Roughly 99% of intercontinental internet traffic moves through submarine cables — a fact that, until recently, was a piece of trivia rather than a Beltway preoccupation. That has changed. The Federal Communications Commission's submarine cable rulemaking, opened in November 2024 as the first comprehensive overhaul of the Cable Landing License framework in over twenty years, has continued advancing through 2025 and into 2026, and is now poised to reshape how cables connecting the United States to the rest of the world are licensed, built, owned, and renewed.
The proceeding, coordinated with the interagency Team Telecom (formally the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector), reflects a real and growing set of concerns: physical sabotage risks highlighted by recent Baltic Sea cable cuts, surveillance exposure on cables landing in or transiting adversary jurisdictions, and the heavy concentration of trans-Pacific capacity in the hands of a small number of operators. The Commission's proposed restrictions on ownership stakes, equipment, and landing-station connections involving entities tied to foreign adversaries — most prominently Chinese state-linked carriers like China Telecom and China Mobile, both of which have already had their domestic Section 214 authorizations revoked — are a logical extension of policy the US has been edging toward for years.
What the rulemaking actually does
The Notice of Proposed Rulemaking and follow-on items, adopted by the Commission and detailed in its public docket, propose several substantive changes:
- Periodic license renewal (rather than indefinite licenses), so that risk assessments can be refreshed as geopolitics and ownership structures evolve.
- Expanded reporting on ownership, equipment vendors, and landing-station arrangements, with heightened scrutiny where covered list entities — including Huawei and ZTE — appear in the supply chain.
- Restrictions or presumptions against capacity sales to, and ownership stakes by, entities controlled by foreign adversaries identified under the Department of Commerce's ICTS rules.
- Tighter timelines and standards for Team Telecom referrals, building on the 2020 executive order that formalized the committee.
None of this is, in isolation, unreasonable. The previous regime — built around one-time licenses and case-by-case national security review — was designed for a world in which cable consortia were dominated by Western incumbents and the dominant policy concern was tariff classification, not geopolitical contestation.
Where the risk is real
It is worth being honest about what has changed. Several recent cable projects originally planned to land in Hong Kong were rerouted after Team Telecom objections, including Google and Meta's Pacific Light Cable Network, which was ultimately allowed to proceed only with its Hong Kong landing dropped. Reports from industry analysts and outlets such as Reuters and the Financial Times have documented sustained pressure on consortia to exclude HMN Tech (the former Huawei Marine) from sensitive routes. Suspected sabotage of cables in the Baltic and around Taiwan has elevated physical resilience from a niche engineering concern to a board-level question.
A modernized framework that bakes these realities into licensing — rather than relying on ad hoc interventions — is a genuine improvement in regulatory clarity. Predictable rules are better than unpredictable vetoes, both for security agencies and for the carriers and hyperscalers financing the cables.
Where proportionality matters
That said, the United States has a strong interest in not over-rotating. Subsea cables are extraordinarily expensive (commonly hundreds of millions of dollars per system), take years to plan and lay, and depend on multinational consortia to be financeable. The Submarine Telecoms Forum and TeleGeography have repeatedly noted that demand for trans-Pacific capacity continues to grow at double-digit rates, driven primarily by US hyperscalers — the same companies that need new routes to keep pace with AI training, cloud, and content delivery workloads.
Several principles should guide the final rules:
- Narrow tailoring. Restrictions should focus on entities credibly tied to foreign adversary governments, not be expanded into a general protectionist screen against foreign capital. European, Japanese, Korean, Australian, and Indian carriers are part of the solution, not the problem.
- Predictable timelines. Periodic renewals are sensible only if they come with clear standards and statutory shot-clocks. Open-ended review is a tax on capital expenditure that ultimately raises connectivity costs for US users and businesses.
- Encourage diversification. The single biggest resilience win is more cables on more routes — including new paths through the Arctic, across the South Pacific, and via Latin America. Rules should make it easier, not harder, to permit and land diversified systems.
- Coordinate internationally. The EU's recent Cable Security Action Plan, the UK's work through Ofcom, and similar moves in Japan and Australia create an opportunity for an aligned, allied framework. Fragmented national rules are an own-goal.
The bottom line
The FCC is right to modernize a rulebook designed for a different era. The risks driving this rulemaking — supply-chain exposure, opaque ownership, physical and cyber sabotage — are not theoretical. But the United States' competitive advantage in the digital economy depends on being the most connected country on earth, not the most insulated. The success of this proceeding will be measured less by how many adversary-linked applications it blocks than by whether, five years from now, more cables land on American shores, serving more routes, with more resilient ownership structures. Security and openness are not opposites here. They have to be engineered together.