The Federal Communications Commission (FCC) has added California-based Digitalsystem Technology to its list of companies considered a risk to US national security, citing the firm’s ownership by a Chinese national and its links to Chinese telecommunications companies. The agency has also denied the Los Angeles-based IT company permission to provide international telecommunications services, stating that its operations could be exploited by Chinese threat actors.
In its order, the FCC cited concerns over Digitalsystem Technology’s partnerships with Hong Kong-based PCCW, China Unicom and China Mobile. It also noted that the company’s website previously listed Huawei, Dahua Technology, Hikvision and ZTE as partners before later describing them as clients.
Digitalsystem Technology describes itself as a trusted IT solutions provider offering data centre solutions, network points of presence (PoPs), cloud migration, managed IT services and international telecommunications across the United States, Mexico, Brazil, Hong Kong and mainland China.
According to the FCC, Digitalsystem’s international telecommunications services have been added to its Covered List of equipment and services deemed to pose an unacceptable risk to US national security.
The decision followed a recommendation from the Committee for the Assessment of Foreign Participation in the U.S. Telecommunications Services Sector, which concluded that the company’s proposed services could be exploited by China- and Hong Kong-based threat actors, creating risks to US national security and law enforcement interests. The committee also found that the company’s proposed partnerships and business relationships increased those risks and determined that mitigation measures were not feasible because of inconsistent responses and concerns about the company’s reliability during the review process.
After reviewing the recommendation and considering the company’s response, the FCC denied Digitalsystem Technology’s application, stating that foreign adversary control of the company posed substantial and unacceptable national security and law enforcement risks. The agency subsequently added the company’s international telecommunications services to its Covered List under the Secure and Trusted Communications Networks Act.
