Verizon Eyes NY State for Major Data Center

Verizon Communications is considering Somerset, N.Y. as the site of major data center that could bring up to $500 million in investment. The huge telecom company is in negotiations to acquire a 160-acre piece of land on the shores of Lake Ontario.

“We do have interest in this parcel,” Verizon spokesperson John Bonomo told local media. “We are considering other sites in other states as well."

Local officials in the Buffalo region have been working to land Verizon, but have maintained secrecy about the identity of the prospect, using the code name "Project Oasis" to refer to the development.

New Neighbor for Yahoo?
The Somerset site is approximately 20 miles from Lockport, N.Y., where Yahoo is nearing completion on the first phase of its newest data center, which employs an energy-efficient design known as the Yahoo Computing Coop.

The region offers several advantages to data center operators, including the ability to use fresh-air cooling (free cooling) virtually year round, along with the availability of hydro-electric power from the Niagara River.

Local officials have said the new data center project would employ 150 to 200 people, and could involve up to three buildings at the site, located adjacent to an energy plant operated by AES.

Potential Legislative Barrier
The key potential holdup may be a proposed bill in the N.Y. State Senate that would increase scrutiny of telecom industry mergers and "require a portion of the benefits of telecommunications mergers to be returned to the state's ratepayers" as refunds or investments in infrastructure. Verizon says the measure could force it to return up to 40 percent of proceeds from asset sales to ratepayers.

Verizon's Bonomo told the Lockport Union Sun & Journal that passage of the bill "would make it very difficult for us to conduct business in the state.”