nation and its people runs on our telecommunications networks. The security of our government and professional communications, as well as of our most private data, depends on our use of trusted partners from nations that share our values and our aspirations for humanity."
— John C. Demers, assistant attorney general for National Security

Yes, but: China Telecom denied the U.S. agencies' allegations, calling them "procedurally unprecedented" in a statement.

  • "The company has always been extremely cooperative and transparent with regulators. In many instances, we have gone beyond what has been requested to demonstrate how our business operates and serves our customers following the highest international standards."

Flashback: The FCC last year voted to deny a request from China Mobile, another state-owned telecom company, to provide service in the U.S.

  • "The FCC has been looking at this issue," an FCC spokesperson said in a statement. "We welcome the input of the executive branch agencies and will review it carefully." 
  • GOP Commissioner Brendan Carr sought a review of China Telecom and fellow Beijing-controlled enterprise China Unicom's ability to operate in the U.S., as did Senate Minority Leader Chuck Schumer and GOP Sen. Tom Cotton.
  • "Last year, I encouraged the national security agencies to examine China Telecom and to provide us with their views on whether we should revoke their authorizations," Carr tweeted Thursday. "The evidence I saw certainly called the authorizations into question. Glad DOJ acted."

Editor's note: This story has been updated with a statement from China Telecom.

Go deeper

49 mins ago - Politics & Policy

Scoop: Biden plan expected to include at least $500B for climate

Photo: Stephanie Keith/Bloomberg via Getty Images

The White House is privately telling lawmakers the climate portion of President Biden's roughly $2 trillion social spending plan is "mostly settled" and will likely cost more than $500 billion, two sources familiar with the talks tell Axios.

Why it matters: A pricetag of $500-555 billion is a huge number and, if it holds, would likely be the single biggest component of the sweeping package. It also isn't far off from the roughly $600 billion proposed when the bill was expected to cost $3.5 trillion.

56 mins ago - World

U.S. presses Gulf countries to help resolve Sudan coup crisis

Jake Sullivan briefs the press. Photo: Chip Somodevilla/Getty

The Biden administration has asked its partners in the Gulf and elsewhere to press the Sudanese generals who carried out a coup on Monday to release captives including Prime Minister Abdallah Hamdok and to reinstate the civilian government, White House National Security Adviser Jake Sullivan said in a press briefing on Tuesday.

Why it matters: The U.S. has limited influence over coup leader Gen. Abdul Fattah al-Burhan and other military leaders, many of whom have close ties to Saudi Arabia and the United Arab Emirates.

Higher prices are the new norm, with no end in sight

Illustration: Aïda Amer/Axios

Companies are making money at record rates thanks in part to customers who are willing to pay higher prices.

Why it matters: In order to keeping that corporate profitability streak going, shoppers should expect sticker prices to stay high or become more expensive well into 2022. Fewer promotions and shallower discounts will also become the norm as inventory levels remain low.