New York nixes Internet Master Plan based on new fiber

New York Mayor Eric Adams has suspended the city’s Internet Master Plan, creating uncertainty for New Yorkers waiting for fiber broadband and also for the vendors tapped to deploy fiber and deliver service.

T-Mobile, Starry and Flume were among the 12 companies named by former New York mayor Bill de Blasio when he announced the $157 million plan in 2021. At that time, de Blasio said the plan would incentivize high-quality affordable internet at scale and help reverse New York’s digital divide. He wanted to let providers use city-owned real estate to deploy infrastructure and offer service to New Yorkers at discounted rates.

Mayor Adams, who was sworn in a year ago, has apparently shifted the city’s focus to subsidizing end users of internet services, and to educating people about the availability of broadband.

“The city has paused plans to build unified infrastructure,” said Flume co-founder and CEO Prashanth Vijay. “So there are no subsidies for infrastructure, but there are subsidized rates, just for Spectrum and Optimum.” Spectrum and Optimum, owned by Charter and Altice respectively, are two of the nation’s largest cable companies and internet service providers.

“The people who get the subsidies have to have cable service,” said Vijay. He said the subsidies New York is making available now are not accessible to Flume or to the other startups that expected to be part of the city’s Internet Master Plan.

“We were in Phase 2 of an RFP for unified communications infrastructure, and that was essentially nixed midway through the year,” said Vijay. “We had a cost effective way to bring in competition.”

Flume, which launched in late 2020 with the goal of connecting at least 600,000 New Yorkers, leverages existing fiber and provides subscribers with last mile connections and customer premise equipment. The company operates in Connecticut and Southern California as well as in New York.

Vijay described New York’s change in plans as “a little messy,” but said he is still hopeful the city will eventually invest in extending fiber to unserved homes.

For now, the city’s leaders seem focused on making sure more people who have access to broadband can afford to purchase it. The city’s Office of Technology and Innovation is subsidizing up to 100% of the cost of internet for residents of select New York City Housing Authority buildings in all five boroughs.

Vijay said that in the New York buildings Flume has connected so far, about 10% of the residents purchase Flume’s service. The company currently has roughly 600 active accounts in New York, he said, adding that 120 of those homes are connecting to the internet for the first time.

New York’s suspension of its Internet Master Plan does not mean the city has stopped investing in communications infrastructure. New York has announced no plans to cancel its LinkNYC fiber-connected 5G kiosks throughout the city. ZenFi Networks, which is supplying fiber to the LinkNYC kiosks, said its work is continuing and is not dependent on the Internet Master Plan.

New York’s public libraries have their own plans for neighborhood connectivity: fixed wireless access using CBRS. The libraries have secured grants totaling at least $1.5 million and have trialed CBRS access points made by Celona, Baicells and Motorola. The systems integrator for the library projects is Sky Packets, a company that was also named as a vendor in the now-defunct Internet Master Plan. 

“What New York public libraries are doing with private wireless is truly remarkable given all the challenges a noisy wireless environment like New York presents,” said David Callisch, marketing director at Celona. 

New York is also noisy from a political perspective, and that’s the noise that is likely drowning out some of the city’s potential last-mile fiber investment, at least for now. 

“I’m investing on a 10-15 year timeline,” said Flume’s Vijay. “Changes in administration do not give us confidence.”