1. The Physical Internet Is Now a Geopolitical Asset
Ninety-five percent of intercontinental internet traffic travels through subsea cables (TeleGeography). More than 570 cables are in service globally as of 2025, and industry forecasts put planned new-cable investment for 2026 through 2029 at $16 billion or more, rising as AI-driven demand accelerates (TeleGeography). These cables are not neutral infrastructure. They are the physical layer of the global internet, and they are now being carved into spheres of influence by export controls and sanctions regimes.
For emerging-market (EM) governments building new cable landing stations, the commercial decision of which supplier to select for manufacturing, maintenance, and upgrade work has become a geostrategic choice with consequences that extend far beyond the telecom ministry. The United States Congress is constructing a legal architecture that treats subsea cable supply chains as an extension of the national security perimeter, and that architecture will determine which cables EM countries can build, with whom, and under what financing terms.
2. The Shield and the Sword: Two Bills, One Architecture
The US legislative architecture for subsea cable control rests on two complementary bills.
H.R. 2503, the Undersea Cable Control Act (119th Congress), introduced March 31, 2025, and passed by the House on September 2, 2025, is the shield. The bill was received in the Senate on September 3, 2025 and referred to the Senate Committee on Banking, Housing, and Urban Affairs, where it remains pending. It directs the executive branch, acting through the Secretary of Commerce (Bureau of Industry and Security) in consultation with the Secretary of State, to develop within 180 days of enactment a strategy to eliminate the availability to foreign adversaries of goods and technologies capable of supporting undersea cables. The bill requires BIS to evaluate export, reexport, and in-country transfer controls under the Export Administration Regulations for cable manufacturing equipment, maintenance vessels, and related technologies. An unclassified report to Congress is required within 180 days of enactment. (Source: H.R. 2503 text, Congress.gov)
S. 3249, the Strategic Subsea Cables Act of 2026, introduced in the Senate by Senator Jeanne Shaheen on November 20, 2025 and referred to the Senate Foreign Relations Committee, is the sword. It was reported out of committee on February 10, 2026 with a substitute amendment and placed on the Senate Legislative Calendar (Calendar No. 327). As of September 2026, the bill remains on the calendar awaiting floor action. It introduces sanctions authority against foreign persons who sabotage or facilitate the sabotage of critical undersea infrastructure, creates an interagency coordination mechanism for subsea cable security, and extends threat information sharing to private cable operators. Most significantly, it authorizes the Treasury Department to prohibit or condition the US correspondent and payable-through accounts of foreign financial institutions involved in such activity, extending the US dollar-clearing perimeter to cable security. (Source: Congress.gov, S. 3249, 119th Congress)
The distinction is clean: H.R. 2503 is the shield, applying export controls to the manufacturing, maintenance, and upgrade technology for subsea cables. The Strategic Subsea Cables Act is the sword, adding sanctions for cable damage, interagency coordination, and threat information sharing with private operators.
A third regulatory layer now intersects with both bills: the Federal Communications Commission (FCC) Submarine Cable Landing License rules. The Commission adopted its first comprehensive update in August 2025 (FCC 25-49), and on June 25, 2026 it adopted a Second Report and Order in Docket 24-523 (FCC 26-42) that licenses submarine line terminal equipment owners and operators for the first time, presumes against applications from foreign adversary-controlled entities, and bars principal equipment produced by foreign adversary-controlled entities in US-licensed cable systems. The rules were published in the Federal Register on July 27, 2026 and take effect September 25, 2026, except for specified provisions; a Second Further Notice of Proposed Rulemaking keeps the record open on removing covered equipment from existing systems. The precise reach of the foreign-adversary designation, and how far it extends to landing stations outside US jurisdiction that carry US-linked traffic, remains an open question EM operators should track.
3. The EM Exposure: A Procurement Choice with Cascading Consequences
The emerging-market exposure is direct and structural. Countries building new cable landings – Kenya, Nigeria, Indonesia, Brazil, Chile, Singapore, the UAE, and dozens more – face a procurement choice that their telecom procurement frameworks were not designed to handle.
Four firms dominate global subsea cable manufacturing: ASN, formerly Alcatel Submarine Networks (France), SubCom (US), NEC (Japan), and HMN Tech (China). TeleGeography estimates their shares of installed systems at roughly 34 percent, 19 percent, 17 percent, and 10 percent respectively. A country that selects HMN Tech for cable manufacturing may find itself, under the emerging US legislative architecture, facing export control restrictions on maintenance equipment, sanctions exposure for any repair work deemed security-relevant, and, critically, exclusion from the dollar-settlement system if a cable incident triggers the sanctions provisions of S. 3249.
The core insight is not that EM governments should avoid one supplier or choose another. The insight is that the procurement framework itself must change. A subsea cable contract is no longer a telecom procurement decision, governed by cost and technical specification. It is a geoeconomic alignment decision, governed by which regulatory and sanctions perimeter the host country is prepared to operate within.
Concrete examples already exist. The PEACE (Pakistan East Africa Connecting Europe) Cable, supplied by HMN Tech, lands in Pakistan (Karachi and Gwadar) and in Kenya (Mombasa), placing both countries landing infrastructure squarely inside the supply chain that the emerging US architecture targets.
4. The Dollar-Settlement Perimeter: Why This Is Financial Statecraft, Not Telecom Regulation
The most analytically significant feature of the emerging subsea cable architecture is the extension of the US dollar-settlement perimeter into physical cable security. S. 3249 empowers Treasury to cut cable saboteurs from the US financial system. This is not a telecom measure. It is a financial statecraft measure.
The dollar-settlement system is the plumbing of international trade and finance. Exclusion from it is a near-fatal sanction for any entity that transacts across borders. By linking cable security to dollar-settlement access, the US Congress is signaling that subsea cable sabotage will be treated as equivalent to sanctions evasion, terrorist financing, and other offenses that trigger the highest tier of US financial coercion.
For EM governments, this creates a structural dependency that extends well beyond the cable procurement decision. A country whose cable infrastructure is supplied by a Chinese manufacturer, maintained by Chinese repair vessels, and integrated into Chinese telecommunications networks operates, under the emerging architecture, within a US sanctions perimeter that can be activated by a single cable incident – whether intentional, negligent, or attributed through interagency threat intelligence. The physical cable becomes a financial liability.
5. Policy Window Analysis: The Pivot Has Moved to Implementation
The policy window for EM engagement changed shape in the second half of 2026. Three dates define the new timeline.
February 10, 2026: S. 3249 reported out of the Senate Foreign Relations Committee with a substitute amendment and placed on the Senate Legislative Calendar (No. 327). As of September 2026 the bill remains on the calendar awaiting floor action; its sanctions and dollar-clearing provisions remain the live reported text, not a hypothetical.
June 25, 2026: The FCC adopted its Second Report and Order in Docket 24-523 (FCC 26-42). This is the first binding regulatory action in the subsea cable control architecture. The order licenses submarine line terminal equipment owners and operators for the first time, presumes against applications from foreign adversary-controlled entities, prohibits principal equipment produced by foreign adversary-controlled entities, restricts third-party service providers and capacity arrangements linked to foreign adversaries, and requires affected existing licensees to file annual foreign adversary reports. The rules were published in the Federal Register on July 27, 2026 and take effect September 25, 2026, except for specified provisions. A companion Second Further Notice of Proposed Rulemaking keeps the record open on requiring existing licensees to remove covered equipment from their systems.
Ongoing: Congress is assembling a two-part architecture: H.R. 2503, the shield, passed the House on September 2, 2025 and has been pending in the Senate Committee on Banking, Housing, and Urban Affairs since September 3, 2025; the Strategic Subsea Cables Act of 2026, the sword, is on the Senate calendar. A House companion, H.R. 8069, was introduced on March 24, 2026 and remains in committee. Lawmakers also offered the Act’s language as amendments to the fiscal year 2027 National Defense Authorization Act in June and July 2026 (Congressional Record, June 23 and July 13, 2026); both amendments were ordered to lie on the table and neither was adopted, and the Senate rejected cloture on the motion to proceed to that bill on July 14, 2026.
For EM telecom ministers, the window is no longer about shaping a scheduled vote; it is about compliance sequencing. The FCC rule takes effect September 25, 2026. Licensees and terminal-equipment operators must map equipment provenance, service-provider relationships, and capacity arrangements now. Once the congressional reconciliation is complete, EM governments will be reacting to a settled US framework rather than shaping one. The time to seek clarification on extraterritorial scope and to negotiate transition periods for existing infrastructure is now.
6. What EM Telecom Ministers Should Do
Five concrete actions for EM telecom ministers, development finance institution (DFI) digital infrastructure teams, and embassy economic sections.
1. Audit cable landing station supplier exposure. Map every subsea cable landing in your jurisdiction. Identify the manufacturer, the maintenance vessel operator, the upgrade contractor, and their jurisdictions of incorporation. If HMN Tech or other Chinese entities appear in the supply chain, model the sanctions and export control exposure under both H.R. 2503 and S. 3249.
2. Brief finance ministries on dollar-settlement risk. The telecom minister cannot manage dollar-settlement exposure alone. The finance ministry and central bank must understand that a cable incident could trigger Treasury designation, affecting not just the telecom operator but the host country’s broader access to correspondent banking and dollar clearing.
3. Engage the Senate Foreign Relations Committee now. Request clarification on the extraterritorial scope of S. 3249’s sanctions provisions. Does a cable incident in EM waters with no US-flagged vessel involvement trigger sanctions if the cable carries US-origin internet traffic? The ambiguity is the policy risk.
4. Diversify maintenance and upgrade contracts. Even if a cable was manufactured by a firm now in the sanctions crosshairs, maintenance and upgrade services can be sourced from non-sanctioned providers. Telecom regulators should require cable operators to maintain diversified maintenance pathways as a condition of landing license renewal.
5. Treat subsea cable policy as financial statecraft, not telecom regulation. The institutional location of subsea cable governance must shift. In most EM governments, subsea cables are managed by the telecom ministry, with limited finance ministry or national security council engagement. That structure is outdated. The US Congress has folded cables into the dollar-settlement perimeter. EM governments must mirror that institutional realignment.
Related Juncture analysis
- Undersea Cable Sabotage (Glossary): https://juncturepolicy.org/glossary/terms-u/undersea-cable-sabotage/
- Undersea Data Cable (Glossary): https://juncturepolicy.org/glossary/terms-u/undersea-data-cable/