FCC's New Submarine Cable Rules: National Security and AI Era

The Critical Role of Submarine Cables

• 💡 Submarine cables are the unsung heroes of global communication, carrying 99% of high-speed internet traffic and facilitating trillions of dollars in daily financial transactions.
• 🌐 With approximately 600 cables globally and 90 connecting to the U.S., they are vital for ordinary, military, and increasingly, AI data center interconnectivity.
• 🚀 The industry is shifting, with hyperscalers like Amazon, Google, and Meta now leading new cable investments, driven by the booming data center and AI sectors.

FCC's Regulatory Authority and National Security

• 📜 The FCC regulates submarine cables through the Cable Landing License Act of 1921, with authority delegated from the President, allowing conditions on licenses.
• 🤝 The FCC relies on Team Telecom (DOJ, DoD, DHS) to review applications for national security risks, typically resulting in mitigation agreements.
• 🏛️ A new Council on National Security has been established within the FCC to centralize and elevate its national security role, fostering information sharing and institutional leadership.

New Submarine Cable Rulemaking Framework

• 🎯 The FCC's new rule is guided by NSPM3 (America First Investment Policy Memorandum), emphasizing that economic security is national security.
• 🛡️ It aims for a streamlined process for allies and U.S. companies while imposing a hard line against foreign adversaries, particularly China.
• ⚠️ The rule addresses various threats, including accidental or malicious cable cuts, cyberattacks on landing stations, and foreign adversary ownership or control of cable infrastructure.

Key Provisions of the New Rule

• 🔒 Applicants must now provide certifications for physical and cybersecurity measures, a new requirement beyond ad hoc mitigation agreements.
• 🚫 A presumption of denial is applied to entities owned by, controlled by, or subject to the jurisdiction of foreign adversaries (China, Russia, Iran, North Korea, Cuba, Venezuela) or those on the FCC's covered list.
• 🇨🇳 Direct cable connections from the U.S. to foreign adversary countries are presumptively denied, codifying existing practices to limit adversary access and potential disruption.
• 🤝 The rule promotes collaboration with trusted allies and partners, recognizing the need for international cooperation in areas like ship repair and maintenance where U.S. capacity is limited.

Future Outlook and Industry Engagement

• 🚀 Future rulemaking proposes a streamlined review process (frequent flyer program) for entities with a proven track record of compliance, incentivizing high national security standards.
• 📈 National security risks to telecom infrastructure, especially submarine cables, are expected to grow due to increasing reliance and geopolitical tensions.
• 💬 The FCC emphasizes public engagement with industry, leveraging its role as an economic regulator to foster collaboration and encourage companies to adopt robust national security practices and decouple from foreign adversaries.