U.S. begins to retaliate against China over hack of telecom networks

The Biden administration is beginning to retaliate against China for its sweeping hack of U.S. telecommunications companies earlier this year.

Last week the Commerce Department issued a notice to China Telecom Americas, the U.S. subsidiary of one of China’s largest communications firms, alleging in a preliminary finding that its presence in American telecom networks and cloud services poses a national security risk. The company has 30 days to respond, although the Commerce Department has not said what action it plans to take next. 

The New York Times was the first to report the action, which is a direct response to China’s infiltration of telecom networks earlier this year. The China-backed hacking group known as Salt Typhoon penetrated the networks of numerous companies including Verizon, AT&T and Lumen Technologies, a U.S. official familiar with the matter told to CBS News in October. 

It’s unclear what the impact on China Telecom would be, since the FCC has already limited China Telecom Americas’ ability to operate in U.S. communications infrastructure. In October 2021, the FCC revoked its license to provide phone services in the US. 

The FCC found that China Telecom “is subject to exploitation, influence, and control by the Chinese government and is highly likely to be forced to comply with Chinese government requests without sufficient legal procedures subject to independent judicial oversight.”

China Telecom Americas has not responded to requests for comment.  

U.S. law enforcement and intelligence officials are continuing to try to learn more about the scope of the hack, which targeted U.S. surveillance capabilities used for operations including wiretaps. U.S. intelligence officials routinely seek court authorization to use telecom systems like those targeted in the breach to collect information for law enforcement or national security probes. 

One fear is that the cyberattacks could have allowed the hackers to access information about ongoing U.S. investigations — including those tied to China — through the collection of sensitive data and techniques. 

China’s incursions into U.S. critical infrastructure — including water treatment plants and the electrical grid — have lawmakers on Capitol Hill and the incoming Trump administration warning of a more aggressive retaliatory posture going forward. 

Rep. Mike Waltz, designated by President-elect Trump to be national security adviser, told Margaret Brennan on “Face the Nation” Sunday, “We need to start going on offense and start imposing, I think, higher costs and consequences to private actors and nation state actors that continue to steal our data, that continue to spy on us.”

Last month, Rep. Jim Himes, Democrat of Connecticut and the ranking on the House Intelligence Committee, issued a similar warning. 

“We’re not just going to name and shame,” he said on “Face the Nation.” “We are going to go into their networks and give as good as we got.”