The Atlantean Protectorate was essentially an artificial archipelago established to deal with the over-population of Earth in the 21st Century. By the turn of the 22nd Century, it was famed as a libertine and politically neutral free port.
By the early 21st Century, Earth's over-population and shifting climate conditions was a growing concern. With ever growing numbers of people being shunted into high density urban centres, the creation and use of largely self-contained megastructures called arcologies as dumping grounds for immigrants and socioeconomic migrants soon became inevitable. In a number of cases, such communities were viable only due to the establishment of the T-Mat network with its ability to move vast quantities of consumables in short order. When T-Mat was almost fatally compromised by alien invaders, an event that exposed the world to chaos and privation, nations began guarding their borders far more closely. They also saw what had once been the safety of monolithic authority as a new threat to national (and global) security and demanded more autonomous regional control over T-Mat. Once that happened, the threat of neighbouring countries invading via beam-in became real and transmat-jamming technology came into play as a counter measure that itself soon became weaponised and the world once again slowly began Balkanising.
At the same time, humanty began to return to space in earnest as it continued to multiply, spurred on by the lingering environmental effects of the recent Martian invasion. Unsurprisingly, such efforts were as divided and riven by competing ideologies as every other major human endeavour of the period but they none the less manage to get a 3-person exploration team to Mars (likely using reverse engineered Ice Warrior tech, given the parlous state of human manned space flight) that found no overt sign of the would-be genocidal invaders. Due to the expense involved however, manned transatmospheric efforts were limited primarily to orbital stations located at Earth's La Grange points and a number of bases on the moon. The T-Mat Corporation finally collapses during this period, and in 2050 its moonbase is taken over by the Gravitron, a gravitic weather manipulator device of such extraordinary power it is only permitted to exist outside high Earth orbit under the oversight of a massively international body. As a result of the Gravitron's success in combating extreme weather conditions, the decision is made to colonise the oceans of the world in earnest, building on the engineering and technological groundwork provided by the megastructures moored off the coast of places such as Dubai to create floating city-sized arcologies.
Although a costly undertaking, the building of these new cities was backed both by transnational corporations looking for less stringent oversight and nations eager to offload an ever expanding populance, especially those they considered undesireable; those who moved to these settlements voluntarily were referred to as "Sea Changers".
The destruction of Bowie Base during this time was assumed by some in power to be an act of intentional sabotage by competing national interests, but the story told by the two survivors and the lack of any evidence to the contrary are enough to stall any outright hostilities. The incident however was enough to curtail human attempts to settle the planet until 2095 and served only to focus attention on the floating cities. Though the money and will eventually ran out towards the end of the 2060s — one of the more infamous cases being the failed settlement of the Ionian Sea — a number of these floating cities were completed. They were then typically placed inside territorial ocean waters or in some cases positioned essentially as frontier forts along shipping lanes in an attempt to provide vessels with protection against piracy and environmental hazards.
As a result of the global socioeconomic upheaval following the conflict with the Myloki and yet another lunar invasion only a couple of years later by the Cybermen in which the Gravitron is used as a weapon, countless skirmishes and brush wars begin to break out across the planet, leading to a set of political alliances that becomes known by historians of later eras as the Second Global Cold War. Some off-world colonies — mostly those established by transnational corporations, such as Cupid — begin declaring political independence and establish themselves as Neutral free ports. Inspired by this but aware that they don't have the gulf of space to protect them from retribution, a number of floating cities located in the Atlantic begin covert discussions to do likewise but their efforts are interrupted by the advent of the Thousand Day War, as the pretext of global security permits their masters to secure their grip over the various colonies.
Ironically, it was the return of the Myloki in 2096 and the global chaos they cause that finally provided the opportunity the Atlantic cities had been looking for. Seizing their chance, they named themselves the Atlantean Protectorate and declare themselves a freeport open for business. With their infrastructure largely intact and offworld corporate support backing them, and more immediate concerns occupying their mainland founders, the Protectorate is left largely alone. By the time order is restored the following year, their position is unassailable.