Broadband subsidy grab by telcos, cable faces budget scrutiny in Sacramento

by Steve Blum • , , ,

The attempt to turn the California Advanced Services Fund – the state’s primary broadband infrastructure subsidy program – into a piggy bank for AT&T, Frontier and cable companies gets another hearing at the capitol today. Assembly bill 1665 will go before the assembly appropriations committee, which has responsibility for seeing that bills that raise money – in this case, reinstate a tax – and spend it are based on sound fiscal policy, both in isolation and in the context of California’s overall budget.

The legislative analysis prepared for the committee ignores several of the bill’s fatal flaws. It doesn’t mention the fact that AB 1665 would lower California’s minimum broadband speed standard to 6 Mbps down/1 Mbps up, or that it would give AT&T and Frontier Communications a protected monopoly in most of rural California, where they would not be required to upgrade service to even that level in many places.

Nor does it address the elimination of the public housing broadband facilities fund. That program is mostly used to provide free or very low cost WiFi service to people who live in public housing communities. Which seems like an innocuous enough enterprise, but it sends cable companies ballistic because it might – just might – put a dent in the revenue streams they generate from the expensive, video-heavy packages they like to sell to lower income customers.

Today’s hearing will, in all likelihood, be for show and not for go. Typically, when this kind of bill hits an appropriations committee – in either the assembly or senate – it’s shuffled into a legislative limbo known as the suspense file. It’ll sit there until the full state budget is finalised, and then legislative leaders will decide whether it will be one of lucky bills that gets sent on to a full floor vote.

It’s a bill crafted to meet the objections of cable and telephone companies that are determined to protect their monopolies at any cost. California’s lawmakers should reject it.