Iran is making headlines by threatening to charge tech giants for using subsea internet cables that run through the Strait of Hormuz. This strategic waterway carries a significant amount of internet and financial traffic between Europe, Asia, and the Persian Gulf.
Iranian officials are hinting at possible disruptions if companies don’t comply. Recently, the Islamic Revolutionary Guard Corps (IRGC) made it clear they see this as a way to generate revenue. They want heavyweights like Google, Microsoft, Meta, and Amazon to adhere to Iranian laws and pay licensing fees to use the cables.
The situation raises questions. Many of these companies have invested in infrastructure that may go through the Strait of Hormuz; however, it’s not confirmed if any of these cables actually cross into Iranian waters. Furthermore, due to strict U.S. sanctions, these companies are legally barred from making payments to Iran, making many observers think these threats might be more strong rhetoric than a realistic policy.
Despite this, Iranian media continues to warn of serious consequences for global data traffic if international companies refuse to yield. A disruption could affect countless services like banking, online gaming, and even military communications.
Dina Esfandiary, a lead analyst at Bloomberg Economics, believes Iran’s strategy aims to showcase its power in the region. By holding a key position, Tehran is trying to ensure its survival and impose costs on the global economy to prevent future attacks against it.
“By causing disruptions, they hope to create an environment where no one would dare to attack Iran again,” Esfandiary explains.
The Strait of Hormuz is not just vital for oil. It’s also a critical digital corridor. Many undersea cables linking Asia and Europe pass through this region. The potential for damage or disruptions here is alarming. It could cascade across continents, affecting economies from the Middle East to India.
Interestingly, two notable cables—the Falcon and Gulf Bridge International—do run through Iranian waters, as confirmed by telecom research groups. This adds a new layer of complexity to the situation. While Iran hasn’t openly threatened to damage these cables, officials have made it clear they intend to punish countries seen as adversaries, which often raises fears of asymmetric warfare.
Security risks are already a concern. With tools like underwater drones and submarines, the IRGC could pose a threat to these crucial infrastructures. Such an attack could trigger a “digital catastrophe,” according to experts.
In 2024, a previous incident involving Houthi militants disrupted about 25% of regional internet traffic when a sinking vessel damaged cables. If similar actions occur in the Strait of Hormuz, it could lead to major complications in global internet connectivity.
It’s noteworthy that while subsea cable damage can be severe, current systems are generally designed to quickly reroute traffic. However, as our world becomes increasingly reliant on these cables, the stakes are higher than ever.
Historically, attacks on communication cables aren’t new. The first transatlantic telegraph cable was laid in 1858, and among early tactics in World War I, Britain severed Germany’s cables to disrupt communications. Fast-forward to today, the nature and scale of damage have changed significantly.
Iranian news outlets cite international law when asserting their right to impose fees on cables in the Strait of Hormuz, referencing the 1982 United Nations Convention on the Law of the Sea. While Iran signed this agreement, it has not ratified it. However, legal experts state it may still be binding under customary international law. Iran points to Egypt, which benefits from fees for cables passing through the Suez Canal, as a model for their own strategy.
As of now, observers remain cautious. While Iran appears to be flexing its muscle, the real question is how effectively it can act on these threats. The world is watching closely.
For more on the implications of subsea cables, visit this report by TeleGeography.
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