U.S. officials are seeking to block an undersea cable project named “Pacific Light Cable Network,” that has as its investors Google, Facebook, and a Chinese partner, over national security concerns, the Wall Street Journal (WSJ) reported on Wednesday.
The project has come under scrutiny of the Justice Department, because of concern over its Chinese investor, Beijing-based Dr. Peng Telecom & Media Group Co., and the direct link to Hong Kong the cable would provide.
In 2016, Google owner Alphabet Inc. collaborated with Facebook to provide its U.S. financing, along with a new Hong Kong company called Pacific Light Data Communication Co. which is controlled by a mainland Chinese real-estate magnate.
The Chinese partner later sold its majority stake in the project to Dr. Peng, a Beijing-based tech giant serving more than “210 cities across China and North America,” as its website says.
In 2014, Dr. Peng teamed up with Huawei to jointly research cloud computing, artificial intelligence, and 5G mobile technology, reported the WSJ, citing an exchange filing.
Huawei, a target of U.S. officials as well as some from allied countries, was blacklisted by the U.S. Department of Commerce over national security concerns, following an executive order from President Donald Trump that effectively banned Huawei from U.S. communications networks.
Earlier this month, the Trump administration issued rules for a ban on federal purchases of telecommunications and video surveillance equipment and services from five Chinese companies, including Huawei and ZTE.
“Huawei is a Chinese state-directed telecom company with a singular goal: undermine foreign competition by stealing trade secrets and intellectual property, and through artificially low prices backed by the Chinese government,” said Sen. Marco Rubio (R-Fla.)
“The Communist Chinese government poses the greatest, long-term threat to America’s national and economic security, and the U.S. must be vigilant in preventing Chinese state-directed telecom companies, like Huawei and ZTE, from undermining and endangering America’s 5G networks,” he added.
The Pacific Light project, which cost at least $300 million, would give companies Google and Facebook greater bandwidth to a major regional internet hub and open a wide path to growing Asia markets.