RESOLVING THE LEDGER
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Plans to triple application fees and apply a price-per-foot on coastal cable installations have been announced by Oregon
Oregon state planners believe the new structure could raise $1 million per new cable laid
Protecting the coastline has become a political priority in recent years
Oregon has announced plans to introduce a payment structure for service providers laying undersea cables off the coast of the Pacific state.
Currently, the low-tax and zoning incentives on offer make Oregon a particularly attractive location for tech companies including Microsoft and Amazon, and with major data centers (such as Google’s Dalles installation) demanding increasing data infrastructure, state officials believe a new pricing arrangement is overdue.
Oregon Department of State Lands is making the proposal, which seeks to completely restructure the pricing around undersea cables, which has been fixed at $5,000 since 2001.
Price per foot levy
Even by tripling application fees, Oregon will still be a more affordable alternative for service providers upgrading or adding undersea cables than both California and Washington.
The payment structure under consideration covers fees for applications and compensation “for undersea infrastructure located on submerged and submersible land within Oregon’s territorial sea.”
Currently, new application fees are $5,000, with the proposed new fee set at $15,000. Renewal applications are set to increase from $5,000 to $7,500, with a new encroachment application fee, also set at $7,500 (this describes any building or development on any state-owned land that restricts its usual purpose).
Cables up to three inches in diameter have been assigned a $3-per-foot basic annual fee, with conduits charged at $7.
But how might these fees be applied to any new cable installations? Some calculations based on the Amazon Bitfrost cable project, which determined that a total of $1,450,380 was due for two decades, which would be funneled into Oregon’s Common School Fund.
These fees are a revision of an earlier, more expensive set of proposals, and while the Amazon Bitfrost project example may seem high, it is a literal drop in the ocean compared with the budgets required to lay cables across the Pacific – somewhere in the region of $400 million.
Corporate responsibility
Oregon is also proposing new rules that govern how much information companies submit in applications. This covers everything from decommissioning outdated cabling to outlining responses to earthquakes (such as an anticipated Cascadia Subduction Zone event, which is believed to be overdue).
Various challenges to how companies operate off the coast of Oregon have arisen in recent years, such as a Meta subsidiary attempting to install new cabling at Tierra Del Mar in 2020. This abandoned project resulted in a pollution incident with 6,500 gallons of drill fluid dumped in the ocean and a pair of sinkholes appearing the following year.
The fees are expected to be introduced in January 2027.
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