FCC denies US firm with Chinese links approval to provide telecom services

• The FCC cited Digitalsystem Technology's partnerships with Hong Kong-based PCCW, China Unicom, and China Mobile as national security risks, warning of potential collection, disruption, or misrouting of U.S. communications
• The agency has previously barred China Mobile, China Telecom, and China Unicom from providing international telecom services to the U.S. and is moving to revoke Hong Kong carrier HKT's operating authority
• The FCC recently banned imports of equipment from Chinese manufacturers including Huawei, Dahua, ZTE, and Hikvision, all of which Digitalsystem had listed as partners or clients on its website

FCC Denies Telecom Services to U.S. Firm Over Chinese National Security Concerns

The Federal Communications Commission (FCC) has added California-based Digitalsystem Technology to its list of companies posing national security risks and denied the Los Angeles IT firm permission to provide international telecommunications services in the United States.

Key Decision Factors:

The FCC cited the company's ownership by a Chinese national and partnerships with Chinese telecom firms including Hong Kong-based PCCW, China Unicom, and China Mobile. The agency expressed concerns that "the government of China and other threat actors could exploit any vulnerabilities to the detriment of U.S. national security," particularly regarding the collection, disruption, or misrouting of U.S. communications.

Broader Context:

This action is part of an escalating U.S. crackdown on Chinese telecommunications companies. The FCC has previously barred China Mobile, China Telecom, and China Unicom from providing international services to the United States. In October, the agency moved to revoke HKT's (a PCCW subsidiary) ability to operate in the U.S.

Additional Enforcement Actions:

Last month, the FCC banned imports of equipment from Chinese manufacturers including Huawei, Dahua, ZTE, and Hikvision, along with new models of Chinese drones and routers. The FCC also proposed prohibiting U.S. carriers from interconnecting with Chinese telecom firms deemed security risks, though Chinese companies warn this could severely disrupt global communications networks.

Company Response:

The FCC noted that Digitalsystem's website initially listed Huawei, Dahua, Hikvision, and ZTE as partners before later updating the designation to "clients." Neither Digitalsystem Technology nor the Chinese Embassy in Washington immediately responded to requests for comment.