The Federal Communications Commission yesterday voted to give up to $170 million in broadband funding to New York to support a state program that will boost deployment in unserved rural areas.

The money was available because Verizon turned it down. It comes from the Connect America Fund, which draws from surcharges on Americans' phone bills to pay for rural Internet service. Typically, the FCC distributes this funding to specific ISPs, and the ISPs that accept the money must use it to provide home Internet service with at least 10Mbps download speeds and 1Mbps upload speeds. Verizon declined the funding in 2015.

Overall, Verizon would have received $28.4 million annually over six years in New York. The state might still have received some of the money absent yesterday's vote because the FCC always planned to distribute declined subsidies in a competitive bidding process. But New York petitioned the FCC to waive Connect America Fund rules so that the state could add the money to its own broadband reverse auction and achieve "significant cost efficiencies and financial synergies that are not available absent the waiver." New York also said that the FCC's competitive bidding rules "could result in New York receiving very little, or conceptually even none, of the funding originally offered to Verizon in the State."

Moreover, New York's auction would provide faster broadband than the FCC's process—and do it on a shorter timeline. New York is requiring ISPs that receive funding to provide download speeds of 100Mbps in most areas and 25Mbps in very remote areas. Instead of giving ISPs six years to finish construction, New York is requiring funded networks to be completed by the end of 2018.

The FCC granted New York's petition in its first major action under Chairman Ajit Pai, who had pledged to close the country's "digital divide."

“Broadband is critical to economic opportunity and job creation,” said Pai, a Republican who was named chairman by President Donald Trump. "This is a first step of many to fulfill my promise to empower Americans with online opportunities, no matter who they are and no matter where they live.”

A press release yesterday from New York Governor Andrew Cuomo said that previously, "The Federal Communications Commission wanted to take this unused money from New York and bid it out nationally." Cuomo, US Sen. Chuck Schumer (D-N.Y.), and US Rep. Chris Collins (R-N.Y.) lobbied the FCC to give all of it to New York.

"We have tirelessly fought to keep this money in New York State, and I am excited for Western New Yorkers that the FCC listened," US Rep. Chris Collins (R-N.Y.) said.

The FCC order gained support from all three commissioners, including Democrat Mignon Clyburn and Republican Michael O'Rielly. O'Rielly dissented in part, saying that the FCC did not receive sufficient assurances that New York won't "overpay for deployment in some areas... leaving other areas without service."

New York's reverse auction will combine the $170 million with at least $200 million in state funding. The auction will award funding to ISPs who can deploy broadband at the lowest cost and is part of a New York plan to provide high-speed Internet to all state residents by the end of 2018.

Though Verizon turned down Connect America funding, AT&T and nine other carriers in 2015 accepted a total of $1.5 billion in annual support over six years to serve 3.6 million homes and businesses nationwide. Officials in Massachusetts and Pennsylvania urged the FCC to release funding to states in cases where it was declined by carriers. But while Massachusetts and Pennsylvania officials filed comments on the New York petition, neither state has actually filed a petition of its own, an FCC spokesperson told Ars. For now, then, New York is the only state receiving the funding that Verizon declined.