Facebook Drops Plan to Run Fiber Cable to Hong Kong Amid U.S. Pressure

A Facebook Inc. FB -0.32% consortium withdrew its bid to build a new internet conduit between California and Hong Kong after months of pressure from U.S. national-security officials, the latest sign of a deepening rift between the two governments.

The social-media giant told the U.S. Federal Communications Commission in a filing it would withdraw its application to land the Hong Kong-Americas project, known by its abbreviation HKA, pending a new request for “a possibly-reconfigured submarine cable system.”

Facebook and several telecommunications-industry partners first filed for permission to build the fiber-optic cable in 2018. It would have connected two sites in California with branches to Hong Kong and Taiwan.

“Due to ongoing concerns from the U.S. government about direct communications links between the United States and Hong Kong, we have decided to withdraw our FCC application,” a Facebook spokeswoman said in a statement. “We look forward to working with all the parties to reconfigure the system to meet the concerns of the U.S. government.”

It is the latest cross-Pacific fiber project to stall due to U.S. resistance. A separate Pacific Light Cable Network funded by Facebook and Google owner Alphabet Inc. is also on hold as its builders seek permission to activate the data links that don’t touch Chinese territory.

Facebook and Amazon.com Inc. last year also withdrew their application to build the Bay-to-Bay Express system, a planned network linking Singapore, Malaysia, Hong Kong and the U.S.

Underwater fiber-optic cables carry most of the world’s international internet traffic. Facebook and Google have footed a large share of the bills for construction of new lines to meet the surging demand for bandwidth created by their own data centers. The new links across the Pacific give the companies greater bandwidth to a major internet hub with links to growing Asia markets.

Regulators in Washington routinely grant licenses to cable projects that land in the U.S. after sometimes lengthy reviews. But national security officials took a closer look at some applications after the web companies started planning more physical links to China. Beijing’s crackdown on protests in Hong Kong in 2019 deepened those officials’ concerns that the special administrative region’s legal autonomy could be at risk.

Companies including Facebook, Google and Twitter Inc. in July said they were suspending processing requests for user data from Hong Kong law-enforcement agencies following China’s imposition of a national-security law on the city.

The law includes a provision mandating local authorities to take measures to supervise and regulate the city’s previously unfettered internet, putting U.S. tech titans on a potential collision course with Beijing.

“We believe freedom of expression is a fundamental human right and support the right of people to express themselves without fear for their safety or other repercussions,” a Facebook spokeswoman said in a statement at the time.

People in Hong Kong long used social-media platforms to express political opinions and show support for protests against China’s growing influence in the city, and the services operated freely without restrictions from China’s firewall, which applies to mainland users.

U.S. tech companies operating in the city now face a delicate balancing act, according to analysts. If authorities ask them to remove user accounts or their content, the companies could alienate their user bases in Hong Kong and abroad. But if they refuse, they may face criminal action and punishment.

Still, while there are likely millions of combined users of the companies’ apps and social-media platforms in Hong Kong, the city is insignificant for their revenue on a global scale, analysts say.

U.S. companies’ submarine cable proposals have also faced scrutiny for including Chinese partners. FCC officials have threatened to revoke China-based telecom companies’ licenses to operate in the U.S., part of a broader effort to root out operators with perceived ties to Beijing from American networks.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Newley Purnell at newley.purnell@wsj.com

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