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TechOregon to charge undersea cable operators per linear foot, funneling millions to state schools
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Oregon lawmakers are set to replace a decades-old $5,000 one-time fee for undersea cables with a new pricing structure that charges $3 per linear foot of cable plus $7 per section of bore pipe within three miles of the coast. The Oregon Department of State Lands estimates this will generate millions per cable over 20-year leases, with revenue funneled into the state's Common School Fund. For example, Amazon's Bifrost cable would cost approximately $1.45 million over two decades. The revised rates are considered competitive compared to California's $5 per foot annual charge. Oregon aims to remain attractive for tech investment, hosting about 140 data centers and 16 undersea cables. Already-approved cables may be largely exempt, though some contracts like Bifrost included a clause allowing new fees with a $300,000 buyout option.
Source report
After charging only a one-time fee for undersea cables along its coast for decades, Oregon lawmakers are now addressing what they see as a missed opportunity for tax revenue. The state plans to introduce a new fee structure for cable installations within three miles of its coastline, with proceeds directed to the Common School Fund.
Current vs. Proposed Fees
The existing fee structure, established in 2001 (25 years ago), consists of a simple $5,000 application fee. The new pricing, still under discussion, would be:
- $3 per linear foot of cable
- $7 per section of bore pipe (the protective structure covering the portion closest to shore)
Oregon's Department of State Lands (DSL) estimates that on a 20-year lease, this would generate millions of dollars per undersea cable. Using Amazon's Bifrost cable as an example, the DSL calculated a total of $1,450,380 over two decades, paid in one lump sum.
Revised from Earlier Proposal
The current rates were revised from an earlier, more expensive proposal that would have factored in bore cross-section. That calculation was dismissed as too complicated and, presumably, too onerous.
Competitive Positioning
The DSL describes the revised rate as "competitive-to-low," reinforcing Oregon's aim to remain attractive compared to its southern neighbor, California, which charges an estimated $5 per cable foot on an annual basis.
Oregon continues to court investment in its tech sector, which includes:
- Approximately 140 datacenters
- 16 undersea cables of various types
The state also benefits from no sales tax and enterprise zoning incentives, making it a favorable location for major players such as Amazon, Microsoft, and Google.
Context: Cable Costs
Spending $1–2 million over two decades is minimal compared to the initial outlay required for undersea cable installation:
- Transatlantic connector: ~$250 million
- Transpacific connector: ~$400 million
Exemptions and Existing Contracts
Although not finalized, already-approved cables may be almost entirely exempt from the new fees. Some recent contracts, including the one for Amazon Bifrost, included a clause requiring payment of any fees imposed by new state laws. However, the contract also contained a specific $300,000 "out" for this clause, which Amazon paid at the time.
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Oregon to Charge Undersea Cable Operators New Fees, Directing Millions to State Schools