SB 740 would add $90 million to the California Advanced Services Fund (CASF) and make it possible – although maybe not practical – for independent Internet service providers and cities to apply for grants and loans to build out broadband infrastructure. Assuming a companion measure, assembly bill 1299 moves forward too, $70 million would be added to the broadband infrastructure grant kitty and $25 million would go towards broadband facilities and marketing in public housing projects, with the $5 million difference being made up via the lesser used infrastructure loan fund.
Looking ahead to the next two weeks, SB 740 needs to be approved by a two-thirds vote of the assembly, which is by no means guaranteed, then it goes back to the senate, which has to agree to recent amendments. The senate voted nearly unanimously to back it earlier this year, but that was before a nasty fight with cable lobbyists erupted, forcing the changes.
Assuming it moves all the way through the process before the 13 September 2013 deadline, it would then go to Governor Brown’s desk. He’d have a month to decide whether or not to veto it.
Update: AB 1299 made it out of the senate appropriations committee’s suspense file too, and will head to a vote of the full senate. If approved there (it only needs a majority vote to make it), it’ll go back to the assembly for concurrence in the senate’s amendments.
It’s a procedural limbo that was originally created to allow lawmakers to delay significant spending or tax bills until after the state budget is approved. It’s evolved into a mechanism that allows legislative leaders to pick which bills move forward and which don’t. Leaders, including appropriations committee members, will allow some bills to move forward to a vote by the full assembly, probably next Thursday. The rest will be dead for this year, although some might be considered again next year.
It’s a chance to kill the bills behind closed doors, with no one except Sacramento insiders knowing how or why. It was a struggle to get SB 740 approved by the assembly utilities and commerce committee because of some nasty opposition tactics used by the cable industry. In theory, cable lobbyists backed off, saying they were neutral regarding the bill after crippling changes were made. But they would be even happier if it died completely.
If you’re interested, either way, you can contact members of the assembly and senate appropriations committees, and let them know what you think.
The amount of money available to the current round of California Advanced Services Fund (CASF) infrastructure grant applicants is probably something like $135 million, considerably less than the $148 million I’ve been estimating. The California Public Utilities Commission (CPUC) has published the proposed budget for the California Advanced Services Fund (CASF) for next fiscal year, which runs from July 2014 to June 2015. It shows a sharp increase in overhead costs for running the program, including an extra $1.5 million for the state’s broadband mapping project.
Earlier this year, I estimated – too optimistically – that there was $158 million or so available for CASF infrastructure grants. Deducting the $10 million that might be given to the Digital 395 project next month leaves $148 million. That’s based on the original $200 million infrastructure grant kitty, less approved grants (about $41 million) plus rescinded grants and project cost savings. And less previously published overhead costs, which totalled about $2.5 million as of last December.
The proposed budget released today pegs total CASF overhead costs at $3.6 million for next fiscal year alone, $2.9 million of which will come out of the infrastructure grant kitty. The staff workload has increased because of the new consortia program and the three dozen or so infrastructure grant applications submitted over the past year, so it’s not unreasonable to assume the new numbers are in line with the latest run rate.
Assuming then, in round numbers, that 1. the overhead costs charged to the infrastructure grant kitty are running at the rate of about $1.6 million a year now, 2. will jump to $2.9 million starting next July and 3. admin costs are likelier to go up than down, the total hit from January 2013 through June 2015 will be in the $5 million to $6 million range. If the CPUC takes the prudent course and earmarks overhead money for a year or two more – there could be dozens of grants to manage in that time – $10 million total isn’t unreasonable and it could go higher depending on how many more years it’ll take to finish those projects off.
Throwing everything on the table – previous expenditures, existing and assumed budgets, the Digital 395 spiff – and discounting my previous optimism, $135 million is my new estimate. That’s against $222 million in published requests.
Two bills that, together, will make significant changes to the way the California Advanced Services Fund (CASF) operates face an uncertain future in the California legislature. Both are alive following Monday’s vote by the assembly utilities and commerce committee, but now need the blessing of key legislators to keep moving toward final approval.
Senate bill 740 adds $90 million to CASF and allows independent ISPs and cities to apply for broadband infrastructure subsidies. Assembly bill 1299 spends $25 million of that on wiring public housing projects and convincing residents to sign up for service. The bills are linked and will move (or not) through the rest of the legislative process more or less in parallel.
Not much is expected to happen in the next couple of weeks. The senate appropriations committee has AB 1299 on hold and the assembly appropriations committee will do the same with SB 740. It’s an arcane process, but in effect senate and assembly leaders will decide – probably around August 29th – whether the two bills will move forward into the legislative scrum of the final two weeks of this year’s session. If they give the green light, the full senate and assembly have to agree on final language and, by a two-thirds vote, send the bills to Governor Brown, who can exercise his veto power if he chooses.
Over the past few months, the bills have been re-written several times in order to placate cable and telephone companies. Cable lobbyists withdrew their opposition to SB 740 last week, but are by no means endorsing it and clearly would be happier if it died quietly in the appropriations committee. Supporters, led by the California Emerging Technology Fund (and including me), will continue to lobby for it.
The first, and most important, choice committee members will make is to vote with their feet. Eight, out of a total of fifteen, have to show up. Less than that, and nothing happens. Then, eight members have to agree to reconsider last month’s defeat of SB 740. Anticlimactically, the final vote is to actually send the bill on towards the assembly floor.
An absence or abstention is the same as a no vote. It was the abstainers who killed SB 740 in July. Cowed or confused by the outright lies shovelled on them by cable lobbyists, seven members, mostly democrats, sat silent when their names were called. Five democrats on the committee voted aye and three republicans voted no, leaving the bill three votes short.
The bill’s author, senator Alex Padilla (D – Los Angeles), negotiated new language last week that all but bars independent ISPs and local governments from applying for grants and loans to build broadband infrastructure. That won him a grudging letter from the California cable industry’s lobbying front, which withdrew formal opposition but explicitly refused to endorse the bill. At least they came through with the letter. As the deal was understood, Comcast and Verizon were supposed to send similar letters, but I haven’t seen any such or talked with anyone who has.
At last word, two legislators who sat silent have been convinced to join the aye camp, and others might be leaning in that direction. On the other hand, the analysis prepared on behalf of republican members recommends a no vote. It’ll be a cliffhanger. I’ll be at the meeting and will post results as votes are taken. You can also listen live via the assembly’s Internet audio feed.
There’s good news, good news and bad news in the latest version of senate bill 740, which renews and rewrites the rules for the California Advanced Services Fund (CASF). Under a deal cut yesterday, Comcast and a lobbying organisation for the cable industry in California said they would drop their opposition to the bill in exchange for tougher restrictions on how broadband subsidy funds can be spent.
It’s good news that an extra $90 million is going into CASF. If a parallel measure, assembly bill 1299 also passes, the net result will be an extra $70 million for broadband infrastructure grants, $5 million less for loans and $25 million for a new public housing broadband program. Not surprisingly, grants are more popular, so the haircut to the loan account isn’t likely to matter in the next couple of years.
It’s more good news that there’s little loss to the CASF broadband infrastructure program as it stands now. With one exception, the new restrictions don’t apply to regulated telephone companies, which are currently eligible for subsidies. The exception is that the new law limits the California Public Utilities Commission’s ability to make future changes by carving into legal stone its existing policy regarding challenges to coverage claims and priority for last mile projects and unserved areas.
The bad news is that there’s little realistic hope that independent ISPs or local governments will be able to qualify for funding. The price for getting cable lobbyists to back off was an impenetrable web of restrictive rules that offer few opportunities for non-traditional applicants to apply, and high hurdles when they do. It’s more than they have now, but not much.
The new language has to be approved by the assembly utilities and commerce committee, which confirmed today that it’ll vote on it come Monday. No word on whether holdouts on the committee have changed their mind but Carolyn McIntyre, the cable industry lobbyist, did keep her promise to send them a letter withdrawing her opposition. No confirmation yet that Comcast has done likewise, or that Verizon has joined the love fest.
A couple of apartments are enough to make cable companies lose their taste for monopoly.
Public housing agencies stand between residents and cable television companies. Like any other landlord in California, a public housing agency has considerable (but not total) control over who can install wiring in a building or complex, and consequently who can sell television, telephone and Internet service to residents.
That control is about to be trimmed back a notch.
Assembly bill 1299 proposes to use $20 million from the California Advanced Services Fund (CASF) to improve broadband infrastructure in public housing, plus another $5 million to encourage residents to buy service, assuming lawmakers also add more money to the account. To have a hope of ever applying for that money, a public housing operator has to…
verify to the [California Public Utilities Commission] that the publicly supported housing community has not denied a right of access to any broadband provider that is willing to connect a broadband network to the facility for which the grant or loan is sought.
Which might be good news for the future of CASF. It was a lobbyist for California’s cable industry, along with a hired gun for Comcast, who shot down senate bill 740, which would top up the fund and allow independent ISPs and cities to apply for grants and loans.
Assuming AB 1299 isn’t changed again (a big assumption), the cable industry’s right of access language won’t have any teeth unless SB 740 passes too. Nor will any of the $5 million in marketing money flow its way.
Maybe the next time SB 740’s author, senator Alex Padilla (D – Los Angeles), offers cable lobbyists a compromise, they won’t ignore him. Like the last time.
Google Fiber’s offer in Kansas City of at least 5 Mbps Internet service for at least seven years for a one-time $300 installation fee is a rocking good deal if you own a house, or even if you’re a renter who expects to be around for a couple of years. But the economics are different for apartment buildings, where landlords have to pay the fee and tenants get the free service.
According to a story in the Kansas City Star, some apartment owners are taking a pass on the offer. Google is willing to either connect all the units at a location, for $300 each, or none of them. The owner of a 100 unit apartment complex would pay $30,000 to get renters connected. If residents buy premium services – gigabit access at $70 a month or $120 with TV service added – Google will refund the installation fee at the rate of $25 a month. If.
There’s a huge helping of hardball negotiating involved. Property managers are not going to take the first offer Google puts on the table, at least not until they’re convinced it really is take it or leave it. Even then, some might want to hang on to perks offered by competing carriers for access to tenants.
It’s easy to paint landlords as greedy and short-sighted, but the vast majority are economically rational. Once they’re convinced they’re seeing Google’s best offer, the ones who see a sufficiently high return on investment will sign up. The others – a group sure to be weighted towards lower cost and public housing – will not.
Doesn’t matter how many buckets you have if the well runs dry.
The officially amended version of a bill aimed at improving Internet access and increasing its use in public housing projects has been released, and its good news for broadband infrastructure in California.
Assembly bill 1299 would set aside $25 million from the California Advanced Services Fund (CASF) to wire public housing units and pay for marketing programs to encourage residents to sign up for service. It was up for consideration last week in a California senate committee, the day after an assembly committee killed a proposal to add $90 million to CASF. Several amendments were put on the table; committee members generally hand-waved them through without much discussion, before the actual language was written.
Now it’s down on paper. As it currently stands, AB 1299 is very clear: no money for public housing purposes unless more money is put into CASF. That’s a big change from the previous version of the bill.
Current law limits CASF to a grand total of $225 million, which includes a $15 million revolving loan fund and $10 million for regional broadband consortia. The rest goes to broadband infrastructure grants in unserved and underserved areas of California. If there’s any money left after the current round of grant applications is finished, and there might well be, it’ll still be earmarked for that purpose.
The goal isn’t to keep money away from anyone. The goal is to keep CASF in business so it can be expanded to cover public housing as well as rural broadband projects. There’s more incentive now for assembly committee members to take a second look at topping up CASF. They’ll have that chance in August.
A proposal to extend funding and eligibility for broadband infrastructure subsidies might get a second chance in the California assembly. Senate bill 740 failed to get enough “yes” votes in the assembly utilities and commerce committee on Monday. Contrary to what was thought at time, there is enough slack in the legislative schedule to take another try at getting the committee’s approval.
The actual deadline for the utilities and commerce committee to send SB 740 on its way to be considered by the full assembly is 16 August 2013. The assembly adjourned today for its month long summer recess, and is scheduled to return to business on 5 August. That gives members two full working weeks to finish up committee work for the year.
Senator Alex Padilla (D – Los Angeles) sponsored SB 740, and successfully guided it through the California senate in May. Assuming the assembly utilities and commerce committee meets again as expected, he will ask members to reconsider the bill.
It’s also possible that parts of the bill will be rewritten to address some of the cable industry’s concerns, although Padilla already offered to make some on the spot changes during the committee hearing. Lobbyists for Comcast and the California Cable and Telecommunications Association ignored him then and, with a win already under their belts, they have even less incentive to negotiate now.