Key Takeaways
- • The FCC adopted on June 25, 2026, a new licensing regime for Submarine Line Terminal Equipment (SLTE) owners and operators, establishing blanket licenses subject to national security exclusions and significantly expanding FCC oversight of critical internet infrastructure.
- • Entities excluded from the blanket license include those owned or controlled by foreign adversaries, entities on the FCC's Covered List, and those with prior violations of the Cable Landing License Act or national security-related communications violations within the past 20 years.
- • Eight new routine conditions apply to SLTE blanket licensees within 60 days of Federal Register publication, including mandatory cybersecurity and physical security risk management plans, annual Foreign Adversary Annual Reports, and annual circuit capacity reporting.
- • New national security certification requirements prohibit licensees from using principal equipment produced by foreign adversary-controlled entities, engaging foreign adversary-controlled third-party service providers, and entering into indefeasible rights of use (IRU) or capacity leasing arrangements with Covered List entities.
- • The FCC created a presumptive exemption process for Team Telecom referral for applicants meeting ten national security standards, streamlining approvals for trusted operators while subjecting all licensees to enhanced monitoring, incident reporting within 72 hours, and ongoing compliance inspections.
Summary
The Federal Communications Commission adopted a comprehensive Second Report and Order on June 25, 2026, establishing the first regulatory licensing regime for Submarine Line Terminal Equipment (SLTE) operators—a critical gap in oversight of internet infrastructure. SLTE converts optical signals carried on submarine cables into electrical signals and vice versa, serving as a vital connection point between subsea and terrestrial networks. The FCC's modernized approach, building on a 2025 First Report and Order addressing submarine cable licensing, closes a loophole that previously allowed some entities to operate submarine cables while avoiding licensing, regulatory review, and monitoring requirements.
The new regime grants a blanket license by rule to all SLTE owners and operators, subject to specified exclusions. Entities are disqualified if they have committed offenses related to violations of the Cable Landing License Act, fraudulent conduct, or national security violations within the past 20 years; if they are owned, controlled by, or subject to the jurisdiction or direction of a foreign adversary; or if they are on the FCC's Covered List. These disqualifications apply to new SLTE ownership or operation but apply prospectively, extending to current and future affiliates and subsidiaries.
Eight routine conditions become effective 60 days after Federal Register publication. SLTE licensees must comply with FCC rules and communications-related treaties, implement cybersecurity and physical security risk management plans, file annual Foreign Adversary Annual Reports if they meet any of five specified criteria, and submit annual circuit capacity reports. The Foreign Adversary Annual Report requirement applies to entities owned or controlled by foreign adversaries, those on the Covered List, those utilizing equipment or services from the Covered List, those with denied or revoked authorizations on national security grounds, and those operating in or with SLTE from foreign adversary countries.
Existing submarine cable licensees face new national security certification obligations. All licensees must certify they do not use principal equipment produced by foreign adversary-controlled entities and will not add such equipment to their systems. They must prohibit third-party service providers that are foreign adversary-controlled or able to access cables from foreign adversary countries, with narrow exemptions for critical wet-segment repairs. Licensees must certify they will not enter into IRU or capacity leasing arrangements with Covered List entities and must report any foreign adversary ownership changes within 30 days. Existing licensees must also acknowledge updates to the Department of Commerce's foreign adversary list and additions to the FCC's Covered List within 60 days, with attestations regarding use of such equipment or services.
The Second Report and Order creates an expedited approval pathway for trusted applicants. Those meeting ten national security standards—including licenses granted after November 27, 2020, with compliance agreements or renewals within five years; zero 10% or greater foreign interest holders; prohibition of foreign adversary influence among senior officials; enhanced cybersecurity and physical security standards; and ongoing Commission and Team Telecom inspection rights—qualify for presumptive exemption from Team Telecom review. Team Telecom retains a 30-day objection period. The Commission has signaled continued rulemaking activity, adopting a Further Notice of Proposed Rulemaking to solicit comment on additional oversight mechanisms, with implementation timelines contingent on Office of Management and Budget approval of information collection requirements.
The new regime grants a blanket license by rule to all SLTE owners and operators, subject to specified exclusions. Entities are disqualified if they have committed offenses related to violations of the Cable Landing License Act, fraudulent conduct, or national security violations within the past 20 years; if they are owned, controlled by, or subject to the jurisdiction or direction of a foreign adversary; or if they are on the FCC's Covered List. These disqualifications apply to new SLTE ownership or operation but apply prospectively, extending to current and future affiliates and subsidiaries.
Eight routine conditions become effective 60 days after Federal Register publication. SLTE licensees must comply with FCC rules and communications-related treaties, implement cybersecurity and physical security risk management plans, file annual Foreign Adversary Annual Reports if they meet any of five specified criteria, and submit annual circuit capacity reports. The Foreign Adversary Annual Report requirement applies to entities owned or controlled by foreign adversaries, those on the Covered List, those utilizing equipment or services from the Covered List, those with denied or revoked authorizations on national security grounds, and those operating in or with SLTE from foreign adversary countries.
Existing submarine cable licensees face new national security certification obligations. All licensees must certify they do not use principal equipment produced by foreign adversary-controlled entities and will not add such equipment to their systems. They must prohibit third-party service providers that are foreign adversary-controlled or able to access cables from foreign adversary countries, with narrow exemptions for critical wet-segment repairs. Licensees must certify they will not enter into IRU or capacity leasing arrangements with Covered List entities and must report any foreign adversary ownership changes within 30 days. Existing licensees must also acknowledge updates to the Department of Commerce's foreign adversary list and additions to the FCC's Covered List within 60 days, with attestations regarding use of such equipment or services.
The Second Report and Order creates an expedited approval pathway for trusted applicants. Those meeting ten national security standards—including licenses granted after November 27, 2020, with compliance agreements or renewals within five years; zero 10% or greater foreign interest holders; prohibition of foreign adversary influence among senior officials; enhanced cybersecurity and physical security standards; and ongoing Commission and Team Telecom inspection rights—qualify for presumptive exemption from Team Telecom review. Team Telecom retains a 30-day objection period. The Commission has signaled continued rulemaking activity, adopting a Further Notice of Proposed Rulemaking to solicit comment on additional oversight mechanisms, with implementation timelines contingent on Office of Management and Budget approval of information collection requirements.
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