New York broadband providers are slow to react to the details of a new state program requiring mid-sized and large companies to provide internet service for low-income families for $15 per month.
The state’s historic $212 billion budget, which the Legislature adopted nearly a week late Wednesday night, mandated a new program requiring companies that provide internet connection to 20,000 households or more to offer broadband service of at least 25 Mbps at the discounted rate of $15 per month to state households in need.
Lara Pritchard, senior director of communications for Charter Communications’s Northeast Region, would not comment on the state’s new program or the potential fiscal impacts on the company.
“We are studying the new law and don’t have anything to add right now,” Pritchard said Friday.
Since 2017, the company has had the Spectrum Internet Assist Program, which offers $14.99 a month internet service to households with one or more members who receive benefits from the National School Lunch Program, Community Eligibility Provision of the school lunch program or Supplemental Security Income for applicants aged 65 and older.
New Yorkers who may receive the new $15 monthly benefit, Public Service Commission spokesman James Denn said Friday, include people who are eligible for free or reduced-priced lunch through the National School Lunch Program or people who receive Supplemental Nutrition Assistance Program (SNAP) benefits.
New Yorkers who receive Medicaid benefits or people enrolled in senior citizen or disability rent increase exemptions may also apply for the program. Recipients of utility benefits may also be eligible, Denn said.
“The enacted state budget includes first-in-the-nation legislation requiring internet service providers to offer an affordable $15 per month high-speed internet plan to qualifying low-income households,” Denn said. “To further bridge the gap, the state has partnered with Schmidt Futures and the Ford Foundation to launch ConnectED NY, an emergency fund to provide approximately 50,000 students in economically disadvantaged school districts with free internet access through June 2022. Providers need to offer the service within 60 days.”
Sen. Dan Stec, R-Queensbury, voted against enacting the new program on the Legislature floor in the early Wednesday, he said, largely because of the new broadband provisions.
The north country and rural or less densely populated regions across upstate New York have battled acquiring adequate broadband connection or fewer options from small service providers for years. New Yorkers in public housing and poor neighborhoods also historically lack high-speed internet access.
“[The broadband sections] highlight the challenge I see as we pivoted from broadband access to affordability, and we still have an access problem in the north country,” Stec said. “While I’m not surprised it was very easy and convenient to talk to the bigger providers, the bigger providers are taking the low-hanging fruit where the money is easy. They have opted not to choose to [pursue] business in the north country. They’ve taken a niche, but their model is different. The small providers that operate in my area resent the big guys that passed over this are calling the shots as how to define the future of their own businesses.
“If we keep making it harder for these small providers to make a living, this is the hard-to-serve- areas that big companies have passed over. The margins are smaller, but there still is money to be made and there are people making a goal of it.”
The state Public Service Commission ruled the $15/month program would have an unsustainable financial impact on companies that provide connectivity to fewer than 20,000 New York homes.
The commission and Democratic lawmakers take the position the larger companies can afford to offer $15 monthly internet services to low-income New York families, said Senate Finance Committee Chair Liz Krueger, D-Manhattan. The additional clients, even at the reduced price, will increase the company’s market share and could make it easier for businesses to expand, the senator added.
Lawmakers consulted large providers when drafting the policy, adding many providers already offer options for low-income households.
“I suppose if it wasn’t working, they would come back to us or their own internal processes to determine a different formula,” Krueger said. “We want to have everyone in New York to have access to broadband that is both fast enough and cheap enough to afford.”
Providers designated to participate in the $15-per-month program by the PSC will have 60 days to adjust their financial modeling and offer the discounted service. Providers can appeal the commission’s decision.
Officials do not have an estimate of the number of New Yorkers who will be eligible for the program, Krueger said.
“There’s always a catch between who’s eligible and who applies to get something,” she said. “It’s actually a much smaller number of who apply on paper versus who would be eligible.”
Shannon Sullivan, spokesperson for Consolidated Communications, said the new program would not apply to the company, formerly known as Fairpoint Communications.
“We would be exempt from this requirement based on the number of homes passed in the market,” Sullivan said. “Consolidated offers a range of affordable services for our customers. Specific pricing varies based on the mix of subscribed services.”
Verizon Wireless, which offers high-speed fiber internet, phone and television services, did not return multiple requests for comment as of press time Friday.
Gov. Andrew Cuomo this week threatened to revoke providers’ state franchises if they refuse to participate.
“To these internet companies, I say, again, you don’t operate in the state of New York by an act of God — you operate in the state of New York by the will of the people,” Cuomo said Wednesday during a briefing about the 2021-22 budget. “If you do not do this, you will lose your franchise in the state of New York and that’s a promise.”
Cuomo included plans to improve statewide broadband connectivity and affordability in his executive budget released in January. Thousands of students without proper internet connectivity at home fell behind in schoolwork and education during the COVID-19 pandemic, widening the disparities in poor, Black and Latino communities.
“Everyone has to have access — not only access, but access to affordable broadband,” Cuomo said, adding the Legislature also budgeted for a $15 million fund to help low-income students connect to free internet access. “We learned a terrible lesson with remote learning. Remote learning works if the student has the right devices, if the student has internet access, if the student’s family can afford internet service. So, this is a major reform for social equity.”
The state budget also includes a $1 million provision requiring the Public Service Commission to publish a detailed map of the state’s broadband access and conduct a comprehensive study on New York’s high-speed internet availability, reliability and cost.
Earlier this year, Cuomo vetoed a bill spending $3 million on more detailed maps after lawmakers passed a measure to study the state’s connectivity, challenging a national statistic that 98% of the state has access to high-speed internet service. The governor promised to include funding for the new maps in the 2021-22 spending plan.
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