ACLP Testimony & Questions Regarding New York State’s Municipal Infrastructure Program

The ACLP testified before the New York State legislature regarding the state’s Municipal Infrastructure Program (MIP). Our testimony is available here.

The MIP is a $228 million program that will support municipal broadband projects across the state. It is being funded via the federal Capital Projects Fund, which was created by the American Rescue Plan Act and is being administered by the U.S. Department of Treasury.

New York’s ConnectALL office (CAO) is overseeing the MIP, along with the state’s BEAD program and several other broadband-related initiatives. CAO recently released a Request for Applications (RFA) for the MIP.

In its testimony before the legislature, the ACLP observed that, for a variety of reasons, the MIP will likely squander once-in-a-lifetime grant funding on municipal broadband overbuilding. At the same time, CAO has indicated that it is not confident that available BEAD funds will be inadequate to reach every remaining unserved and underserved location in the state. This raises the likelihood that the MIP will subsidize duplicative network infrastructure in served areas while some parts of the state remain unserved because BEAD funds proved insufficient. The ACLP recommended that the legislature require the CAO to allocate MIP funds for projects that target only unserved areas to ensure that the state is finally able to close its digital divide.

During a webinar convened by the CAO on February 1 regarding the MIP, the office noted that it was open to receiving questions about the MIP. In response, the ACLP submitted the following questions in an effort for the public to benefit from additional information about the MIP. When answers are supplied by the CAO, we will update this post accordingly.

1. Page 3 of the RFA states that the CAO “may provide other forms of non-monetary assistance to improve a MIP project.” In keeping with the spirit, if not the letter, of relevant state laws focused on promoting the “equitable” deployment of broadband services, will CAO make this assistance available to non-MIP recipients? For example, if a private ISP wishes to avail itself of make-ready assistance being provided by CAO to an MIP grantee, will the CAO extend those benefits to the private ISP?
2. Will proposals only focused on the middle-mile infrastructure receive funding? Or is there a requirement/preference for last-mile infrastructure?
3. Is there a match requirement for MIP grantees?
4. Has CAO set targets for using MIP funding to address unserved and underserved areas? CAO has already stated that it does not believe that available BEAD funding will be sufficient to address 100% of the state’s remaining unserved and underserved areas, leaving MIP funding as a powerful tool for helping the state achieve its goal of 100% access.
5. Similarly, has CAO estimated the amount of overbuilding that will result from the MIP? ESD Commissioner Hope Knight is on record with the Legislature stating that overbuilding will occur via the MIP (per her remarks at the Joint Legislative Budget Hearing convened by the Senate Finance Committee and Assembly Ways & Means Committee on January 30, 2024).
   
6. Does CAO have a preferred balance of the service mix of MIP-funded projects – i.e., the percentage of unserved and underserved locations addressed vs. the percentage of served locations that will be passed with a duplicate network?
7. Will CAO award MIP grants to applicants wishing to build networks in areas that are mostly served?
8. Does CAO plan to provide educational resources to municipalities regarding the myriad aspects of pursuing, building, and operating a broadband network? Will CAO make resources available regarding the pros and cons, successes and failures, etc. of the array of municipal broadband models?
9. Will grant recipients be required to publicly release data regarding the financial and operational performance of MIP-funded networks? Will they be required to release customer counts and other data necessary for the public to gauge the actual performance of the network in relation to the projections included in their MIP application?
10. Regarding Affordable Pricing requirements – will MIP grantees be permitted to offer service at below-cost prices? Are measures in place to prevent predatory pricing?
11. Will CAO allow MIP grantees to engage in cross-subsidization?
12. Has CAO developed protocols to address MIP-funded projects that struggle to self-sustain? Will CAO seek additional resources from ESD or the state to subsidize struggling projects?
13. Under what circumstances will the state seek to claw back funds from MIP grantees?
14. To what extent will information about MIP applications be made public? Will full applications be made publicly available? Summaries?
15. Will applicants be required to submit detailed pro forma and other financial information regarding their proposed projects?
16. Will MIP-funded open access networks be permitted to provide partner ISPs with a term of exclusivity? Will these networks be required to offer more than one ISP choice to customers? Or will only one ISP suffice?
17. How will CAO account for MIP-funded projects during its BEAD challenge process?
18. Will MIP grantees be required to offer free or low-cost broadband service in the event the ACP is not renewed?

Michael Santorelli is the Director of the ACLP.