FCC Denies Digitalsystem’s Section 214 Authority in China-Control Case
FCC denied Digitalsystem’s international Section 214 bid in an order released July 7, 2026—citing China-linked control, U.S. record access, and cyber risks.
The FCC denied Digitalsystem Technology Inc.’s request for international telecom authorization in a memorandum opinion and order adopted June 30, 2026 and released July 7, 2026 (FCC 26-44).
In the decision, the FCC said granting the application would create substantial national-security and law-enforcement risks tied to foreign jurisdiction/control and to the company’s planned handling of U.S. communications records and cybersecurity—and that the risks could not be addressed through mitigation.
What Digitalsystem sought under Section 214
Digitalsystem applied for authority under Section 214 to provide international telecommunications services between the United States and foreign destinations.
The FCC’s order describes the request as global facilities-based and global resale international telecommunications authority (File No. ITC-214-20240326-00054).
Why the FCC denied the application
A central part of the FCC’s reasoning was a finding that Digitalsystem is subject to China’s jurisdiction and control because of majority ownership. The order states that Digitalsystem’s majority owner is a citizen of China holding 70% ownership and majority control.
The FCC also cited additional concerns—describing partnership and planned-operations risks that it said could create serious national-security and law-enforcement vulnerabilities.
Privacy and security concerns the FCC said were hard to mitigate
The FCC tied its decision to what it described as sensitive U.S. records and cybersecurity risks in Digitalsystem’s planned operations. The order summarizes the Executive Branch Committee’s assertions that, if authorized, Digitalsystem would directly handle communications and access U.S. customer records and communications-related data, including PII, call detail records (CDRs), and bill records.
The FCC said it and the Committee could not trust or rely on Digitalsystem to adhere to mitigation measures—and also could not trust it to report any mitigation violations—in a way that would make mitigation adequate.
How this fits the FCC’s broader Covered List/supply-chain approach
This denial lands amid a wider federal push to treat some communications supply-chain risks as national security and public-safety issues.
For example, the FCC’s Covered List framework is tied to the Secure and Trusted Communications Networks Act (a 2019 act enacted in 2020). In a separate Covered List public notice, the FCC said it would prohibit the continued importation and marketing of certain previously authorized covered equipment added to the Covered List in 2024 or earlier. The FCC said the prohibition takes effect 10 days after Federal Register publication, and it won’t affect the continued use or operation of already-purchased equipment.
What to watch next
The FCC’s order is a final FCC action on the application. It also states that petitions for reconsideration under Section 1.106 may be filed within 30 days of the order’s release.
Bottom line: This case is a reminder that federal telecom licensing decisions can hinge not just on technical capability, but on how regulators evaluate foreign-control jurisdiction and whether cybersecurity and U.S.-record handling risks can realistically be mitigated.
Sources
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