FCC issues submarine cable rules, seeks comment on additional proposals

The Report and Order (“Order”) adopts rules to mitigate national security risks from foreign adversaries, promote investment from the U.S. and trusted allies, and streamline licensing to reduce regulatory burdens.  Specifically, the Order:

• Adopts the Commerce Department’s definition of “foreign adversary” found at 15 CFR § 791.2. Currently, the designated foreign adversary countries are China (including Hong Kong and Macau), Cuba, Iran, North Korea, the Russian Federation, and the Maduro regime (Venezuela).
• Presumptively disqualifies any new license applicants owned or controlled by foreign adversaries or that seek to land cables in adversary countries.
• Prohibits Indefeasible Right of Use (“IRU”) agreements giving foreign adversaries control over submarine line terminal equipment (“SLTE”) on U.S. landings.
• Adopts new certification and disclosure requirements on cable system details, foreign adversary service providers, cybersecurity and physical security plans, and FCC Covered List compliance.
• Requires annual reports on ownership, the use of third-party service providers owned or controlled by a foreign adversary, and risk management plan implementation.
• Consolidates FCC capacity reporting requirements by eliminating the obligation to provide a cable operator report and adding questions on available and planned capacity into the capacity holder reports.
• Mandates all licensees to provide updated data, including ownership of SLTE and use of services from Covered List entities or foreign adversaries.

The Order goes into effect 30 days after Federal Register publication, except for rules that require Office of Management and Budget review under the Paperwork Reduction Act.

The Further Notice of Proposed Rulemaking (“FNPRM”) proposes additional security measures, including licensing requirements for SLTEs, annual reporting for entities linked to foreign adversaries, and new certification requirements to further protect U.S. communications infrastructure.  The FNPRM asks:

• Whether SLTE owners and operators should be subject to licensing, routine conditions, and reporting requirements to address national security risks.
• Whether to require applicants for new submarine cables to certify that they do not use equipment or services linked to foreign adversaries or on the Covered List.
• Whether to exempt certain applications from Executive Branch referral if they meet a proposed national security standard, and what criteria should define that standard.
• Whether to require licensees to remove covered equipment and services from systems within a set timeframe.
• How the FCC can promote the adoption of trusted U.S. and allied technologies in submarine cable systems and prioritize related license applications.
• How artificial intelligence in SLTEs and cable systems impacts national security and the appropriate regulatory response.
• Whether to modify or remove rules to reduce delays, adjust license conditions tied to prior mitigation, and improve interagency coordination.

Comments on the FNPRM will be due 30 days after publication in the Federal Register, and reply comments will be due 60 days after publication.

Authored by Ari Fitzgerald, Fernando Margarit, Brittany Buhler, John Castle, Jaclyn Rosen, and Jason (Jay) Mills