Iran Says Big Tech Should Pay to Pass Through Hormuz

On the 18th, Iran announced it would start charging “sovereignty fees” to all fiber optic cables passing through the Strait of Hormuz. Foreign tech and telecom companies would be required to comply with Iranian law, pay licensing fees, or face possible disruption of global internet traffic.

What's The Plan?

Iran's plan has three parts:

• Foreign companies must pay for the right to run cables through the strait.
• Big Tech must operate under Iran's legal framework.
• Iran would control all repair work on cables in the strait, basically charging for access to fix damaged lines.

Iran is pointing to Article 79 of UNCLOS, which gives coastal states some control over how cables enter their waters. But international law experts say while this applies to future cables, existing cables are protected by prior contracts.

How Much Are They Talking?

Egypt set a precedent, they pocket roughly $250–400 million every year from subsea cables crossing their territory, primarily via the Red Sea and Mediterranean. Iran saw that, and they want in on the action by turning the Strait of Hormuz into a “strategic hub for creating legitimate wealth”.

What Can Iran Do?

They aren't threatening to cut cables. At least not right now. Their strategy is controlling repair access. Undersea cables break regularly (causes: anchors, earthquakes, or wear), and specialized repair ships have to enter the area to fix them.

These ships are big, slow, unarmed and not stealth at all. Iran could just say no to granting repair permits for cables in its zones, and cause outages in affected regions that could last for weeks or months, instead of the usual two to three weeks.

Global Impact

Cables in this region account for less than 1% of global international bandwidth as of 2025, so regional problems could be huge, but the global internet should be fine. But Gulf neighbors, India, Europe-Asia finance, East Africa are at risk for internet blackouts.

Can they actually enforce fees? That remains very questionable given U.S. sanctions, but the weight of the threat is still hard to ignore.