California-style regulation can kill or cure broadband, study says

by Steve Blum • , ,

Reducing regulatory complexity, uncertainty and reach is the key to improving California’s broadband infrastructure, according to a report published by the Bay Area Council Economic Institute. The study assessed the telecommunications and energy infrastructure necessary to successfully competing in a 21st century economy, and the steps needed to get it.

The focus of the telecoms recommendations was regulation, both at the local planning and permitting level and by the California Public Utilities Commission. Environmental regulations were singled out as a particular barrier…

The California Environmental Quality Act (CEQA) is considered another cost and delay factor in any infrastructure development that involves trenching or surface disturbance. CEQA compliance processes can take years, often the result of legal challenges and local opposition to the project. “Many fine California city proposals for the Google Fiber project were ultimately passed over in part because of the regulatory complexity here brought about by CEQA and other rules,” said Milo Medin, Google’s Vice President of Access Services, following the company’s decision to launch its service in Kansas City.

Another area of concern is the extent and focus of the CPUC’s oversight efforts. On the one hand, mandates to continue Plain Old Telephone service conflict with efforts to upgrade networks, according to the study. On the other, future regulation of broadband or, particularly, voice over Internet protocol phone service beyond what the Federal Communications Commission does at the national level could put California at a competitive disadvantage: higher regulatory costs would make the state less attractive as an investment proposition.

I was on the institute’s task group that looked at basic telecoms infrastructure, and generally agree with the study’s conclusions. Except its rosy view of competition in California’s broadband ecosystem: the establishment of a telco/cable broadband duopoly in urban and suburban areas means less choice, not more, and even that model fails in rural parts of the state. There’s a difference between competition-killing regulation and the not-so-benign neglect that facilitates state-sanctioned monopolies.