The California Public Utilities Commission will put $150 million on the table for Internet service providers to add to their budgets as they bid in a reverse auction for federal Rural Digital Opportunity Fund (RDOF) subsidies, if a plan proposed by staff is eventually approved by commissioners. Some of the details of that plan were released earlier this month, and a list of census block groups that will be eligible for “kickers” from the California Advanced Services Fund (CASF) was posted late on Friday. More details, including how much CASF money will be available in each of those census block groups, is expected soon, perhaps later today.
A more important question, though, is how much money is left in CASF? Shortfalls over the past three years mean the loss of $77 million that might have gone towards broadband upgrades for unserved Californians. The problem is that the broadband penny is being collected on the in-state voice telephone service dollar, which is a dying business.
The tax that pays for CASF will double for the next two years, from about half a cent on the dollar, to a little more than a penny on the dollar. The CPUC voted unanimously on Thursday to raise the rate and, it hopes, collect the maximum amount for CASF that was authorised by the California legislature for 2021 and 2022. But that won’t make up for past deficits.
CPUC commission Martha Guzman Aceves told her fellow commissioners the way California pays for broadband infrastructure subsides and similar programs must change…
Over the past few years we’ve really acknowledged that the commission has been seeing negative repercussions from having the type of surcharge structure that we have, which is a voice-based surcharge collection, to fund our public purpose programs…Not only has it been declining rapidly for legitimate reasons on why – people are using more data, or texting, or using applications like the one we’re on today, social media, etcetera. But in addition to the revenue being voice based, the determination of how much of it is voice versus data is determined by the carriers themselves. So it’s a declining source of revenue, and it’s a volatile source…
Even with this resolution, to adjust the revenue, to…adjust the formula, we’re going to end up being – at minimum – over $77 million of under collection for the California Advanced Services Fund. That means that even though the legislature authorised us to collect over $330 million…we will only attain, at the most, $252 [million]. This is a huge problem…
I just wanted to really reiterate this need for surcharge reform and we need to really stabilise the revenue for these public purpose programs so we don’t fall short of the goals that the legislature has actually set forth for us to meet. So I really look forward to working with the legislature this year to attain those reforms.
There’s still a chance that governor Gavin Newsom will call the legislature back into session to specifically address California’s broadband gap, but hope is fading as the election nears. But the newly elected legislature will begin its work in December. Broadband advocates intend to pick up where they left off in August, after monopoly model incumbents and their lavishly compensated friends in the legislature beat down an attempt to raise California’s broadband standard to modern levels.