PCCW-Telstra Venture Stored Phone Data for FBI for Over a Decade

PCCW Ltd. (8) and Telstra Corp., partners in an undersea cabling venture, stored phone and Internet data for the FBI and U.S. Justice Department under terms of a 2001 agreement with the agencies, Telstra said.

The pact, signed by Richard Li’s PCCW after it formed its joint venture Reach with Telstra, requires the Australian company to store billing records for two years, according to a copy of the agreement posted online by news website Crikey, which first reported the deal yesterday. The venture also guaranteed it would be able to provide U.S. authorities with copies of stored data, call logs, subscriber information, and billing data, according to the document.

The revelation comes amid increased scrutiny of government data gathering as prosecutors in the U.S. seek fugitive security contractor Edward Snowden, who exposed classified programs and said the U.S. had been hacking into computers in Hong Kong and mainland China since 2009.

PCCW transferred its 50 percent interest in Reach to its listed subsidiary HKT Trust and HKT Ltd. in 2011, according to HKT’s 2012 annual report.

While licensing terms require HKT’s U.S.-based operations to respond to appropriate inquiries made by U.S. law enforcement agencies, those requirements don’t apply to HKT’s non-U.S. based operations, including in Hong Kong or its customers in Hong Kong, the South China Morning Post reported today, citing an statement from PCCW on behalf of HKT.

Three calls made and an e-mail sent to two of PCCW’s spokesmen weren’t immediately returned outside business hours.

Operating Obligations

The document was signed as part of Reach’s operating obligations in the U.S., which required it to comply with U.S. domestic law, Telstra spokesman Scott Whiffin said by e-mail. The copy posted online was genuine, “as far as I can determine,” he said by phone.

“We understand similar agreements would be in place for all network infrastructure in the U.S.,” Whiffin said by e-mail. “When operating in any jurisdiction, here or overseas, carriers are legally required to provide various forms of assistance to government agencies.”

Reach operates 82,300 kilometers (51,150 miles) of undersea cables in the Pacific linking China, Japan, Australia, New Zealand and Fiji to Hawaii and the continental U.S., according to its website.

It also has a transatlantic cable joining New Jersey and Long Island to Cornwall in England and Brittany in France, as well as satellite and regional networks which don’t connect directly to the U.S., according to the site.

Telstra is Australia’s largest phone company and PCCW controls Hong Kong’s biggest telecommunications operator.

To contact the reporters on this story: David Fickling in Sydney at dfickling@bloomberg.net; Natasha Khan in Hong Kong at nkhan51@bloomberg.net

To contact the editor responsible for this story: Stanley James at sjames8@bloomberg.net

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