Oregon is preparing to make subsea cable operators pay more than a token filing charge for using state-controlled seabed near its coast, with the proceeds slated for the state’s Common School Fund.
The change would apply to cable installations within three miles of Oregon’s shoreline, according to reporting by Philomath News and materials from the Oregon Department of State Lands. For more than two decades, the relevant charge has been a $5,000 application fee, a structure that dates to 2001. That is not much of a rent bill for infrastructure carrying global internet traffic across public seafloor.
The new schedule is still under discussion. The current simplified proposal would charge $3 per linear foot of cable, plus $7 for each section of bore pipe, the protective pipe used where the cable comes ashore. The Department of State Lands described the revised rate as “competitive-to-low” in its rulemaking presentation.
The department’s own example shows why cable companies are paying attention. Using Amazon’s Bifrost cable as a rough model, the agency calculated a 20-year lease payment of $1,450,380, due as a lump sum. The state says that kind of money would go to the Common School Fund, which supports Oregon schools.
Oregon had considered a more expensive version of the fee, according to a Department of State Lands summary. That earlier approach would have factored in the cross-section of bore pipe, but the state moved away from it after concerns that the calculation was too complicated and burdensome.
The state is trying to collect rent without scaring off the same companies it has spent years courting. Oregon has no sales tax, and enterprise-zone incentives have helped draw large technology companies, including Amazon, Microsoft and Google. Oregon Public Broadcasting has reported that the state has about 140 data centers and 16 undersea cables of various types.
The comparison point sitting just south is California. The Oregon Department of State Lands said California charges an estimated $5 per cable foot each year. Oregon’s proposed fee would be collected as a one-time payment over a 20-year lease, making the state’s pitch clear: pay more than before, but not so much that a cable route planner starts redrawing maps.
The proposed Oregon charges are small next to the cost of building the cables themselves. TeleGeography has reported that a transatlantic submarine cable can cost about $250 million, while a Pacific crossing can reach about $400 million. Against those budgets, a seven-figure lease fee over two decades is not the line item that decides whether a project exists.
Already approved cables may avoid most of the new costs. Oregon Public Broadcasting reported that some recent agreements, including Amazon’s Bifrost contract, included language requiring payment of new state-law fees. That same agreement also included a $300,000 opt-out for that clause, which OPB reported Amazon paid at the time.
The practical result is uneven. Future cable projects may face a real seafloor lease charge for the first time in Oregon. Some existing projects may have already bought their way out of the new bill.
This story draws on original reporting from Tom's Hardware.
