US officials are seeking to block an undersea cable backed by Google, Facebook and a Chinese partner in a national-security review, people involved in the discussions told the Wall Street Journal. The Justice Department, which leads a multiagency panel that reviews telecommunications matters, has signaled opposition to the project because of concerns over its Chinese investor, Beijing-based Dr. Peng Telecom & Media Group Co, and the direct link to Hong Kong the cable would provide, the report said.
Ships have already draped most of the 8,000-mile Pacific Light Cable Network across the seabed between the Chinese territory and Los Angeles. The work so far has been conducted under a temporary permit expiring in September. However, people familiar with the review say it is in danger of failing to win the necessary licence to conduct business because of the objections coming from the panel, known as Team Telecom.
Team Telecom has approved past cable projects, including ones directly linking the US to mainland China or involving state-owned Chinese telecom operators, once they were satisfied the company responsible for its US beachhead had taken steps to prevent foreign governments from blocking or tapping traffic. This would be the first time it denied an undersea cable licence based on national-security grounds, and it could signal regulators are adopting a new, tougher stance on China projects.
The Pacific Light project costs at least USD 300 million to build based on its route, according to consultants who advise companies on subsea cable construction. Google and Facebook have spent the past decade funding similar cables to handle ever-growing network traffic between the US and Asia. The new link to Hong Kong would give them greater bandwidth to a major regional internet hub with links to growing markets in the Philippines, Malaysia and Indonesia as well as mainland China.
Team Telecom’s concerns over Pacific Light include Dr. Peng’s Chinese-government ties and the declining autonomy of Hong Kong. Dr. Peng is China’s fourth-biggest telecom operator. It acquired a stake in the project from the original Chinese real estate investor who developed the project with Google and Facebook in 2016.
Though the FCC makes the final decision on whether to grant a licence for the Pacific Light project, it has historically deferred to recommendations from Team Telecom after its members coalesce around a unified view, the WSJ said. The FCC declined to comment on the report.
A Google spokeswoman said the company has "been working through established channels for many years in order to obtain US cable landing licenses for various undersea cables. We are currently engaged in active and productive conversations with US government agencies about satisfying their requirements specifically for the PLCN cable." A Facebook spokeswoman declined to comment.
