FCC Secures Undersea Internet Cables from Foreign Foes
Published Date: 7/27/2026
Rule
Summary
In this document, the Federal Communications Commission (Commission or FCC) adopted a Second Report and Order that promotes the deployment of submarine cables while strengthening national security interests in connection with their modern capabilities. The Second Report and Order establishes a regulatory regime for licensing owners and/or operators of submarine line terminal equipment (SLTE), including granting a blanket license to certain current and future SLTE owners and/or operators that are not currently a licensee. The Second Report and Order adopts certain routine conditions and outlines reporting requirements for SLTE owners and operators. The Second Report and Order also adopts further national security-related routine conditions and certification requirements. Finally, the Second Report and Order adopts an approach to expedite submarine cable deployment by presumptively exempting applications that meet ten national security standards from Commission referral to the Executive Branch agencies.
Analyzed Economic Effects
8 provisions identified: 2 benefits, 6 costs, 0 mixed.
Estimated Aggregate Compliance Costs
The FCC estimates the adopted rules will impose approximately $39.2 million in costs in the first year and about $10.7 million in recurring annual costs thereafter. These totals include one-time cybersecurity plan costs, annual reporting costs, application costs for new licensees, and other notifications.
New SLTE Licensing Requirement
The FCC now requires entities that own or operate submarine line terminal equipment (SLTE) on U.S. cable landings to be licensees under the Cable Landing License Act. The Order grants a blanket license to current and future SLTE owners/operators that are not otherwise disqualified, effective September 25, 2026 (with some rule sections delayed indefinitely).
Cybersecurity & Physical Security Plans
SLTE owners and operators must create, implement, and update cybersecurity and physical security risk management plans. The FCC estimates a one-time cost of about $9,100 per entity (totaling approximately $28.5 million across an estimated 3,136 SLTE owners/operators). Licensees are not required to certify these plans to the FCC.
Annual Reporting Requirements
SLTE owners/operators must file annual Section 43.82 circuit capacity reports and, if associated with foreign-adversary-controlled SLTEs, must file an SLTE Foreign Adversary Annual Report. The FCC estimates a per-report cost of about $972 for circuit capacity reports and about $4,100 for each Foreign Adversary Annual Report.
Limits on Foreign-Adversary Equipment & Contracts
The Order prohibits licensees from using principal equipment produced by foreign adversary-controlled entities, from using certain third-party service providers tied to foreign adversaries or the Covered List, and from entering IRUs or capacity leases that would let Covered List entities install, own, or manage SLTE. The FCC did not require removal of existing covered equipment.
Fast-Track Exemption for Low-Risk Applications
The FCC created ten national security standards; applications that meet all ten are presumptively exempt from referral to Executive Branch agencies, speeding approval. The FCC estimates this exemption could save about $98,000 annually in avoided referral costs (based on assumptions about referrals and application costs).
Wet-Segment Repair Exemption Preserved
The Order preserves a narrow exemption allowing third-party repair and maintenance on the wet (undersea) segment, including foreign-affiliated specialized repair ships, to address limited availability of repair vessels and avoid repair delays and major cost increases.
Foreign-Adversary/Character Presumptions Require Individual Review
Entities that meet the FCC's foreign adversary or character presumptive disqualifying conditions are excluded from the blanket license and must apply for an individual cable landing license; such entities may continue to operate SLTE they already possess at the rules' effective date to avoid immediate disruption.
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Key Dates
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