SCHUMER REVEALS: OVER $170M IN FED FUNDS THAT BELONG TO NEW YORK TO HELP EXPAND BROADBAND ACROSS UPSTATE WILL BE DIVERTED TO OTHER STATES; SENATOR PUSHES FEDS TO REVERSE COURSE & DIRECT THE MONEY TO UPSTATE NY COMMUNITIES THAT NEED RELIABLE INTERNET ACCESS
Verizon Did Not Use Fed “Connect America Fund” Money To Expand Broadband Upstate, Senator Says Now Other NY Companies Should Be Given A Chance; Money Should Not Be Sent Away
Schumer Has Long Advocated For & Propelled Upstate Broadband; Senator Helped Deliver These Endangered Fed Dollars To New York In The First Place
Schumer Turns Up The Volume On FCC To Keep Money For NY In NY
During a conference call with reporters, U.S. Senator Charles E. Schumer today revealed that over $170 million in federal funds that was set aside for Upstate New York to expand broadband and high speed internet service could be sent to other parts of the country. Many telecommunications companies are using federal investment from the Connect America Fund to expand broadband Upstate, but Verizon did not accept the money it was allocated. Now, the FCC wants to take this unused money from New York and bid it out nationally. Schumer said the FCC should reverse course and keep money designated for New York in New York and allow other companies to use these funds so to improve broadband access across the state.
“The federal government should invest—not divest—in Upstate internet access. That is why I am urging the FCC to immediately reverse course on this senseless proposal that takes money away from Upstate New York – we must keep the broadband money for New York, in New York. Other companies in Upstate should have the opportunity to bid on this funding, so we can keep this money where it belongs and use it to improve Upstate NY’s broadband access. We want this broadband funding to help places like Washington County, not the State of Washington,” said U.S. Senator Charles E. Schumer.
Schumer is partnering with New York Governor Andrew M. Cuomo to reclaim the $170 million in federal investment. These federal funds would complement the $500 million broadband deployment plan Governor Cuomo announced just last year. New York State wants the opportunity to partner with the FCC to deploy the outstanding $170 million in order to help encourage companies serving Upstate New York, to expand broadband service in New York, and Schumer is advocating for the FCC to accept the partnership offer.
“Access to high speed Internet in every corner of New York is key to unlocking our full economic potential and the reason why this administration has made an unprecedented commitment through our $500 million New NY Broadband Program. We strongly oppose any efforts by the federal government to pull back previously promised funding to New York for this cause. We thank Senator Schumer for his strong support on this vital issue and look forward to working with him to ensure the federal government keeps its commitments to help deliver broadband for all in New York State,” said NY Governor Andrew Cuomo.
Schumer has long advocated for expanding broadband access in Upstate New York. In 2013, Schumer announced that the Federal Communications Commission (FCC) heeded his call and relaxed overly stringent rules so that New York telecommunications companies could more easily access funds aimed at deploying broadband across Upstate New York. Schumer explained that the FCC’s Connect America Fund (CAF) program was set up to award federal funding to private telecommunications companies across the U.S. so that they could deploy and increase access to high-speed broadband in unserved and undeserved areas. Due to its large, unserved population, NY State made up a considerable chunk of those awards, receiving $49 million in annual CAF funding for six years. However, after receiving this funding, only three of the four price cap companies decided to accept the CAF award. Those companies – Fairpoint, Frontier, and Windstream – have been successfully deploying broadband in NY ever since. Schumer explained that Verizon declined to accept the CAF funds, which amounted to over $28 million annually. As a result, the territories served by Verizon, spread throughout the state, are currently denied the opportunity to receive high-speed broadband supported by CAF funds.
Now, Schumer explained, the FCC is proposing to reallocate this unclaimed Verizon money into a national pot. Schumer said this action would result in a national auction in which Upstate New York’s dedicated funding would be sent to other parts of the country. Today, Schumer argued that this is unfair to rural communities across Upstate New York that are still struggling as a result of a lack of broadband connection. Schumer said these funds are critical for the deployment of broadband services across New York, and New Yorkers should not be made to suffer just because one carrier did not want to participate in the program.
Therefore, Schumer is urging the FCC instead adopt rules that enable states like New York, who are conducting their own state-funded broadband auctions, to partner with the FCC in order to achieve deployment objectives that meet or exceed those of the CAF program so that the money can remain where it was originally allocated. Schumer said this would allow New York to keep the money designated for the state and allow other companies to bid on these funds so they may continue improving broadband access across the state in areas where Verizon will not. For instance, Schumer said a partnership between the FCC and the New York Broadband Initiative could be developed that would allow the Commission to continue its stated goal of encouraging state funding of broadband development in unserved communities, while also allowing NY to implement policies that deliver high-speed broadband with the money that was allocated to them. Schumer said that, instead of diverting CAF funds, the FCC should empower states like NY to use their allocated funding to address their broadband needs.
Many Upstate New York homes do not meet the FCC’s broadband benchmark speeds of 25 megabits per second (Mbps) for downloads and 3 Mbps for uploads. According to the FCC’s 2015 Broadband Progress Report, the previous 4 Mbps for downloads and 1 Mbps for uploads standard – set in 2010 – were dated and inadequate for evaluating whether advanced broadband is being deployed to all Americans in a timely way. Increasing the standards for broadband speed is necessary because a single Internet connection typically powers a number of connected devices in a home. This means that, the more devices connected, the more the speed is degraded for each individual user.
According to the FCC’s 2015 report, using this updated service benchmark means that approximately 55 million Americans – 17 percent of the total population – lack access to advanced broadband. This divide is particularly evident between urban and rural areas. In fact, more than half of all rural Americans lack access to 25 Mbps/3 Mbps service. Schumer shares FCC Commissioner Jessica Rosenworcel’s opinion that broadband speed standards should be far past the new 25 Mbps download threshold, to 100 Mbps for downloads. Schumer said this would drastically improve access to the Internet for New Yorkers in the future. Schumer noted that 100 Mbps is the standard New York State has set for most areas.
According to New York State, as of December 2014, there were approximately 221,090 households across Upstate New York that did not have access to 25 Mbps service. According to the FCC, there are 77,965 households in Upstate NY that are eligible to receive unclaimed CAF funding. In addition, the total eligible funding for Upstate NY is $28,307,127 over six years – bringing the total to nearly $170 million. During the call, Schumer broke these numbers down by region:
- In the Capital Region, there were 33,104 households without access to 25 Mbps. In this region, there were 12,954 eligible Verizon locations, for $4,208,870 in federal funding.
- In Central New York, there were 30,071 households without access to 25 Mbps. In this region, there were 8,566 eligible Verizon locations, for $2,769,671 in federal funding.
- In Western New York, there were 20,041 households without access to 25 Mbps. In this region, there were 10,283 eligible Verizon locations, for $3,296,143 in federal funding.
- In the Rochester-Finger Lakes, there were 17,881 households without access to 25 Mbps. In this region, there were 5,404 eligible Verizon locations, for $1,806,365 in federal funding.
- In the Southern Tier, there were 63,717 households without access to 25 Mbps. In this region, there were 19,988 eligible Verizon locations, for $8,186,842 in federal funding.
- In the Hudson Valley, there were 2,719 households without access to 25 Mbps. In this region, there were 1,633 eligible Verizon locations, for $668,054 in federal funding.
- In the North Country, there were 53,557 households without access to 25 Mbps. In this region, there were 19,137 eligible Verizon locations, for $7,371,182 in federal funding.
A copy of Schumer’s letter to the FCC appears below:
Dear Chairman Wheeler:
I write today to urge you, in considering how to allocate unclaimed Connect America Fund (CAF) money, to ensure that money be spent to deploy broadband in the states to which the funding was originally awarded. I understand that you are considering a proposal to reallocate this unclaimed money into a national pot; such a proposal would be unfair to states like New York and would also be contrary to the intent of the program.
The funding allocated under Phase II of the CAF in 2015 was intended to subsidize the construction of high-speed broadband networks, at least 10 Mbps, in unserved and undeserved areas throughout the United States. I was happy to work with you and your predecessor to ensure that the CAF funding was structured fairly and effectively. Due to its large, unserved population, New York made up a considerable chunk of those awards, receiving $49 million in annual CAF funding for six years. Three of the four price cap companies accepted their award and have been successfully deploying broadband in New York. However, Verizon declined to accept the CAF funds, which amounted to over $28 million annually. As a result, the territories served by Verizon, including parts of the North Country, Capital, and Western regions, are currently denied the opportunity to receive high-speed broadband supported by CAF funds.
This does not have to be the case. New York State is eager to partner with you to ensure that these funds are utilized effectively in the areas to which they were originally dedicated. I am extremely alarmed to learn that, instead of this course of action, you are considering a national auction which would result in New York’s dedicated funding being spent in other parts of the country. These funds are critical for the deployment of broadband services across New York, and New Yorkers should not be made to suffer just because one carrier does not want to participate in the program. It would be particularly unfair for New York to lose this money as it has always been a significant net contributor to the Universal Service Fund programs.
In order to address these concerns, I propose that the FCC instead adopt rules that enable states like New York, who are conducting their own state-funded broadband auctions to achieve deployment objectives that meet or exceed those of the CAF program. For instance a partnership with the New NY Broadband Initiative would allow the Commission to continue its stated goal of encouraging state funding of broadband development in unserved communities, while allowing New York and other states to implement policies that deliver high-speed broadband. Instead of diverting CAF funds, the FCC should empower states to use their allocated funding to address their broadband needs.
In addition to these partnerships being the right thing to do, they are also the legally justified course of action. Indeed, Congress did not intend to give the FCC the legal authority to reassign the allocated funds. Likewise, I do not believe the proposed national bidding process would be appropriate or consistent with the Commission’s broadband goals. Although I recognize that the Commission must ensure that CAF funding is efficiently allocated, this should not come at the detriment of states that are in desperate need of broadband services or in contravention of legislatively delegated authority and Congressional intent.
I would encourage the Commission to partner with states on broadband initiatives for the remaining CAF monies. I look forward to discussing this issue further with you.
Sincerely,
Charles E. Schumer
United States Senator
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