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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 about a project that runs out of temporary authority next month.

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

The project is pending as tensions simmer between the U.S. and China, with an ongoing trade dispute featuring tariffs on billions of dollars in goods, and as pro-democracy demonstrations roil 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 interagency review process, but it isn't bound to do so. FCC spokesman Neil Grace declined to comment.

The Justice Department has signaled opposition because of concerns over the project's 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 in April 2017 for permission to bring the cable to the U.S., and it has twice won special temporary authority for construction and testing from the FCC. That authority 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 receiving 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 undersea-cable provider SubCom announced the cable in 2016, calling it the first undersea 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.

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.

Information for this article was contributed by Gerrit De Vynck of Bloomberg News.

Business on 08/29/2019

Print Headline: Hurdles loom for undersea cable bid

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