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California-based technology company ‘banned’ for Chinese links; FCC order says that Digitalsystem Technology poses an “unacceptable risk to the national security of the United States and …”
TOI Tech Desk / TIMESOFINDIA.COM / Jul 09, 2026, 01:30 IST
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The Federal Communications Commission has added California-based Digitalsystem Technology to a list of companies posing risks to the US national security, citing links to Chinese telecom companies and its ownership by a Chinese national. The FCC also said that it was denying the Los Angeles-based IT company permission to provide international telecommunications services, saying that it could be exploited by Chinese threat actors.In its order, FCC cited concerns about Digitalsystem Technology partnerships with Hong Kong-based PCCW, China Unicom and China Mobile. The FCC also noted that Digitalsystem’s website cited Huawei, Dahua, Hikvision, ZTE and others as partners, which was later updated to describe them as clients. On its website, Digitalsystem describes itself as a “trusted IT solutions provider,” that offers data center solutions and network points of presence (PoPs) across the US, Mexico, Brazil, Hong Kong, and mainland China, and specializes in cloud migration, managed IT, and international telecommunications.What FCC said in its order banning Digitalsystem TechnologyThe Federal Communications Commission’s (FCC or Commission) Public Safety and Homeland Security Bureau (PSHSB or Bureau) maintains a list of equipment and services (Covered List) that have been determined to “pose an unacceptable risk to the national security of the United States or the security and safety of United States persons.” Pursuant to section 2 of the Secure and Trusted Communications Networks Act of 2019 (Secure Networks Act) and sections 1.50002 (a) and 1.50003 of the Commission’s rules, PSHSB announces the addition of certain services provided by Digitalsystem Technology Inc (Digitalsystem) to the Covered List.Specifically, this action applies to Digitalsystem’s international telecommunications services that are subject to section 214 of the Communications Act of 1934 (Communications Act). We make this addition to the Covered List based on a determination made by an Executive Branch interagency body with appropriate national security expertise, including appropriate national security agencies.On April 3, 2026, the FCC received a recommendation from the Committee for the Assessment of Foreign Participation in the U.S. Telecommunications Services Sector (the Committee) to deny Digitalsystem’s application for authorization to provide international telecommunications services under section 214 of the Communications Act (Recommendation).The Committee recommended denying the application due to “the unmitigable and unacceptable risks to the national security and law enforcement interests of the United States.” In summary, the Committee determined that: (1) The services that Digitalsystem is seeking to provide pose risks to the United States because they could be exploited by the PRC and Hong Kong-based threat actors to the detriment of U.S. interests;(2) Digitalsystem’s planned service offerings, proposed partnerships, and existing and potential relationships with service providers exacerbate these risks; and(3) Mitigation measures are infeasible in light of the inconsistent and changing responses by Digitalsystem, which undermine the candor and reliability required of any national-security mitigation partner, and Digitalsystem’s business plans.After reviewing this Recommendation and allowing Digitalsystem an opportunity to respond, the Commission denied Digitalsystem’s application, agreeing with the Committee that, among other things, foreign adversary control of Digitalsystem posed “substantial and unacceptable national security and law enforcement risks.”We find that the Recommendation constitutes a “specific determination” that Digitalsystem’s international telecommunications services “pose an unacceptable risk to the national security of the United States or the security and safety of United States persons” pursuant to section 2 of the Secure Networks Act. Therefore, we conclude that the Commission is required to place the services in this determination on the Covered List.Get the latest technology news and updates. Download the TOI App.
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