State legislature repeals fiber-optic installation fee

WATERTOWN — As part of the state’s 2022-23 budget, lawmakers have agreed to repeal the fiber-optic tax to generate cheaper broadband access, particularly in rural areas.

“The fiber optic tax has been eliminated,” State Sen. Daniel G. Stec, R-Queensbury said in a YouTube video released after the budget was approved. “Since it was implemented in the 2019 budget, this expensive fee has impeded new broadband construction. Every community should have high speed broadband access. With this tax lifted we can get closer to making that a reality.”

Assemblyman Mark C. Walczyk, R-Watertown, said that this will reduce costs for broadband companies to lay the necessary cable and infrastructure for affordable, high-speed internet.

“This is a huge win for the people of our state, especially those in the front yard of America where there is little access and for whom I fought so hard to make this a reality,” Walczyk said in a news release. “I am thrilled this is happening so that students, businesses, emergency responders and anyone who wants or needs access to the internet in our neck of the woods will soon have it — and for a reasonable price tag. Keeping internet affordable has to be part of the equation and cutting the entirety of this tax gives companies every incentive to do so.”

Rep. Elise M. Stefanik, R-Schuylerville, said in a news release that this is something that should have already been done.

“This is a long overdue step, yet there is still more work to do to eliminate Albany’s red tape that hampers broadband buildout in rural communities,” Rep. Stefanik said. “I will continue pushing for results until every family in Upstate New York and the North Country can access affordable high-speed internet from their homes, schools and businesses.”

The state Department of Transportation started charging fees to fiber optic line installers who build lines in a state-controlled highway right-of-way after the 2019-20 state budget contained language that enacted a right-of-way tax or use and occupancy fee. The DOT had required installers to enter annual fee-bearing permits to charge corporations per foot, per cable, for fiber optic lines they own.

Under the DOT fee, the Development Authority of the North Country had to pay about $2,000 per mile for a total of $1.6 million on its roughly 830 miles of existing owned fiber, Laurie Marr, DANC director of communications and public affairs, told the Watertown Daily Times in 2020 after the fee was enacted. The $1.6 million was about 25% of the network’s annual projected, generated revenue.

DANC halted outstanding fiber installation projects after the organization first received DOT invoices for the new fee in January 2020.

DANC officials in October said the fees are essentially a tax on state grant money, as the DANC network has largely been built using state grant money.

Walczyk said he has met with broadband companies, local governments and constituents in what he called the “underserved parts of the 116th Assembly District.” He backed repealing the fiber-optic fee in the Assembly, with Sen. Daniel G. Stec, R-Queensbury, co-sponsoring the measure in the Senate.

Walczyk said the tax has prevented broadband projects from happening. He said that once the budget is signed into law, projects could be ready this spring.


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