FCC blocks California telecom firm over Chinese security risks

The Federal Communications Commission has denied California-based Digitalsystem Technology Inc. permission to provide international telecommunications services and added the company’s services to its Covered List, moving against a firm the agency said posed national-security risks through Chinese links and ownership.

The denial, released July 7 and adopted June 30, came after Digitalsystem filed its international Section 214 application on March 26, 2024, and after the National Telecommunications and Information Administration recommended denial on April 2, 2026, on behalf of the interagency Committee for the Assessment of Foreign Participation in the U.S. Telecommunications Services Sector. The application sought global facilities-based and global resale international telecommunications authority.

In its order, the FCC said the risks could not be adequately mitigated. The public-inspection filing identified the Government of the People’s Republic of China as a foreign adversary in this context and said Digitalsystem’s planned operations involving U.S. records and cybersecurity presented serious national-security and law-enforcement risks. The commission said those risks included possible collection, disruption or misrouting of communications.

The Covered List addition, issued the same day, extends to Digitalsystem’s subsidiaries and affiliates and is maintained under Section 1.50002 of the FCC’s rules and Section 2 of the Secure and Trusted Communications Networks Act of 2019.

The FCC has already barred China Unicom and China Mobile from providing international telecom services in the United States. Digitalsystem’s website had listed Huawei, Dahua, Hikvision and ZTE as partners before later changing the description to clients, while the FCC also pointed to ties with Hong Kong-based PCCW and to China Unicom and China Mobile.