More telco perks added to $300 million broadband subsidy bill as California senate vote nears

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Incumbent telephone and cable companies convinced their friends in the California legislature to add another slab of pork to a broadband subsidy bill, as the senate prepares to vote on it. Assembly bill 1665 started out as a telco-centric bill, and subsequent amendments, including the the ones added on Friday, have made it even more one-sided – in most areas of the state, it will be impossible for independent broadband projects to qualify for support from the California Advanced Services Fund (CASF).

Two assembly members have taken their names off of the bill. Mark Stone (D – Santa Cruz) and Marc Levine (D – San Rafael) were co-authors, but they both withdrew their support as the gifts to telephone and cable companies became more blatant and local opposition grew in their districts.

AB 1665 reinstates a tax on telephone bills, and pumps $300 million into CASF for infrastructure grants. But it re-writes the rules of the program, lowering the minimum acceptable broadband speed to 6 Mbps download and 1 Mbps upload. If you have service available at that level, then your community isn’t eligible for broadband upgrade grants. But even if you don’t, the money won’t be coming to your town, except by way of your incumbent telephone company.

The bill also allows AT&T and Frontier Communications to reserve areas based on 1. promises of future upgrades and 2. acceptance of federal subsidy money. They would be able to apply for CASF grants in those otherwise eligible areas, but independent projects would be out of luck. AT&T and Frontier will be free to game the system and pocket most of the $300 million in return for providing service that doesn’t meet California’s current minimum standard of 6 Mbps down/1.5 Mbps up, if they so choose.

The amendments added to AB 1665 on Friday reinforce those privileges, among other things explicitly excluding areas where AT&T and Frontier are receiving federal subsidies.

Cable companies get some perks too. They’ll be able to launder grant money through their customers, and avoid oversight by the California Public Utilities Commission. Cable lobbyists also tightened the screws on public housing communities, who will no longer be able to use CASF money to install WiFi equipment and offer free access if someone is selling broadband service at 6 Mbps down/1 Mbps up or better. Even if that service costs more than residents are supposed to be able to afford.

A vote could come as early as tomorrow in the senate. If it gets the necessary two-thirds majority, it’ll go back to the assembly for a concurrence vote on amendments.