Overview
Out-of-sight, but not out-of-mind, subsea cables are in the policy spotlight in Washington. Subsea fiber-optic cables, also called submarine cables, carry more than 95% of intercontinental data traffic through a network of around 600 submarine cables. They are considered global critical infrastructure as they serve as the telecommunication backbone on which governments, businesses, and the public rely. Their criticality is growing as these high-bandwidth connectors support cloud computing, Internet of Things (IoT), and integrated 5G networks, and data needed to feed large language models. Data centers are expected to fuel the expansion of subsea cable capacity, as there is no real alternative technology to meet the demand. They are more efficient and reliable than satellites.
Despite lying on the ocean floor, subsea cables are vulnerable to disruption and tampering. Historically, most disruptions are caused by maritime accidents, such as anchor dragging, or natural disasters, like earthquakes. However, great power competition has recently led to a spike in gray zone operations targeting submarine cables, such as suspected Russian and Chinese-directed operations in the Baltic Sea and around Taiwan. Washington is also concerned that adversaries are targeting subsea cables for intelligence collection and covert operations designed to tamper with information integrity.
While these vulnerabilities are not new, Washington is increasingly focused on the need to safeguard this critical infrastructure, in the US and globally. For US businesses and trusted partners, new policies compelled by national security will create opportunities and incentives for investment in the subsea cable sector, along with added regulatory requirements.
FCC Approves New Rules to Secure Undersea Cables
On August 7, the Federal Communications Commission (FCC) voted to adopt a new rules package that includes a range of measures to protect submarine cables against foreign adversaries. The Report and Order portion applies a presumption of denial for certain foreign adversary-controlled license applicants, limits capacity leasing agreements to such entities, prohibits the use of “covered” equipment, and establishes cybersecurity and physical security requirements.
The new rules will essentially ban Chinese and Russian companies with ownership interests in subsea cable projects from receiving FCC licenses.
The FCC defines “foreign adversary” to include China, Cuba, Iran, North Korea, Russia, and Nicolás Maduro’s regime in Venezuela. “Covered” equipment is the list of equipment and services covered by Section 2 of the Secure Networks Act that are deemed to pose an unacceptable risk to US national security or the security and safety of US persons.
A cable landing license must be obtained prior to landing a submarine cable to connect:
- the continental United States with any foreign country;
- Alaska, Hawaii, or the U.S. territories or possessions with a foreign country, the continental United States, or with each other; and
- points within the continental United States, Alaska, Hawaii, or a territory or possession in which the cable is laid within international waters.
As of July 2025, there are 90 FCC-licensed submarine cable systems (either operating or planning to enter service).
Additional proposed rulemaking seeks comment on a proposal to exempt low-risk applications from review by Team Telecom if the proposed project meets specific national security and ownership standards, including cybersecurity and physical security compliance.
Team Telecom (Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector) is an interagency committee that reviews certain FCC applications and licenses for national-security and law-enforcement risks. Based on its assessment, Team Telecom may advise the FCC that (1) granting the application or license does not raise national-security or law-enforcement risks; (2) the application or license should be granted subject to conditions to mitigate any identified national-security or law-enforcement risk; or (3) the application or license should be denied, revoked, or terminated. These CFIUS-type reviews can be burdensome in terms of time and costs needed to respond to inter-agency regulators’ questions.
Congressional Investigation into Subsea Cable Vulnerabilities to Chinese and Russian Espionage
While the FCC is focused on securing subsea cables that touch US territory, Congress is considering risks to submarine cables further afield.
Last month House Homeland Security Subcommittee on Transportation and Maritime Security Chairman Carlos Gimenez (R-FL), Select Committee on the Chinese Communist Party Chairman John Moolenaar (R-MI), and House Foreign Affairs Subcommittee on Europe Chairman Keith Self (R-TX) sent letters to major US technology companies seeking information on whether the subsea cable systems that they have direct or indirect operational involvement or ownership of are affiliated with China or Russia.
The request for information is part of the committees’ investigation into the risks to US national security by foreign countries of concern that are positioned to compromise subsea cable systems. The lawmakers asked for responses no later than August 4 on whether they are aware of any instances of suspected hardware tampering, optical signal tapping, unexpected signal distortion, or other operational irregularities during any cable repair or maintenance event.
Securitizing the Subsea Cable Supply Chain
Cable systems are traditionally owned by telecom carriers and technology companies who either form a consortium of all parties interested in using the cable or are independently owned. With Washington seeking to securitize the entire supply chain, clarifying ownership by foreign entities is only part of the risk assessment.
There are only four major companies with vertically integrated capabilities, from manufacturing the fiber-optic cables to laying them on the ocean’s surface with specially designed vessels and repairing them as needed: America’s SubCom, Japan’s NEC Corporation, France’s Alcatel Submarine Networks, and China’s HMN Tech. The list of companies that solely manufacture submarine optical fiber cables is slightly longer but is dominated by non-US companies, as are companies operating the global fleet of around 65 vessels designed to lay cables.
While the FCC is increasingly focused on identifying ownership and building a trusted materials supply chain, other parts of the government are focused on the service side of the supply chain. Japan and France are US trusted partners, but some Department of Defense projects must be serviced by US companies for national security reasons.
Washington has limited options. Reportedly, SubCom operates six cable-laying vessels. The US Navy has only one, the 40-year-old USNS Zeus, which is nearing the end of its operational life. President Trump established the Cables Security Fleet (CSF) in 2019 to secure a domestic capability to repair and maintain submarine cables. It was implemented in 2021, awarding a contract to SubCom for two US-flagged and crewed capable ships, the CS Dependable and CS Decisive (presumably counted in the six-vessel fleet of SubCom). However, the program was defunded by the Biden administration in 2024, cutting off the $5 million annual stipend for the ships if they met their contracted and statutory requirements. The project’s future is uncertain.
Separately, there is a new legislative effort in Congress to authorize the procurement of two new submarine cable-laying and repair ships. Introduced in July, the Naval Enhancement for Protection of Telecommunications Undersea Network Equipment (NEPTUNE) Act gives the Navy the authority to prohibit the decommissioning of USNS Zeus until a modern replacement is procured and operational. It is currently sitting in committee, with future action also unclear at this time.
Efforts to remove the role of foreign entities from subsea cable infrastructure will increase the security of American data infrastructure, but without an autonomous capability to maintain these cables, the US risks creating a new bottleneck. Nonetheless, upside risks will be created for domestic cable manufacturing and laying firms, who will be called upon to meet new US demand.
