U.S. rules have never allowed Chinese telecoms to plug directly into the country's communication networks. U.S. carriers also face a ban on Chinese-made networking gear, like equipment from Huawei, in their own systems.
There is a quieter gap in those rules, though: data centers. An upcoming House Select Committee on China report says that gap created real security problems.
A person familiar with the matter, who requested anonymity, said the panel could release the findings as soon as Tuesday, August 4, 2026.
The report found that carrier networks regularly included routes to gear and server facilities possibly linked to Chinese telecoms that are otherwise kept out of the U.S. market.
Those routes tied U.S. carriers to systems that Salt Typhoon, a Chinese hacking group, had broken into. According to the report, the carriers did not realize how much cyber danger those links created.
This is not about the main cables that carry your calls. The problem sits in what the report calls secondary connections, the indirect routes to the wider digital world that federal regulators do not directly police.
Salt Typhoon is not a stranger to U.S. telecoms. Back in 2024, U.S. intelligence blamed the group for a spying campaign that broke into several American carriers.
Get the free Always Be Buying eBook and learn the simple system for building wealth on any income
The targets included the phones of prominent politicians, including Donald Trump when he was a presidential candidate. The attackers sought the communications and call logs of a few political and government figures, rather than engaging in mass data collection.
AT&T, Verizon, and Lumen Technologies have acknowledged that Salt Typhoon hit them. T-Mobile said unusual activity on its network equipment alerted it to an attempted breach.
The U.S. has already spent billions of dollars to strip Chinese-made components out of telecom networks. But Chinese companies can still supply equipment and support inside data centers, and now regulators are looking at that gap.
On Tuesday, Reuters said the FCC may be preparing to block Chinese-built network hardware inside data centers. That possible action would directly answer the report's findings, according to the person familiar with the matter.
An FCC spokesperson did not respond when asked for comment. The agency started moving in April, when it opened a preliminary rulemaking that could tighten foreign companies' access to server facilities.
The early focus is on firms already on its "covered list": China Mobile, China Unicom, Huawei, and ZTE, companies already shut out of direct U.S. operations and sales.
Representative Ro Khanna, the committee's top Democrat, said the report is a reminder that Chinese telecom risk does not disappear at the border.
"This report shows the importance of continued oversight of PRC-linked telecommunications companies operating in the US," he said.
He added that Congress should keep addressing risks to Americans' data and make sure the agencies in charge of securing communications networks have the resources to respond to threats.
The technical details are dense, but the idea is not. The networks that carry your calls and texts depend on more than towers and cables.
The data centers behind those networks are part of the system, and that is exactly where Washington is looking now. For investors, the quiet takeaway is that network security is now a business cost, not just a technology problem.
When data-center links become a regulatory target, telecoms have to decide how much to spend to fix them. How much that cleanup costs, and which companies end up paying it, is where this story goes next.
Download the free Always Be Buying eBook and start putting your money to work today