New York lawmakers call for 'fiber tax' repeal

New York lawmakers are rallying around a "fiber tax" repeal as the state works to pass a budget for 2022-2023, due April 1.

A fiber-optic fee with the NY State Department of Transportation was enacted in 2019, enabling the department to impose a cost of $20,000 per mile on fiber installed on state right of ways.

Now, several local and state elected officials are calling for the governor to support legislation repealing the tax, saying it imposes a burden on providers.

In a letter last week, New York's Oneida County Executive Anthony Picente and Herkimer County Board of Legislators Chairman Jim Bon wrote to State Senator Michelle Hinchey and Assemblywoman Carrie Woerner in support of a bill they co-sponsored to eliminate the fiber fee, stating it was preventing their counties from progressing on projects. (A prior bill Hinchey and Woerner introduced to reform the state's pole attachment law was signed by Gov. Hochul in December but their fiber bill remains in the legislature.)

"Having recently completed a broadband assessment and mapping study, Oneida and Herkimer counties are prepared to move forward to address the needs of our underserved communities. We have identified projects, public and private partners and are poised to move forward. Unfortunately, the DOT fiber optic fee is presenting a burden that significantly increases the cost per mile of fiber laid," said Picente and Bon in their letter.

And on Wednesday, State Senator Tom O'Mara, a member of the Senate Energy and Telecommunications Committee, issued a press release saying the tax hinders broadband expansion in rural communities and must be repealed in the state budget.

"Governor Hochul should give this repeal the urgency it demands to ensure that broadband development across rural, upstate New York receives an equal and fair commitment," said O'Mara.

Governor Kathy Hochul introduced a $1 billion "ConnectALL" plan to close the digital divide in New York at the State of the State Address in January 2022.
(Source: Governor Kathy Hochul via Flickr)

The press release also links to a petition – at stopthenyfibertax.com – encouraging constituents to write to the governor urging her to repeal the tax before the state receives its share of federal funding from the Biden administration's infrastructure law.

A pre-written constituent letter to the governor reads, in part:

The fiber tax, which was implemented in the 2019-20 state budget, was cited last year by the state comptroller as one of the roadblocks preventing the more than 1 million households across New York that lack broadband access from obtaining the connectivity that is absolutely necessary for personal and professional safety, wellbeing, and overall success.

With $100 million in federal infrastructure funds coming to New York to help close the digital divide exacerbated by the COVID crisis, it is critical that the state maximize this once-in-a-generation opportunity by removing obstacles preventing broadband from reaching those who don’t have it – that means the fiber tax must go.

The letter further says that the governor's $1 billion ConnectALL initiative to end the state's digital divide released this year "cannot fully succeed if the fiber tax remains in place."

'Regressive tax'

To that end, a document released in January outlining the governor's ConnectALL plan does call for exempting ConnectALL projects "from use and occupancy fees for fiber in the State right-of-way, reducing costs for program participants."

That step requires legislation. But the current one-house budget resolution approved by the state legislature goes a step further to repeal the tax entirely.

"The Senate intentionally omits the Executive proposal exempting the fiber optic right of way fee for ConnectALL program grantees, and addresses the issue in the Senate's broadband proposal by repealing the fee completely," reads the state senate's budget resolution.

However, according to Sen. O'Mara, Governor Hochul has not yet indicated her support for full repeal. The governor's office did not respond to a request for comment as of this writing.

In an email to Broadband World News, Shirley Bloomfield, CEO of NTCA – The Rural Broadband Association, called the tax "regressive" and expressed support for full repeal as the state seeks to close its digital divide.

"The repeal of this regressive tax is the only sensible way to proceed given the importance of building future proof networks and ensuring every dollar goes to building networks. Every dollar in this tax takes away – literally – investments going into the ground to serve consumers in the state of New York," she said.

Related posts:

• New York introduces $1B 'ConnectALL' broadband plan
• ECC Technologies hits the streets to map New York's broadband
• Consumer groups, states join in support of New York's $15 broadband mandate
• The Divide: Shirley Bloomfield on bridging the 'rural-rural' divide

— Nicole Ferraro, site editor, Broadband World News; senior editor, global broadband coverage, Light Reading. Host of "The Divide" on the Light Reading Podcast.