California legislature votes more perks for cable and telephone companies

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It’s on the house. Both houses, actually.

The California Assembly approved using broadband construction subsidy funds to pay for marketing programs and infrastructure in public housing yesterday. The votes was 58 yes and 17 no for assembly bill 1299, which means it heads over to the Senate for further consideration later this summer.

AB1299 earmarks $20 million from the California Advanced Services Fund (CASF) for building out broadband infrastructure in public housing projects and another $5 million for programs designed to encourage residents to buy service. Both provisions were endorsed by public housing providers and lobbyists for cable and telephone companies, who don’t mind getting subsidised help selling their television and Internet services.

The cable industry’s lobbying arm in Sacramento also pushed for, and got, language that requires public housing agencies to first open their doors to cable companies that want to wire buildings. Under current practice, a cable company usually needs permission from a building owner, public or private, to install facilities. This bargaining power is frequently used to leverage concessions from service providers in exchange for exclusivity. The practical effect of this proposed change would be to decrease competition by giving incumbent cable companies a right of first refusal on public housing broadband projects.

Six republicans joined the democratic majority in voting for AB1299. The day before, a nearly unanimous vote in the state senate sent SB740 over to the assembly. Largely re-written at the behest of cable and telco lobbyists too, that measure puts more restrictions on CASF, which would make it harder to fund would-be competitors, and caps funding – there’s about $158 million currently available. AB1299 would take another $25 million off the table.

CASF was intended to improve broadband availability in California. Two votes on two consecutive days in the legislature could have the opposite effect, giving incumbents reason to maintain the status quo rather than incentives to build infrastructure.

About Steve Blum

Steve Blum is president of Tellus Venture Associates, a management, planning and business development consultancy for municipal and community broadband initiatives. He is a 30-year industry veteran and an expert in developing new broadband infrastructure and services, including wireless, fiber optic and satellite systems. His career includes playing key roles in the launch and growth of DirecTv in the U.S., as well as other satellite broadcasting platforms around the world. For the past ten years, he has helped build municipal wireless and fiber optic broadband systems. His client list includes many California cities, such as San Leandro, Palo Alto, Oakland, Los Angeles, Lompoc and Folsom. He’s a member of the executive team for the Central Coast Broadband Consortium and has worked with other regional consortia in California. Steve is the author of seven books on the Internet and satellite broadcasting and is a frequent contributor to professional journals and industry events. He holds an A.B. in History from the University of California, Berkeley, an M.A. in East Asia Studies from the University of Washington, and an M.B.A. from the University of St. Thomas. He is a triathlete and multiple Ironman finisher, and is currently ranked in the top 100 of the Challenge Triathlon world rankings, out of more than 30,000 athletes.