Shift California’s broadband subsidies from consumer upgrades to paying incumbents to serve public agencies, CPUC told

by Steve Blum • , , ,

There’s an idea on the table to make it even easier for big, monopoly model broadband service providers to tap into the taxpayer-funded telecoms piggybank created by the California legislature when it approved assembly bill 1665 a couple of years ago. AB 1665 rewrote the rules for the state’s primary broadband infrastructure subsidy program, the California Advanced Services Fund (CASF).

The latest proposal to remake CASF surfaced at a panel discussion organised by the California Public Utilities Commission in Sacramento a couple of weeks ago. One of the panelists, Sunne McPeak, the CEO of AB 1665’s sponsor, the California Emerging Technology Fund (CETF), signaled that she wants to expand CASF to include, among other things, funding “public safety” projects.

On the face of it, that sounds like a wonderful thing, but it would be a radical change for CASF. It means flipping the fund from building infrastructure and increasing broadband availability for everyone to, in effect, subsidising ongoing operating expenses for public agencies. In other words, CASF would be absorbed into the state’s information technology budget, whether or not (likely, not) extra money was put into it.

Even if CASF money was strictly limited to paying for construction costs, it would act as an operating subsidy by offsetting upfront installation charges, which are paid out of public agency budgets, either all at once or over time. It’s a golden opportunity for companies like AT&T that can shift resources and facilities away from less profitable homes and small businesses, and toward more lucrative institutional services in rural areas where they maintain monopoly control.

A remote fire station or a county fairgrounds might get wicked fast broadband service – as it should – but it would be a zero sum game with the local economy ending up on the losing side. The better way to do it is to upgrade rural broadband infrastructure, particularly middle mile fiber, that serves everyone, public safety agencies and ordinary people alike.

It might or might not be too late to roll this gift to major incumbents into a bill during the current legislative session. The workings of the California legislature are more opaque this year, with greater power to decide the fate of bills given to committee chairs who can, and do, collect cash from politically generous cable and telephone companies. It’s possible to slip special benefits into existing bills, or create brand new ones via the gut and amend process, as the legislative session winds down to its September conclusion.

This year, next year or the year after: keep a close watch.