When we think about the ongoing tech war between Washington and Beijing, massive overseas corporations usually come to mind. However, the latest security blockade hits much closer to home. The Federal Communications Commission (FCC) just denied Digitalsystem, a tech company based right out of Los Angeles, permission to handle international telecom services, placing it straight onto the US national security threat list.
The company in question is Digitalsystem Technology. While it operates on American soil, the FCC decided to step in due to two major red flags: the firm is owned by a Chinese national, and it maintains deep operational ties to state-backed Chinese telecom giants.
The security concerns
The federal government isn’t taking any chances with the networks that route global data. In its official statement, the FCC pointed out that letting a company with these specific connections handle international communications opens up a massive vulnerability. The main worry is that threat actors could easily exploit the setup to intercept, disrupt, or simply misroute sensitive American communications.
The agency’s deep dive into the company revealed partnerships with major overseas players. The list includes China Unicom, China Mobile, and Hong Kong-based carrier PCCW. According to Reuters, there was also a pretty telling detail found on the company’s own website. The FCC noted that Digitalsystem originally listed blacklisted tech manufacturers—such as Huawei, ZTE, Dahua, and Hikvision—as official “partners.” Interestingly, after some scrutiny, the website was quietly updated to refer to them merely as “clients.”
A much bigger lockdown
This move against a local California business shows just how intense the tech crackdown is getting. The FCC has already kicked giant carriers like China Telecom out of the US market. Plus, regulators are currently working to revoke the license of HKT, a major Hong Kong carrier. On top of that, Washington recently banned the import of new Chinese drones and routers.
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