TED Budget Article VII Part QQ (S.2508)/(A.3008)

March 2nd, 2021

Executive Budget Proposal S.2508/ A.3008

MEMORANDUM IN OPPOSITION

Upstate United, a non-partisan, pro-taxpayer, pro-economic growth, education and advocacy coalition made up of business and trade organizations from Upstate New York opposes this article of the proposed executive budget.

This proposal includes a mandate that broadband service providers offer broadband service for low-income consumers for $15 a month. Upstate United supports the expansion of broadband access and making it affordable for all New York State residents, however this proposal is not the correct way to achieve that goal and would violate federal laws already in place.

The pandemic has exposed the importance of having broadband access for all residents, the shift towards a digital economy and virtual learning has made broadband access a necessity. This proposal would violate Federal Communication Commission law on regulation of mobile wireless rates, Section 332(c)(3) of the communications act that states “no State or local government shall have any authority to regulate… the rates charged by any commercial mobile service or any private mobile service.”

Consistent with the approach taken in the federal Emergency Broadband Benefit Program, broadband services should be funded through a federal direct benefit program. The recently-enacted federal Emergency Broadband Benefit provides a discount of up to $50 per month ($75 in Tribal areas) towards broadband service for eligible households, including a one-time discount of up to $100 to purchase a connected device. New York should leverage these funds to offer this new benefit as well as other broadband assistance programs in President Biden’s policy priorities.

While there are some indications that through various means up to 98% of the state now has broadband coverage, the reality is that, in spite of enormous progress by the state in recent years, a great many New Yorkers in rural regions remain unserved. The impacts of the lack of broadband during the continuing pandemic have been severe as rural residents and families have been unable to access tele-medicine, remote schooling or to engage in home based work. Hopefully federal infrastructure funding will be forthcoming but regardless, the state must remain committed to broadband infrastructure extension in these regions and must avoid actions which erode through taxation, fees and mandates the capital resources that providers need to carry on with infrastructure development.

Rather than coordinating with the public and private sectors to make broadband more accessible and affordable this proposal would violate federal laws and attempt to have a mandate solve everything, causing more problems in the end. By requiring private companies to provide a service for a non-flexible and extremely discounted price these companies will have to regain their profit from their other customers, raising rates for the majority of NY residents. This will be yet another financial burden for the hard working people of NY, during a time when the economy is harsh and people are struggling as well as a barrier to entry for broadband providers looking to bring their services to NY as well as serve as yet another reason for current providers to want to pack up and leave NYS altogether. In the already harsh business and regulatory climate of NYS this would be yet another mandate that hurts people and businesses, doing the exact opposite of what the State needs.

For these reasons, Upstate United strongly opposes this article of the proposed executive budget.