The FCC Proposes New Submarine Cable Systems Rules: Six Key Facts to Know

_{Maury Mechanick (Contract Lawyer, White & Case) contributed to the development of this publication.}

For the first time since 2001, in an unanimous vote, the Federal Communications Commission (the "FCC") is proposing a major overhaul of its submarine cable licensing rules in its recently released Notice of Proposed Rulemaking ("NPRM"). The FCC is seeking comment on how best to improve and streamline the submarine cable rules to facilitate efficient deployment of submarine cables while ensuring the security, resilience, and protection of this critical infrastructure. In this client alert, we offer six key takeaways that submarine cable owners, investors, and operators should know.

1. The FCC seeks to expand and clarify the circumstances in which a submarine landing license must be obtained. The FCC proposes requiring a submarine cable landing license in any instance in which a submarine cable connects: (1) the continental United States with any foreign country; (2) Alaska, Hawaii, or the U.S. territories or possessions with a (i) foreign country, (ii) the continental United States, or (iii) with each other; and (3) points within the continental United States, Alaska, Hawaii, or a territory or possession in which the cable is laid in international waters.
2. The FCC seeks to codify its "public interest standard" and "character qualifications" in which a license applicant must demonstrate how the grant of the application will serve the public interest, convenience, and necessity, and how the applicant has the requisite character qualifications, respectively. The FCC public interest determination would be based on the totality of the circumstances presented by each application, supplemented with additional information as necessary, while the character qualifications assessment would include a review of whether the applicant has, among other potential acts of misconduct, made false statements or misrepresentations to the FCC; been convicted of a felony; violated U.S. antitrust or other competition laws; or has engaged in fraudulent conduct before another government agency.
3. In light of the rapidly evolving national security environment, the FCC proposes to establish several new periodic reporting requirements and adjustments to the current 25-year standard license term. These include implementing a periodic review process of licensees every three years or, alternatively, reducing the 25-year license term to a shorter duration, such as 10 years.
4. The FCC proposes expanding categories of cable landing licensee applicant(s)/licensee(s) subject to its rules to include not only entities that own or control the cable landing station, but also those entities that own or control the Submarine Line Terminal Equipment (SLTE) or equivalent equipment and well as any entity that owns any interest in the cable (with no exception for those entities that owned less than a 5% interest in the cable.) This applicant/licensee expansion would likely include Indefeasible Right of Use (IRU) holders or grantees.
5. The FCC proposes requiring further detailed information regarding the submarine cable system. This additional information may include:
   • the length of the cable by segment and in total, the location of branching units, the location, address, and county or county equivalent of U.S. and non-U.S. cable landing points;
   • the number of optical fiber pairs in the cable and the design capacity of the system; the geographic coordinates of cable landing stations as well as beach manholes, to the extent they differ from cable landing station coordinates;
   • route position lists containing the geographic coordinates of the wet segment of the submarine cable.
6. The FCC proposes new required certifications to safeguard national security, law enforcement, and related concerns. These new proposed certifications include applicants certifying:
   • they are in compliance with the FCC's rules and regulations, the Cable Landing License Act of 1921, and other laws;
   • they created, updated, and implemented cybersecurity risk management plans (in addition to describing their implementation of security controls sufficient to ensure the confidentiality, integrity, and availability of all aspects of their communications systems and services and ensuring the applicant's cybersecurity risk management plan covers the systems and services offered by the third-party contractor);
   • their submarine cable system will not use covered equipment or services identified on the FCC's "Covered List" that the FCC maintains pursuant to the Secure and Trusted Communications Networks Act of 2019.

As stated in the NPRM, these proposed updates are intended to reflect the FCC's efforts to better identify and capture information on those entities that own and control the submarine cable system and connect with terrestrial networks in the United States. Submarine cable operators and other interested parties will be confronted with the need to carefully navigate a new regulatory paradigm once these proposals become effective. Comments on the proposed NPRM will be due 30 days after the NPRM's publication of the NPRM in the Federal Register and Reply Comments will be due 60 days after publication.

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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