On June 25, 2026, the Federal Communications Commission voted to tighten oversight of the submarine cables that carry roughly 99% of the world’s international internet traffic, adding new licensing and security obligations for companies that handle landing equipment. The move zeroes in on operators of submarine line terminal equipment, putting owners and operators under formal cable-landing license obligations, stricter reporting and cyber-physical security requirements, and limits on equipment or services tied to foreign adversaries. Officials are pitching the package as a way to accelerate secure capacity for cloud and AI infrastructure while cutting suppliers linked to hostile states out of the most sensitive parts of the network.
According to Reuters, commissioners said the revamped rules are expected to make it more difficult for Chinese companies to furnish key undersea components while creating a fast-track approval process for trusted U.S. technology firms. Reuters also reported that the streamlined process could let major cloud and internet players win quicker permission to operate or expand undersea capacity, potentially reshaping how consortium deals are structured and how repairs are arranged. Industry sources told Reuters the changes may nudge sponsors to simplify ownership and leasing structures so they can qualify for expedited review.
The FCC has repeatedly described submarine systems as strategic infrastructure, stressing in its own materials that these networks carry roughly 99% of international internet traffic. In the same release, the agency said the order includes cybersecurity and physical-security requirements, annual reporting obligations and a presumption of denial for applicants tied to foreign adversaries. The FCC also outlined a possible exemption process for “recurring applicants” that satisfy a high-level set of national-security standards, a mechanism intended to shorten Team Telecom reviews for players that frequently seek approvals.
What Operators Will Have To Do Now
Under the draft Second Report and Order circulated ahead of the FCC's June 25 meeting, entities that own or operate submarine line terminal equipment would generally need to be cable-landing licensees and comply with routine conditions, including providing network maps, incident reporting and cybersecurity plans, according to Davis Wright Tremaine. The proposal would also tighten restrictions on indefeasible rights of use and certain capacity leases that could let an entity linked to a foreign adversary install or control terminal gear. At the same time, it would give the FCC authority to issue blanket licenses to many SLTE operators while excluding those that hit presumptive disqualifiers. In practice, that likely means existing consortium contracts and downstream leasing arrangements will need legal and commercial rework to stay compliant.
Why Big Tech Could Gain Ground
As Reuters noted, U.S. cloud and internet companies that already fund or operate undersea cables, including Alphabet's Google and Meta, could benefit if they meet the security standards needed for faster approvals. The streamlined pathway is aimed at repeat applicants with stable ownership and strong governance, cutting down on delays tied to Team Telecom referrals. For firms racing to add capacity for AI workloads and large-scale cloud services, shaving months off the approval timeline could be commercially significant.
Pushback And Geopolitics
Legal and industry observers caution that the rules could inject more geopolitics into a sector that has traditionally depended on multinational consortia and international vendors, and could provoke diplomatic pushback from countries that feel targeted. Greenberg Traurig and other analysts point out that new disclosure thresholds and the use of a “Covered List” of flagged entities may chill foreign investment and complicate multi-party builds. Firms and governments that have carved out operational and repair roles in cable markets may lobby to preserve commercial flexibility or press for narrow waivers.
Legal And Regulatory Implications
The reforms build on the Cable Landing License Act and existing Team Telecom review processes and would require new attestations and ownership disclosures, including 5% and 10% thresholds for reporting, as set out in the Federal Register. The rules also allow the FCC to share confidential filings with the Committee for the Assessment of Foreign Participation in the U.S. Telecommunications Services Sector and other agencies, further elevating national-security reviewers in the licensing process. Observers expect legal challenges, waiver bids and contract renegotiations as stakeholders probe how aggressively the agency will apply the presumptive disqualifications.
Next up: applicants will be filing compliance certifications and updated ownership disclosures, and the FCC's use of exemptions or referrals will reveal whether the new regime truly speeds approvals or simply adds another layer of national-security review. The agency insists the package will both protect critical links and accelerate buildout; how that balance plays out will determine whether the rules spur U.S. investment without splintering the undersea market.
