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Iran demands Big Tech pay fees for undersea Internet cables in Strait of Hormuz

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Why This Matters

Iran's recent move to demand fees from US tech companies for undersea Internet cables in the Strait of Hormuz could disrupt global connectivity and accelerate efforts to find alternative routes. This geopolitical development highlights the fragility of international digital infrastructure and the potential for regional conflicts to impact global internet traffic. It underscores the importance for tech companies and governments to diversify and secure their undersea cable networks.

Key Takeaways

Iran claims it will charge US tech companies fees for using undersea Internet cables that run beneath the contested Strait of Hormuz shipping lanes. The war has already halted multiple projects and led to the suspension of cable repairs in the region—and the latest Iranian threats may accelerate efforts by Big Tech and Gulf countries to find alternative routes for bypassing the Strait of Hormuz’s digital chokepoint.

The latest assertions of Iranian authority over the Strait of Hormuz were announced in a brief statement by Ebrahim Zolfaghari, a spokesperson for Iran’s military and the Islamic Revolutionary Guard Corps. “We will impose fees on internet cables” Zolfaghari wrote in a May 9 post. It was not immediately clear how Iran might implement such fees or impose its rules on cable projects, given that the majority of routes pass through Oman-controlled waters.

But Tasnim and Fars, both Iranian state-linked media channels, laid out more detailed proposals on how Iran could charge license fees to US tech giants for the use and maintenance of undersea cables carrying regional Internet traffic, according to The Guardian. For example, the Tasnim plan described charging tech companies—specifically naming Meta, Google, Amazon, and Microsoft—license fees for cable usage while also claiming that Iran alone has the right to repair and maintain the subsea cables.

More than 99 percent of international Internet traffic runs through the global network of undersea cables that crisscross various oceans, connecting continents and islands. The major active cables running through the Strait of Hormuz primarily serve the Gulf countries in the region. They include the Asia Africa Europe-1, FALCON, and the Gulf Bridge International Cable System, according to TeleGeography, a telecommunications research organization.

The FALCON and Gulf Bridge cables run through Iranian territorial waters at certain points, Alan Mauldin, a research director for TeleGeography, said in a CNN interview. CNN also reported that Iranian state media outlets have “issued veiled threats warning of damage to cables.”