FCC Denies Telecom Service License to U.S. Firm with Chinese Ownership
Claire Weston
The FCC added Los Angeles–based Digitalsystem Technology to its national-security risk list and denied its application to provide international telecom services, citing Chinese-citizen ownership and ties to Chinese telecom firms. This means → the FCC's scrutiny has expanded beyond Chinese state-owned carriers to US-incorporated companies with Chinese-linked ownership.
What did this company do, and why was it denied?
Digitalsystem Technology, based in Los Angeles, applied to provide international telecom services in the US. The FCC denied the application outright and placed the company on its national-security risk list.
The FCC cited two core reasons: the company is owned by Chinese citizens, and it has working relationships with Chinese telecom firms.
This means → the denial was not triggered by any specific violation — the ownership structure and business ties alone were enough to block the application.
Which Chinese firms is it linked to?
The FCC named three partners: HKT (0008.HK), a unit of Hong Kong–listed PCCW; China Unicom (0762.HK); and China Mobile (600941.SS).
The company's website had also listed Huawei, Dahua, Hikvision, and ZTE as partners — later relabeled as "customers."
In plain terms = virtually every company in its supply chain is already on the US government's radar. Changing a label from "partner" to "customer" does not ease the FCC's concerns.
What specific risk is the FCC worried about?
The FCC stated it fears US communications could be collected, disrupted, or misrouted.
In plain terms = the concern is that data flowing through this company's network could be intercepted, cut off, or redirected to places it should not go.
The FCC's own words: "There is a significant risk that the Chinese government and other threat actors could exploit any vulnerability to harm US national security."
Is this a one-off or a pattern?
This is not an isolated case. The FCC has already banned China Mobile, China Telecom, and China Unicom from providing international telecom services in the US.
In October 2025, the FCC launched proceedings to revoke HKT's US operating authorization.
Last month the FCC broadened its import ban on equipment from Huawei, Dahua, ZTE, and Hikvision, and proposed barring US carriers from interconnecting with Chinese telecom firms deemed national-security risks.
This reflects a clear expansion path: state-owned giants → Hong Kong–linked carriers → US-incorporated companies with Chinese ownership. The perimeter of scrutiny keeps moving outward.
Content is for reference only, not financial advice.