*

FCC raising scrutiny of submarine cables that handle 98%

of

world's internet traffic

*

Commission looks to tighten rules barring companies like

Huawei

from involvement

(Adds Chinese embassy comment in paragraph 7)

By David Shepardson

WASHINGTON, Nov 21 (Reuters) - The Federal

Communications Commission voted on Thursday to propose new rules

governing undersea internet cables in the face of growing

security concerns, as part of a review of regulations on the

links that handle nearly all the world's online traffic.

The FCC voted 5-0 on proposed updates to address the

national security concerns over the global network of more than

400 subsea cables that handle more than 98% of international

internet traffic.

"With the expansion of data centers, rise of cloud

computing, and increasing bandwidth demands of new large

language models, these facilities are poised to grow even more

critical," FCC Chair Jessica Rosenworcel said.

Baltic nations said this week they are investigating whether

the cutting of two fiber-optic undersea telecommunication cables

in the Baltic Sea was sabotage.

Rosenworcel noted that in 2023 Taiwan accused two Chinese

vessels of cutting the only two cables that support internet

access on the Matsu Islands and Houthi attacks in the Red Sea

may have been responsible for the cutting of three cables

providing internet service to Europe and Asia.

"While the details of these incidents remain in dispute,

what is clear is that these facilities -- with locations that

are openly published to prevent damage -- are becoming a

target," Rosenworcel said.

The Chinese Embassy in Washington said "turning undersea

cables into a political and security issue severely disrupts

international market rules, threatens global digital

connectivity and cybersecurity, and denies other countries,

especially developing countries, the right to develop their

undersea cable industry."

The FCC is conducting its first major review since 2001 and

proposing to bar foreign companies that have been denied

telecommunications licenses on national security grounds from

obtaining submarine cable landing licenses.

It also proposes to bar the use of equipment or services in

those undersea cable facilities from companies on an FCC list of

companies deemed to pose threats to U.S national security

including Huawei, ZTE (Shenzhen:000063) 601728.SS, China Telecom

and China Mobile.

FCC Commissioner Geoffrey Starks said the commission is

considering whether to bar companies from getting undersea cable

licenses that are on other lists like the Commerce Department's

Consolidated Screening List. "China has made no secret of its

goal to control the market, and therefore the data that flows

throughout the world," Starks said.

Last month, a bipartisan group of eight U.S. senators called

on President Joe Biden to undertake "a review of existing

vulnerabilities to global undersea cable infrastructure,

including the threat of sabotage by Russia and China."

The United States has for years expressed concerns about

China's role in handling network traffic and potential for

espionage.

Since 2020, U.S. regulators have been instrumental in the

cancellation of four cables whose backers had wanted to link the

United States with Hong Kong.

In June, the FCC advanced a proposal to boost the security

of information transmitted across the internet after government

agencies said a Chinese carrier misrouted traffic.