Iran Wants to Charge Tech Companies for Undersea Cable Use

The Iranian government is attempting to double-dip by charging the likes of Google and Apple for using underseas cables.

If there is one thing you can say about the whole situation with the Strait of Hormuz, it’s that this is the latest Donald Trump clusterfuck that is absolutely sucking the life out of America. How else can you really accurately describe the situation? The strait was open before the war and now that the war is on, the strait is closed. This sent economic shockwaves around the world and spikes in the oil prices with the highest price spike reaching over $120 a barrel at one point. Understandably, critics are often responding to this whole own goal by saying, “wow, that’s a really big distraction from the Epstein files!”

Either way, this war that closed the strait was completely unnecessary. What’s more, it exposed in pretty plain detail why western nations dependency on oil is a massive unaddressed national security issue. China continues to eat Americas lunch as they make massive investments in renewable energy projects and electric vehicles while both the US and Canada remain completely flat-footed in the race for national self-sufficiency. For the US in particular, they are basically throwing their whole economy into reverse and racing further into the past in terms of energy. Canada, for their part, is making the baffling decision of doubling down on building oil pipelines even as the nation literally burns from climate change (re: Whitecourt, Alberta). This while seemingly treating the future of energy – renewable energy – as seemingly a non-priority. It really is quickly becoming the latest national embarrassment.

While I could go on about the numerous missteps that brought western nations to this point in time, there was another development that caught my eye – thus prompting this article in the first place. That has to do with underseas internet cables under the Strait of Hormuz. While Iran has been demanding the collection of tolls from oil shipments on the surface, Iran is now also demanding fees for the data flowing beneath the surface of the water. From ArsTechnica:

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.

This, of course, has shades of network neutrality here. When it comes to infrastructure on the consumer side of things, that infrastructure is frequently either paid for through consumer subscription fees or subsidized by government – ala paid for by taxpayers. So, more often then not, this network infrastructure was already paid for. By demanding fees from the web services, Iran is effectively double-dipping here. From a technological perspective, there isn’t really any justification for Iran to be making such a move.

This is by no means a novel idea. In 2023, when South Korea was demanding “network fees” from online platforms even though the infrastructure was already paid for, major streaming service, Twitch, left the country altogether.

In 2022, there was a particularly bitter fight in the US when the big telecom giants began attempting to tear down network neutrality rules only to be mercifully held up in the courts. The idea there being that the ISPs wanted to charge websites additional fees so they could enjoy so-called “fast lanes”.

Even Canada had a brief moment of entering into the network neutrality debate when Bell attempted to charge people extra for accessing HD content.

While things have seemingly calmed down in the last year or so (or maybe things were happening behind the scenes and I was busy reporting on much larger boondoggles like link taxes and age verification, I don’t know). Still, it is a rather curious development to see this network neutrality debate suddenly pop up in Iran of all places.

Of course, the issue here is likely to be much less technological and more about fighting an actual war the US started. After all, the main thrust of imposing these fees appears to have less to do with mythical network congestion and more to do with the fact that the US is invading another country while simply not having an exit ramp. The move is likely driven by war more than lobbying and technology (which, lets face it, is a pretty unusual set of circumstances for network neutrality). The aim is clearly to hurt America and they feel that targeting the largest companies in America is an effective way to do it. By imposing network fees on US companies, that seems to be the vector Iran has chosen to target the US government.

At any rate, a country that threatens the supply of data as a way to target an adversarial nation would be an idea that would’ve been laughed at 20 years ago. Today, however, that is increasingly being a serious proposition to hurt a nation and I think it’s safe to say that fewer people are laughing at such an idea.

Drew Wilson on Mastodon, Bluesky and Facebook.