What it does The Memorandum Opinion and Order concludes that Digitalsystem is subject to the jurisdiction and control of the government of China through Hui Xie, a Chinese citizen who owns 70% of the company and holds majority control. It also finds that Digitalsystem’s Hong Kong affiliate and other actual or potential relationships, planned handling of U.S. customer records, cybersecurity practices, and lawful-intercept capabilities create exploitable vulnerabilities. The Commission relies on the totality of the unclassified record, including the Committee for the Assessment of Foreign Participation in the U.S. Telecommunications Services Sector’s recommendation; classified evidence provides additional support but is not necessary to the decision.

Who it affects The decision directly affects Digitalsystem, its owners and proposed international telecommunications operations. It also reflects the Committee’s role in reviewing foreign-owned or foreign-controlled telecommunications applications under the Executive Branch foreign-participation process.

Why it matters The order emphasizes that mitigation depends on a baseline of trust, candor, and transparency. Digitalsystem’s conflicting or incomplete responses, combined with China-related jurisdictional and operational risks, led the FCC to find that it could not rely on the company to comply with or report violations of mitigation terms.

Key dates and numbers

• Application filed March 26, 2024; Committee recommendation filed April 2, 2026.
• Order adopted June 30, 2026, and released July 7, 2026.
• Section 214 file: ITC-214-20240326-00054; FCC number: FCC 26-44.
• Petitions for reconsideration may be filed within 30 days of release.