The equipment at each end of a subsea cable now needs an FCC licence, and ten security standards can keep an application out of Executive Branch review
The cable is not the only thing that gets licensed now.
The Federal Communications Commission's Second Report and Order on submarine cable landing licences appeared in the Federal Register on Monday, at 91 FR 46844. The order itself is older than its publication. It was adopted on June 25 and released on June 30, as FCC 26-42, in dockets numbered 24-523 and 24-524. Publication is what starts the clock, and the clock says September 25 for most of the rules.
The gap the Commission says it is closing is submarine line terminal equipment, which the order calls SLTE. That is the equipment sitting at each end of a cable system, converting the optical signal that travelled under the ocean into the electrical signal that moves across land. The Commission's reasoning is that whoever owns or operates it can affect the operation of the whole system regardless of whether they hold any interest in the cable, so an entity affiliated with a foreign adversary that owns terminal equipment in the United States presents a risk resembling ownership of the cable itself. The vulnerabilities it names are physical disruption, manipulation of service, overt attack, and interception of unencrypted traffic.
So terminal equipment owners and operators are brought inside the licensing regime, and the mechanism is a blanket licence rather than an application process. Any current or future owner or operator that is not already a cable landing licensee, and does not fall within the exceptions the order sets out, is licensed by the rule. Routine conditions and reporting requirements come with it.
Three prohibitions arrive as certifications and routine conditions. Principal equipment produced by foreign adversary controlled entities may not be used in a submarine cable system, and the order defines production to reach manufacturing, assembly, design and development. Third-party service providers may not be foreign adversary controlled entities, entities on the Commission's Covered List, or entities able to access the cable from a foreign adversary country. And licensees, their customers and downstream customers may not enter indefeasible rights of use or capacity lease arrangements with a Covered List entity where the arrangement would give that entity the ability to install, own or manage terminal equipment at a landing in the United States.
The notification duties are more mundane and probably more frequently triggered. Licensees must tell the Commission about ownership changes and about changes to the Covered List, about a change of address or geographic coordinates, about an intention not to renew, and about the retirement of a cable. The Commission also adopts a rule letting it share filed information with the Committee and other federal agencies on a confidential basis, without the pre-notification that Section 0.442(d) would otherwise require.
Against all of that the order sets a faster route. Ten national security standards are established, and an application that meets them is presumptively exempt from referral to the Executive Branch agencies. Renewals and extensions are excluded from referral where the Commission referred, and those agencies reviewed, an application from the same applicant within the previous three years. The Commission's stated aim is to concentrate Executive Branch attention on the applications that raise significant concerns and to cut the delay on the ones that do not.
One detail matters for anyone diarising this. The effective date of September 25 does not cover the whole order. Sixteen amendatory instructions are delayed indefinitely, among them two touching Section 1.40001 and most of the new sections in the 1.70000 series, and the Commission says it will publish a separate document announcing when those take effect.
