Bills to extend CASF introduced in California legislature

24 February 2013 by Steve Blum
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Pork is in the eye of the beholder.

Two bills proposing three changes to the California Advanced Services Fund (CASF) made it into the legislative sausage grinder by Friday’s deadline. The changes could be good or bad, depending on your point of view.

Senator Alex Padilla, a Democrat representing the San Fernando Valley, introduced SB740, which would 1. add $100 million to the fund and allow five more years to collect it, and 2. give the California Public Utilities Commission (CPUC) leeway to give grants and loans to a wider range of organizations. The program would remain focused on broadband infrastructure construction.

Right now, CASF subsidies are limited to regulated, private sector telephone companies. And it will probably run out of money long before Californians run out of broadband infrastructure projects. The CPUC is evaluating about $250 million in proposals submitted earlier this month. But it only has about $150 million to give out over the next three years.

The second bill, AB1299, was introduced by Assemblyman Steven Bradford, also a Democrat from the L.A. area. He wants to broaden the scope of CASF.

CASF’s mission, according to current law, is to “encourage deployment of high-quality advanced communications services to all Californians”. Bradford would leave that language as is, but add special instructions to the CPUC to “encourage deployment and adoption” in “publicly supported housing communities in urban regions”.

That’s a whole different ballgame. Encouraging adoption could mean paying for things like classes, computer centers and even subsidized subscriptions. Worthy as these things might be, adding them to the CASF mix would take money away from paying the capital cost of new broadband infrastructure and redirect it to subsidizing the operating expenses of social programs and marketing campaigns.

The current language doesn’t exclude public housing, although restricting grants to regulated phone companies reduces the likelihood of such proposals. SB740 fixes that problem. AB1299, however, sends CASF off in a completely new direction.

Tellus Venture Associates assisted with several CASF proposals in the current round. I’m not a disinterested commentator. Take it for what it’s worth.