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Friday, February 18, 2022

Attempts to Eliminate Gaps in Rural and Poor Areas:

$1.6B broadband initiative exempts DOT fee in 2022 Executive Budget

The state’s head of economic development assured lawmakers Wednesday the anticipated $1.6 billion investment in the governor’s budget to expand access to high-speed internet will be different from past broadband initiatives, exempting controversial fees to bridge the digital divide in rural and poor communities.

Gov. Kathy Hochul’s $1.6 billion ConnectAll Initiative — one of 232 proposals in her $216 billion executive budget — will invest $1 billion in new digital infrastructure, capital investments, regulatory reforms and digital access programs to give New Yorkers more high-speed internet coverage in rural areas and more affordable competition in urban neighborhoods.

The state Public Service Commission is expected to release a Broadband Assessment Program survey in May providing granular statewide data to high-speed internet access for the first time.
“We’re going to have better data, so we’ll be able to better understand how to deploy the broadband infrastructure more effectively,” Empire State Development President & CEO Hope Knight told senators and assemblymembers during their annual budget hearing on economic development. Wednesday marked the final day of 13 joint legislative budget hearings held since last month.

All fees will be exempt in projects funded under ConnectAll, including the state Department of Transportation’s lofty fees to installers who build fiber optic broadband cables in a state-controlled highway right-of-way implemented in 2020. The fees amass to hundreds of dollars per foot, increasing the total cost of some projects by millions of dollars, which led utility companies to reroute buildouts to avoid state-owned rights-of-way — exacerbating hurdles to expand access.

“In deploying a broadband, we understand that it’s very expensive to deploy rural projects,” Knight said. “That was one of the drivers of exempting the fee under the ConnectAll.” Small or mid-sized family-owned providers have canceled broadband expansion projects because of the fee. Empire State Development has not conducted an analysis about the fee and its potential economic impacts.

Sen. George Borrello, R-Sunset Bay, pleaded with Knight to advocate to legislative leaders and Democrats in the majority to eliminate the fee altogether and have the department investigate the effects of the DOT’s requirement.

“So what you’re saying is, if you’re taking government money, then we will exempt you, but if you’re just paying your own way, we won’t exempt you,” Borrello said. “That’s why you have all these projects that have been scaled back or canceled where they’re redrawing lines so they avoid state rights-of-way in the rural areas that I represent. That’s a big problem.”

ConnectAll is expected to assist in removing barriers for underserved areas receiving high-speed broadband including fee exemptions for rural deployments, standardizing processes for state land and rights-of-way deployments and addressing issues in serving multiple-dwelling units, according to the executive budget.

Assemblyman Al Stirpe, D-North Syracuse, noted the state’s past investments in broadband before, including the $500 million Broadband For All initiative under former Gov. Andrew Cuomo, which improved internet connectivity across the state with grants and incentives to utility companies, but gaps in access persist in rural or poor areas.

“What we got were a lot of reports that said everything was great, and as we all knew, that wasn’t really true,” Stirpe said. “Rural and urban areas continue to have lots and lots of problems.” About 1 million New Yorkers are estimated to lack high-speed internet connection at home, according to a September report from state Comptroller Thomas DiNapoli’s office.

Lawmakers challenged Knight about why this proposal will be different.

“We were working with the best data that we had, but the data was not great,” she said. The PSC’s survey this spring is expected to include a detailed map of the state’s broadband access and conduct a comprehensive study on New York’s high-speed internet availability, reliability, cost and the number and types of internet service providers available in each area including dial-up, broadband, wireless, fiber, coaxial or satellite. The report is expected to provide statewide granular broadband data for the first time.

“So we’ll be able to understand better how to penetrate the state more with this investment,” Knight said, adding Hochul’s proposed $1.6 billion ConnectAll initiative is the state’s largest investment in digital infrastructure. “The funding will get us greater coverage across the state, and then, we’ll be able to take much more of a holistic approach,” she added. The $500 million Broadband For All program was not enough to provide broadband connectivity throughout the state, Knight said.

Empire State Development officials will also pursue ways to expand municipalities providing broadband services. The state is also set to receive $800 million in federal funding for broadband buildouts from the $1.2 trillion Infrastructure Investment and Jobs Act signed by President Joe Biden in November.

Sen. John Liu, D-Queens, questioned why, with the incoming large federal investment, the state should commit a multi-billion-dollar investment for broadband from the state’s coffers. The budget includes $300 million under the ConnectAll Initiative to administer the program, grants, rural broadband deployment and access to state-owned rights-of-way, last-mile support and more financed with state taxpayer funds.

The initiative’s remaining investment will come from prior federal COVID-19 relief funds, Knight said. Priority will be given to projects that will bring high-speed internet to unserved areas, public libraries and education centers.

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