Justice Department Opposes Google's Undersea Cable From China

Chris Strohm and Todd Shields (Bloomberg) -- The Justice Department is opposing a bid by Google, Facebook Inc. and a Chinese entity to complete an undersea internet cable between the U.S. and Hong Kong, raising national security concerns for the project that runs out of temporary authority next month.

The high capacity fiber-optic cable running about 8,000 miles (13,000 kilometers) is intended to connect U.S. internet users to Asia and increase competition on the trans-Pacific data route, according to filings at the Federal Communications Commission, where the companies in 2017 applied for permission to land the cable in the U.S.

The project remains pending as tensions simmer between the U.S. and China, with an ongoing trade dispute featuring tariffs on billions of dollars in goods and chaotic pro-democracy protests in Hong Kong.

The Justice Department and Defense Department in 2017 asked the FCC to defer action on the project until a national security review could be completed, according to two people familiar with the project who spoke on the condition of anonymity. That review continues with no specific date for conclusion.

The Justice Department declined to comment on specifics of the case. The FCC usually follows recommendations that emerge from the inter-agency review process, but isn’t bound to do so. FCC Spokesman Neil Grace declined to comment.

Related:Facebook Invests in US-Hong Kong Submarine Cable

The Justice Department has signaled opposition because of concerns over its Chinese investor, Beijing-based Dr. Peng Telecom & Media Group Co., the Wall Street Journal reported, citing people involved in the discussions.

Dr. Peng provides communications services in China. Partners listed on its website include Huawei Technologies Co., a telecommunications gear maker accused by U.S. authorities of being a potential security risk. Huawei has denied such allegations.

Google filed for permission to bring the cable to the U.S. in April 2017, and has since twice won special temporary authority for construction and testing from the FCC. That expires Sept. 30, according to commission records. Without that authority, work would need to stop.

In an April 3 application for the temporary authority, Google said that not winning permission for testing and construction would “impose significant economic costs on the applicants. Depending on the length of the delay, the financial viability of the project could be at risk.”

A spokeswoman for Google declined to comment.

Google, Facebook, Hong Kong-based Pacific Light Data Communication Co. and underseas cable provider SubCom announced the cable in 2016, calling it the first subsea cable directly connecting Hong Kong and the U.S. Commercial operations were to begin in 2018, the companies said. In November 2018 Cerberus Capital Management announced it had acquired SubCom from TE Connectivity Ltd.

Related:Google’s New Switching Tech Makes Its Latest Subsea Cable Cheaper, Simpler

The cable is to link California, Hong Kong, Taiwan and the Philippines, connecting the builders’ data centers and carrying wholesale data, according to filings at the FCC.

--With assistance from Gerrit De Vynck.