FCC Moves to Ban Chinese Telecoms in the US
The FCC's proposed ban on Chinese telecoms could reshape the US data center landscape. Discover the implications for national security and investment!
The United States government has spent years quietly dismantling Chinese telecom infrastructure from American networks. Now, the FCC is moving to finish the job — and the consequences extend far beyond phone calls.
On April 10, the Federal Communications Commission announced it had tentatively concluded that American and other telecom carriers operating in the US should be prohibited from interconnecting with companies on its "Covered List" — a roster of firms deemed national security threats. The vote is scheduled for April 30 at the FCC's next open commission meeting. The targets: China Mobile, China Telecom, and China Unicom.
But this isn't just about carrier-to-carrier connections. The FCC is explicitly targeting equipment, Points of Presence, and data centers owned or operated by those Chinese players. That detail matters enormously.
What the FCC Is Actually Proposing
The scope here is broader than the headlines suggest. Yes, the FCC wants to cut off interconnection between US carriers and the big three Chinese telecoms. But the proposed measures also extend to companies running hardware from Huawei and ZTE — both already on the Covered List — meaning any carrier that hasn't fully purged that equipment from its network could face sanctions.
The April 30 vote isn't a formality — it's the culmination of a regulatory campaign that's been building for nearly a decade.
Also on the agenda for that same meeting: a proposal to ban all Chinese laboratories from testing electronic devices for use in the US market. That's a separate but related escalation, and together the two measures signal that the FCC is approaching a comprehensive hard line on Chinese technology in American communications infrastructure.
The groundwork was laid well before this administration. China Mobile International (USA) lost its operating license in 2019. China Telecom (Americas) followed in 2021. China Unicom (Americas) and two smaller operators — Pacific Networks Corp. and ComNet (USA) LLC — were banned in 2022. As recently as December 2025, the FCC floated the idea of banning the three major Chinese carriers from US network connections specifically to crack down on robocalls. The current proposal is the logical endpoint of that trajectory.
The Data Center Angle Everyone Is Missing
Most coverage of this story focuses on the carrier-interconnection piece. That's the obvious angle. What deserves more attention is the explicit mention of data centers.
The FCC's proposed action would address national security risks from companies interconnecting with "equipment, Points of Presence (PoPs), and data centers owned or operated by" these Chinese carriers. Chinese telecoms — like most major global carriers — operate PoPs and colocation footprints in major US markets to support international traffic, enterprise customers, and interconnection services. Those facilities are now directly in the regulatory crosshairs.
For the US data center industry, this creates both an operational disruption and a leasing opportunity — depending on which side of the equation you're on.
Operators hosting Chinese carrier infrastructure will face pressure to terminate those agreements or risk being caught in the compliance web. On the flip side, enterprise customers who currently rely on Chinese carrier PoPs for their international connectivity — multinational companies with significant Asia-Pacific operations, for instance — will need alternative arrangements. That creates demand for US-operated alternatives, whether through Tier 1 carriers, neutral colocation providers, or direct cloud connectivity paths.
The HKT situation is a useful preview. In October 2025, the FCC revoked the US license of Hong Kong Telecom International, citing its close links to China — specifically its affiliation with China Unicom, which holds an 18 percent stake in HKT's parent company PCCW. That license revocation forced a real unwind of actual business relationships. The April 30 vote, if it passes, would trigger similar disruptions at a far greater scale.
Why National Security Is the Actual Driver
It's easy to be cynical about "national security" as a regulatory justification — it gets invoked broadly. But the concerns here have a specific technical basis that's worth understanding.
Telecom interconnection is not a passive handshake. When a US carrier connects to a foreign carrier's network, traffic flows across shared infrastructure. That creates potential access points for interception, metadata collection, and, in some scenarios, traffic manipulation. The Covered List exists precisely because the US intelligence community has assessed that certain foreign carriers are either controlled by or subject to compelled cooperation with foreign governments.
China's National Intelligence Law, enacted in 2017, requires Chinese companies to "support, assist, and cooperate" with state intelligence work upon request. For Chinese telecoms operating US network infrastructure or interconnecting with US carriers, that legal obligation creates a structural vulnerability that technical controls alone can't fully mitigate.
The FCC isn't banning Chinese telecoms because of what has happened — it's banning them because of what could happen, and the legal framework in China makes that possibility structural rather than theoretical.
That distinction matters for investors and operators trying to assess whether these rules will stick across administrations. The intelligence community's consensus on this threat has been durable across both Republican and Democratic presidencies — the specific rules have changed, but the direction has been consistent since at least 2019.
What This Means for Investors and Operators
Markets have largely priced in the broad strokes of US-China telecom decoupling. What hasn't been fully priced in is the second-order disruption to colocation providers, neutral interconnection facilities, and enterprise customers with cross-Pacific connectivity dependencies.
For infrastructure investors, the near-term read is straightforward: US-operated international connectivity infrastructure becomes more valuable as Chinese alternatives get squeezed out. Carriers and colocation operators that have already positioned themselves as compliant, US-controlled alternatives are in the better seat.
The more complex calculation involves enterprise customers — particularly Fortune 500 companies with significant China operations. Those companies have relied on Chinese carrier PoPs in the US as efficient, cost-effective on-ramps for their Asia-Pacific traffic. Replacing that infrastructure requires time, contract renegotiation, and, in some cases, meaningful cost increases. That's a real friction point, even for companies broadly supportive of the regulatory direction.
For any investor or operator with exposure to carrier-neutral data centers or interconnection hubs in major US metro markets — particularly New York, Los Angeles, and the Bay Area, which are the primary landing points for transpacific connectivity — the FCC's move is directionally positive for asset values. Demand for compliant interconnection capacity is about to increase.
What Comes Next
If the April 30 vote passes — and the FCC's own "tentative conclusion" language suggests the votes are there — implementation will be the real story. The FCC will need to specify timelines for carriers to terminate existing interconnections, establish a process for compliance verification, and likely create some form of waiver or wind-down period for carriers with existing infrastructure entanglements.
The parallel proposal to ban Chinese labs from device testing adds another dimension. If that measure also passes, it accelerates the broader decoupling of Chinese technical infrastructure from US communications systems at every layer — from device certification through network interconnection to data center operations.
Watch for the enterprise response carefully. Large multinationals quietly lobbied against some of the earlier FCC actions, preferring gradual phaseouts to hard cutoffs. That dynamic is likely to resurface. The lobbying pressure won't stop the votes, but it may shape implementation timelines.
The longer arc is toward a bifurcated global internet — not just at the content layer, where it's already largely true, but at the physical infrastructure layer. The FCC's proposed ban is a significant acceleration of that trajectory. Operators, investors, and enterprise IT teams that are still treating this as a hypothetical future problem are already behind.
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