New York State Broadband Updates – December 2024

New Developments from the ConnectALL Office and New York Rate Cap

ConnectALL Releases Deployment Program RFA

The Empire State Development’s ConnectALL Office (CAO) issued its ConnectALL Deployment Program Request for Applications (RFA) on December 13, 2024. The CAO is administering the ConnectALL Deployment Program (the Program) which will disburse New York State’s approximately $644 million allocation under the National Telecommunications and Information Administration’s (NTIA’s) Broadband Equity, Access, and Deployment (BEAD) Program. The Program will provide grants for broadband deployment to locations that do not currently have access to reliable, affordable, high-speed internet in New York State. CAO expects projects that receive grants to commence their projects in 2025 and take up to four years to complete them. Applications to the Program are due by February 7, 2025, at 11:59 PM ET and must be submitted through the New York State Consolidated Funding Application (CFA) Portal.¹

The CAO has identified 69,111 locations in New York State that have been grouped into 308 Project Areas and are eligible for new service under the RFA. The CAO will make planned awards available for public comment in the Spring of 2025 and then will submit them to the NTIA for approval by July 25, 2025.² Eligible applicants for Program funds may be individual organizations or a consortium of multiple organizations with a single lead entity. The lead applicant may be a corporation, local unit of government, regional planning board, local development corporation, 501(c)(3) not-for-profit corporation or a new entity created by collaborators. All applicants must complete the Prequalification Application, which is a condition to eligibility and has the same February 7, 2025, application deadline as the Program.³ The Program’s funds may mainly be used for broadband deployment, though some funds may be used for training and workforce development, which will be determined by the CAO on a case-by-case basis if there is remaining funding available for non-deployment uses.⁴

The CAO will prioritize applications that will provide service exclusively via end-to-end fiber (the CAO refers to these as Priority Broadband Projects) but will also consider applications that propose service via other technologies that meet NTIA’s minimum requirements for reliable broadband service, except for digital subscriber line (DSL) technology (the CAO refers to these as Reliable Broadband Projects).⁵ Applicants must submit a proposal to reach 100% of eligible locations in a project area that can be either a Priority Broadband Project or a Reliable Broadband Project. The CAO has established additional coverage percentages below 100% that will allow applicants to complement the 100% coverage proposal with additional proposals that have a lower average cost per location.⁶ An applicant can submit multiple project proposals for a project area and are not limited to submitting such proposals to only one project area.

Some notable RFA requirements are detailed here:

• Applicants must submit a cost proposal and financial projects for a 10-year period for each project proposal within their project area application.
• Applicants must provide a funding match of not less than 25% of project costs unless they request and receive approval for a match waiver.
• Applicants who indicate that they will submit financial security as an irrevocable standby letter of credit must provide a letter of commitment with its project area applicant.⁷
• Applicants must include a low-cost service option that is available at a cost of no more than $15 per month including any recurring taxes and fees.⁸ In their applications, applicants must include their best offers for unbundled broadband products at price points of $50 or less, $75 or less, and $100 or less.

When reviewing applications for Priority Broadband Projects, CAO will award points to applicants that can commit to making Gigabit symmetrical broadband service available to community anchor institutions, including schools, libraries, health centers and public housing organizations, within its project area currently lacking such service.⁹ Applicants will be required to submit regular reports to CAO with information on the projects, including use of funds, buildout status and active service subscriptions at funded locations.¹⁰

Applicants may apply for certain requirement waivers, including waivers of the low-cost option and cost-matching requirements. If an applicant receives a grant and determines that compliance with the low-cost option requirement of making a service option available at a cost of no more than $15 per month would result in unreasonable or unsustainable financial impact, it may request a waiver as part of its response to the RFA. The consumer price may not exceed $65 per month and may not increase during the 10 years that the grant is in effect.¹¹ Applicants may also request a waiver of the requirement that an applicant must provide a funding match of not less than 25% of project costs as part of its project area application. The CAO will review and determine approvals for each of these types of waiver requests.¹²

Challenge to New York Cap on Rates Will Not Be Heard by U.S. Supreme Court

The U.S. Supreme Court decided not to hear arguments that federal telecommunications law precludes New York and other states from regulating rates charged for internet service.¹³ The Affordable Broadband Act (ABA), N.Y. General Business Law § 399-zzzzz, which was challenged by certain broadband industry players, sets a $15 or $20 cap, dependent on service speed, on broadband rates for qualifying low-income households. The New York-based 2nd U.S. Circuit Court of Appeals (Second Circuit) upheld the law based on a 2-1 vote.¹⁴ New York Attorney General Letitia James had agreed not to enforce the ABA while the Supreme Court justices considered whether to review the Second Circuit ruling. Now that the Supreme Court justices have determined that they will not hear the case, New York can bring penalties under the law in 30 days.¹⁵

Additional Assistance

For more information, please contact a member of our Telecommunications Industry Team or the Phillips Lytle attorney with whom you have a relationship.