California broadband subsidy amendments protect telcos’ bad rural service

by Steve Blum • , , ,

Get used to it.

AT&T, Frontier Communications and cable companies would be able to freeze broadband development in unserved areas of California and get priority access to broadband subsidy money, under the terms of a newly amended bill to reinstate a tax on phone bills and use the money to top up the California Advanced Services Fund (CASF). The latest version of assembly bill 1665 tracks with a draft circulated last week and is designed to freeze out independent broadband infrastructure projects.

It would create a top down planning process that would first identify communities that are eligible for broadband infrastructure grants, and then give the incumbent telephone and/or cable companies a chance to claim those areas simply by saying they’ll upgrade it in the future. There’s nothing in the legislation that would require incumbents to actually complete the builds, nor any kind of deadline for doing so. All the latest draft of AB 1665 calls for is a willingness to do so within a “reasonable timeframe”, which could be several years in the future, as allowed by the bill.

In the meantime, only incumbents would be eligible to apply for CASF infrastructure subsidies in those areas.

And AB 1665 would still lower California’s standard for acceptable Internet speeds from 6 Mbps down/1.5 Mbps up to 6 Mbps down/1 Mbps up. That might look like a minor change, but it makes a big difference in terms of technology. Dropping the upload minimum by half a meg protects the legacy, 1990s DSL systems and service levels that AT&T and Frontier maintain in much of rural California.

Other perks that cable and telco lobbyists snaked into the bill include language that would effectively kill independent middle mile projects and the ability to tap CASF money to pay for operating costs.

This latest version of the bill is due for a hearing in front of the senate energy, utilities and communication committee on Monday. Any additional gifts to incumbents that the senate adds would have to go back to the assembly for concurrence, but given the lopsided vote to approve the first version of AB 1665, that’s not looking like much of a hurdle.