The Federal Communications Commission said on Tuesday it has added Digitalsystem Technology, an IT company based in California, to its roster of entities that present risks to U.S. national security and has refused the firm authorization to provide international telecommunications services.
The agency said the company - which it identified as having ownership by a Chinese national and links to Chinese telecom firms - could be subject to exploitation by Chinese threat actors. The FCC said there is "significant risk that the government of China and other threat actors could exploit any vulnerabilities to the detriment of U.S. national security and law enforcement interests," and cited concerns about potential collection, disruption or misrouting of U.S. communications.
The FCC singled out Digitalsystem Technology's reported relationships with Hong Kong-based PCCW as well as China Unicom and China Mobile. The agency said those ties, combined with the company's ownership structure, supported its determination that the company could not be granted authority to provide international telecommunications services.
The company and the Chinese Embassy in Washington did not immediately respond to requests for comment, according to the FCC statement.
The action follows prior steps by the FCC to restrict Chinese telecommunications firms from operating in the U.S. Previously, the commission barred China Mobile, China Telecom and China Unicom from providing international telecommunications services to the United States. On October 15, the FCC said it was moving to revoke the ability of HKT, a major Hong Kong carrier and subsidiary of PCCW, to operate in the United States.
The FCC also noted that Digitalsystem's website previously named Huawei, Dahua, Hikvision, ZTE and other Chinese manufacturers as partners; the site was later updated to refer to those companies as clients. In related policy moves, the agency in recent weeks announced bans on the import of additional equipment from a group of Chinese manufacturers including Huawei, Dahua, ZTE and Hikvision, and said it would bar new models of Chinese drones and routers from import.
Context provided by the commission emphasized national security and law enforcement risks tied to foreign ownership and commercial relationships. The FCC's decision to both list Digitalsystem Technology as a potential threat and to deny it permission to provide international services underscores the regulatory scrutiny applied to companies with links to Chinese telecom providers.
The statement in the FCC order specifically referenced risks that could arise from the collection, disruption or misrouting of U.S. communications, and it cited the company's partnerships and ownership as the factual basis for its denial of authorization.
Separately, the article noted that the current U.S. administration has taken a firm stance toward Chinese telecom companies, a posture reflected in the FCC's recent and ongoing restrictions.