New York State has become the first state in the United States to impose a moratorium on the construction of large data centers. This move sparks debate regarding the impact of such facilities on the environment, energy, and economy, presenting a significant challenge for artificial intelligence (AI) companies.
Governor Kathy Hochul signed an executive order that suspends the issuance of environmental permits for new large-scale data centers for up to one year. According to the governor, this period is necessary for government agencies to develop regulations aimed at protecting the power grid, natural resources, and local communities hosting these projects.
Hochul stated in her announcement: 'Because the development of data centers threatens to increase utility bills, deplete our natural resources, and create uncertainty for New Yorkers, I have a responsibility to act and lead this movement.' She also emphasized that 'New York will lead the creation of the strictest standards in the country for data center development, ensuring that when New York businesses thrive, so do New York residents.'
The practical impact of this measure has not yet been fully determined. Although New York has fewer data centers than states like Virginia and Texas, many planned projects had already generated conflicts with local residents. The moratorium signals an escalation of opposition between the technology industry and political authorities, who are facing growing public concern over the consequences of the rapid growth of these installations and the economic changes driven by the AI systems they power.
According to a The Washington Post investigation, recent polls indicate that many Americans feel more comfortable having a nuclear power plant in their city than a data center. Even towns that have relied on these facilities for decades to supplement government revenue have begun to show resistance. A prime example is Northern Virginia, considered a global data center hub. Previous incentives offered by tech companies to gain public support, such as investments in schools and promises of infrastructure funding, have lost their appeal.
Furthermore, authorities in various parts of the US have begun advocating for a review of tax breaks granted to this sector. On Tuesday, Hochul also called on state legislators to repeal current sales tax exemptions provided to data centers.
The accelerated growth of data centers has intensified concerns about electricity consumption. These facilities require enormous amounts of energy, and the state grid is struggling to meet the rising demand. According to the Post, some data centers consume more electricity than entire major cities. Industry representatives and White House staff argue that restricting the expansion of data centers—and the power plants that supply them—could undermine U.S. leadership in the AI race against competing nations, as AI will be crucial not only for the global economy but also for the development of military systems.
Opposition to data centers is also growing at the local level. Dozens of municipalities have adopted their own restrictions, including Monterey Park in California (USA), where voters voted to permanently ban such installations. However, attempts to introduce moratoria at the state level have been less successful. In April, Maine Governor Janet Mills vetoed a similar bill, stating that the measure could jeopardize a project planned for an old factory site in the town of Jay, which enjoys local community support.
The growing resistance to data centers also poses a problem for the Donald Trump administration, which views AI expansion as a strategic component of its domestic agenda. According to Reuters, federal authorities are working to get energy companies to sign commitments to protect consumers during data center expansion, following a model previously established by leading tech companies.
Despite these commitments, concerns persist regarding the impact on electricity bills. Data center critics argue that the sector's promises are insufficient, pointing to instances where part of the costs associated with expanding the electrical infrastructure needed to service these facilities was passed on to other consumers. When residential electricity bills rose significantly last year for the network serving 13 states from Virginia to Michigan, an independent market monitor concluded that data centers were the primary cause of this increase.
This issue has also entered the political debate in this year's midterm elections. Among proponents of a national moratorium are Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez, who have introduced proposals for a temporary halt to the construction of new data centers nationwide. While studies yield conflicting results regarding the impact of these facilities on household rates, federal data shows that the cost of energy for residential consumers has risen faster than the expenses of commercial and industrial sectors in recent years. Meanwhile, some energy experts believe that large future projects could contribute to greater grid stability and even lower prices, provided there is a proper regional market structure.
The executive order signed by Hochul applies to data centers with energy consumption equal to or exceeding 50 megawatts. The goal is to provide legislators and regulatory bodies with a one-year period to implement regulatory changes and market adjustments that protect consumers and the electrical system. The governor's office stated it does not yet know how many projects will be directly affected by this measure. However, a report by Cleanview identified 25 proposed installations for New York State, including a 300-megawatt project planned near Ithaca, which is already facing local community opposition.
In June, the state legislature approved a bill providing for a one-year moratorium on large data centers, but the text had not yet been signed. According to Hochul's office, signing the executive order allowed the governor to enact the measure immediately while continuing the analysis of the legislative framework. For Micah Jones, director of policy and litigation at the environmental organization Food & Water Watch, this decision was a victory for groups that pressured government agencies. He stated: 'This is an important victory for thousands of New Yorkers who demanded that their government take action to suspend hyperscale data centers.'
Major telecommunications operators in South Africa are insisting that municipalities bear financial responsibility, including demands for compensation, if they delay the processing of applications for laying communication lines. The Association of Communications and Technology (ACT) stated this during public hearings by Icasa regarding the fast deployment regulations project in Midrand on Monday.
ACT, representing six of the country's largest network operators, proposed introducing a direct provision into the regulation allowing licensees to claim damages from the Icasa complaints and compliance committee if the delay is caused by the municipality. Furthermore, penalties are proposed for municipalities failing to adhere to established document processing deadlines.
This proposal was part of a five-point reform package presented by the industry organization at the hearings held at the Protea Hotel Marriott in Midrand on Monday and Tuesday. These hearings follow written comments on the draft regulations published on April 10, which showed near-unanimous industry criticism: the rules regulate licensees wishing to build but ignore the municipal permitting bottleneck that is actually hindering deployment.
The draft regulations aim to implement Chapter 4 of the Electronic Communications Act, creating a unified national framework for network deployment covering permits, land access, compensation, dispute resolution, and a national infrastructure GIS database. However, ACT stated at the hearings that without mandatory requirements for municipalities, these regulations do not fulfill Icasa's direct mandate under the Electronic Communications Act, and the goal of rapid deployment is unattainable.
A central element of ACT's proposal is the proposed approval mechanism. Municipalities must acknowledge a right-of-way application within five days and process it within a fixed 30 working days, providing written justification in case of refusal. If a decision is not made within the timeframe, it is deemed approved. The fee for the right of way should be limited to reasonable direct administrative costs for processing the application, ending the practice the association describes as using fees as a revenue source.
According to ACT's written submission, operators wait from six to twelve months for a right-of-way in some metropolitan areas, with costs ranging from R8,000 to 'hundreds of thousands of rand' per application, including arbitrary annual 'maintenance fees' for which no services are provided. In its own memorandum, Icasa points to inconsistent municipal right-of-way processes as the main recurring barrier to deployment.
ACT argued that this is not a regulatory novelty, as the EU Gigabit Infrastructure Act already provides for mandatory permit issuance timelines, tacit approval when authorities fail to meet deadlines, compensation for operators affected by delays, and limiting permit fees to administrative costs. South Africa, according to ACT, is simply adopting established international practice, not inventing it.
ACT also pointed out a structural flaw in the project's main GIS database component: a significant portion of South Africa's passive infrastructure—masts, towers, ducts, and poles—belongs to tower operators and passive infrastructure providers who are not always licensees and are therefore completely excluded from regulation. ACT noted that the database will present an incomplete picture of existing assets, and co-location and infrastructure sharing provisions will be undermined because the owners of the divisible infrastructure are outside the regulatory framework.
Regarding the database itself, ACT reiterated security concerns that dominated the written submissions: centralizing geo-referenced data on all fiber optic routes, ducts, towers, and base stations creates a serious national security risk in a country where infrastructure theft and sabotage are well-documented. ACT demands multi-level access control so that Icasa acts as the custodian within official data security policy, as well as extending the six-month implementation period to 12 months with phased rollout.
Other proposals include creating a single national digital platform for submitting and tracking right-of-way applications across all 257 South African municipalities; exemption for minor works requiring only five to seven working days' notice for aerial fiber optic connections and short duct extensions; requiring all new residential developments and substantially renovated buildings to include fiber-ready passive infrastructure; and introducing a progressive penalty system instead of a maximum fixed fine of R1 million, which, according to ACT, does not differentiate between a licensee that deliberately refuses to provide GIS data and one with a technical formatting error.
ACT also reiterated a warning about 'regulatory misalignment,' noting that the project appears to have been developed only considering the 2023 fast deployment policy direction, without accounting for Minister of Communications Solly Malatsi's 2026 policy draft, which mandates standardized municipal bylaws and is undergoing a parallel consultation process.
Telkom, Huawei, CAP, Rain, and the City of Cape Town—the only municipality on the schedule, and thus the only government voice in the industry's center of complaints—also spoke on Monday. Hearings continue on Tuesday with presentations from Digital Council Africa and the Internet Service Providers Association, MTN, Wireless Access Providers Association, Vodacom, and DigiV8. Notably, Maziv, the parent company of fiber operators Vumatel and Dark Fibre Africa, is absent from the schedule despite having submitted written comments on the draft regulations.
