Tag Archives: ab1758

California broadband subsidy fund is maxed out

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The California Advanced Services Fund (CASF) is just about topped up. The fund is used to subsidise new infrastructure in areas that lack broadband service that meets the California Public Utilities Commission’s minimum standard of 6 Mbps download and 1.5 Mbps upload speeds. It’s also used to pay for broadband facilities and marketing programs in public housing and to fund regional broadband consortia.

The money for it comes from a tax that’s assessed on telephone bills – right now, it’s about one-half of one percent of the charges for in-state telecommunications services. (And yes, you can call it a surcharge. Or a fee. Many people do. But face it, it’s indistinguishable from a common sales tax).

By the end of November, the CPUC will have collected all the money – $315 million – that the California legislature has allowed. So the plan is to reduce the rate to zero percent, as of 30 November 2016.

Depending on assumptions made, particularly regarding administrative costs, there’s something like $120 million left in the infrastructure kitty, and a few million each in the public housing and consortia accounts. That’s against a total of $144 million of infrastructure grant applications in the hopper. However, when competing projects with overlapping service areas are factored out, the fund is about at breakeven. Maybe $3 million in the red, maybe $10 million to $20 million in the black, either way it’s circling the drain. Of course, some of those pending projects could end up being denied or, more likely, dying of old age due to year-long delays in processing.

An attempt earlier this year by assemblyman Mark Stone (D – Santa Cruz) to raise the ceiling on CASF collections failed in the face of opposition AT&T and the cable television industry’s lobbying front. The issue will be back on the table when a new legislative session begins next year.

Scraping up California legislature’s telecoms road kill

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The big impact telecoms legislation proposed so far in Sacramento this year is dead, the victim of opposition and inattention. That’s not to belittle the handful of telecoms bills awaiting action in August, but nothing that’s on the table right now would have the sweeping impact of some of the ones that didn’t make it.

Top of list was assembly bill 2395, a measure custom written by AT&T and carried by Evan Low, an accomodating assemblyman from Silicon Valley. It would have allowed AT&T to replace less lucrative landline systems in rural and inner city markets with wireless service, as well as getting the company out from under most of the California Public Utilities Commission’s regulatory purview. A storm of opposition, with AT&T’s unionised workforce at the center, stopped AB 2395 before it could get to a vote of the full assembly.

Mike Gatto, the chair of the assembly’s utilities and commerce committee, helped move the AB 2395 ball, as well as proposing another gift to big telecoms companies: AB 2788, which would have eliminated the already diminishingly small discretion cities and counties have over permits for cell towers and other wireless facilities. As a bonus, it would have also required them to lease municipal property to wireless companies. The bill popped up suddenly as a key deadline loomed, and then died just as quickly when it turned out that opponents weren’t napping.

Assembly bill 1758, by Mark Stone (D – Santa Cruz), was a plan to pump $350 million into the California Advanced Services Fund, to be used for building (mostly rural) broadband infrastructure, as well as funding (mostly urban) digital literacy programs run by non-profits and broadband facilities in public housing. AT&T and the cable industry’s lobbying front, the California Cable and Telecommunications Association, launched a two-pronged attack on it, convincing Gatto to block it in his committee and writing a competing bill that was introduced by another ally, assemblyman Bill Quirk (D – Hayward). AB 1758, and Quirk’s AB 2130, died in Gatto’s committee without a hearing.

Lawmakers will have the entire month of August to both work on existing bills and resurrect language from dead ones. A month is a long time in politics.

I’ve advocated for and helped to draft AB 1758 and its predecessors. I’m involved and proud of it. Take it for what it’s worth.

The week AT&T, cable lobbyists ran up the score in Sacramento

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It could have been a winning week (or two) for broadband infrastructure advocates in the California capitol, but instead last week turned into a victory march for AT&T and cable lobbyists as they fought to further entrench the cosy monopoly/duopoly conditions that underpin their business models. I’ve been blogging more or less on a play by play basis, but I think it’d be helpful to try to pull it briefly together.

It comes down to four key assembly bills, all of which landed in the assembly utilities and commerce committee over the past couple of weeks:

AB 1758 – an effort by Santa Cruz democrat Mark Stone to raise California’s broadband standard to 25 Mbps download and 3 Mbps upload speeds, and put $350 million into the California Advanced Services Fund (CASF) for infrastructure upgrade subsidies and a variety of other programs.

AB 2130 – a counter to Stone’s bill written by AT&T and carried by assemblyman Bill Quirk (D – Hayward), it would have ended ancillary CASF programs for public housing and regional consortia, added a new, $100 million infrastructure program rigged to highly favor incumbents and all but close the door to independent projects.

AB 2395 – Another AT&T-written bill, this one was fronted by Silicon Valley democrat Evan Low. A classic piece of obfuscation, the rhetoric focused on the geeky details of transitioning voice service from legacy analog systems to digital technology, which is something that most agree is necessary, albeit with different opinions regarding timing and other details. But it also includes language allowing AT&T to replace copper lines in rural and inner city areas with wireless-only service at will, and all but remove it from regulatory oversight.

ACA 11 – an amendment proposed by Mike Gatto (D – Los Angeles) that writes the California Public Utilities Commission out of the state constitution and puts utility regulatory decisions into the hands of the legislature. If it gets two-thirds approval in the assembly and senate, it goes on the November ballot for a vote.

AB 1758 died in committee due to lack of support, particularly from Gatto, who serves as chairman. AB 2130 followed into oblivion – with AB 1758 gone, there was no further need for it. AB 2395 and ACA 11 were both approved by lopsided majorities, and are headed to a second committee review, ahead of a vote by the full assembly.

The California assembly, or at least the utilities and commerce committee, is pointing in a clear direction: a smaller role for state government in telecoms regulation and subsidies. That would be wonderful if the result were likely to be a freer market with more innovation and competition. But that’s not the way to bet.

Incumbents, with AT&T in the lead, are carefully unpicking Californian telecoms policy, scrapping inconvenient restraints on monopoly power while keeping barriers to competition in place. That’s bad news. But there’s good news too: it’s still early in the game.

I’ve advocated for and helped to draft AB 1758 and its predecessors. I’m involved and proud of it. Take it for what it’s worth.

LA legislator is key player for California telecoms policy

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Hardball, fast ball or screw ball?

Four consequential broadband bills approached a key committee in the California assembly over the past couple of weeks, with permissive regulations for incumbents making first base on a walk, and subsidies and rules that favor competitors striking out.

Mike Gatto, a democrat from Los Angeles and the chairman of the utilities and commerce committee, was on the pitching mound for all four bills. He’s the driving force behind a push to put a simple thumbs up or thumbs down vote on the future of the California Public Utilities Commission onto the November ballot, and the gatekeeper who waved through AT&T’s bid to end rural wireline service, while stopping a plan to re-energise broadband infrastructure subsidies by adding money and raising the state’s minimum standard to 25 Mbps download and 3 Mbps upload speeds (and, it should be said, adding money to several non-infrastructure programs as well).

The results for all four bills should put smiles on the faces of AT&T and cable lobbyists, who have been very kind to him over the years: AT&T is Gatto’s top corporate benefactor during his assembly career, giving him more than $20,100 according to FollowTheMoney.org (although, it should be said, unions and trade associations have given him even more). Time Warner Cable gave him $19,900, only $200 less.

On the other hand, he’s pushing a bill that would blast a hole in the subscription-based business models of independents and incumbents alike: AB 2867 would force cable companies, and telephone companies and other Internet service providers to allow customers to cancel service via a website, as easily as they sign up for it. The difference between that bill and the four he curated for incumbents is that it hasn’t come up in front of his committee yet (although it’s scheduled for Wednesday).

Gatto’s Sacramento career is coming to an end – term limits are pushing him out of the assembly and he’s not running for Senate. Is he trying to build a legislative legacy, or looking for a job?

I’ve advocated for and helped to draft AB 1758 – which struck out – and its predecessors. I’m involved and proud of it. Take it for what it’s worth.

AT&T, cable lobbyists gut California broadband subsidies

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Treachery.

Broadband infrastructure subsidies are off the table in Sacramento, thanks to a coordinated campaign by AT&T staff lobbyists and the cable industry’s political front organisation, the California Cable and Telecommunications Association (CCTA). Assembly bill 1758 was pulled by its author, assemblyman Mark Stone (D – Santa Cruz) after it became clear that the California assembly’s utilities and commerce committee was going to spike it at its meeting this afternoon.

Originally, AB 1758 would have put $150 million into the California Advanced Services Fund (CASF) broadband construction subsidy account, and another $200 million in a range of broadband-related programs, including service for hospitals, facilities in public housing, digital literacy and marketing efforts and regional consortia.

A competing measure, AB 2130, written by AT&T and carried by an accomodating assemblyman, Bill Quirk (D – Hayward), was also pulled once the competitive threat posed by the open infrastructure grant program in Stone’s proposal was gone.

AB 2130 would have set up a $100 million infrastructure subsidy game and rigged it so that only incumbent phone companies could effectively play, putting the lion’s share into AT&T’s pocket with no meaningful strings attached. CCTA floated its own alternative, similarly designed to divert money directly to cable companies, but otherwise effectively the same as AT&T’s.

Stone’s offer of good faith negotiations and repeated attempts by Sunne Wright McPeak, CEO of the California Emerging Technology Fund, to find a middle ground were rebuffed. The chairman of the committee, assemblyman Mike Gatto (D – Los Angeles), gave no indication that he’s any less interested in advancing AT&T’s agenda than he was last week when he gushed over another of its measures – AB 2395 – designed to allow it to yank copper lines out of unprofitable rural and inner city markets.

So Stone’s bill is dead.

Although resurrection is always a theoretical possibility in the California legislature, if you have a broadband project to build, you’d have a better chance buying lottery tickets for it. There might be attempts to fund one or more of the ancillary programs in Stone’s bill, perhaps by cannibalising what infrastructure money remains in CASF, but don’t expect to see more broadband construction money added to California’s kitty this year.

I’ve advocated for and helped to draft AB 1758 and its predecessors. I’m involved and proud of it. Take it for what it’s worth.

AT&T writes its own permission slip to end California wireline service

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Cheaper to chop than fix.

AT&T wants to rip out its copper phone networks in California and sell wireless voice and broadband service instead. Its lobbyists in Sacramento wrote a bill – assembly bill 2395 – that would give AT&T blanket permission to shut down regulated plain old telephone service and replace it with whatever kind of unregulated technology it deems most profitable.

For customers lucky enough to live in a high potential area – someplace dense enough with customers and cash to make wireline service sufficiently lucrative – that’ll mean voice over Internet protocol phone service running on one flavor or another of DSL broadband. Everyone else will have to make do with wireless phone and Internet service. In rural California, that’ll mean either via a slow and expensive mobile subscription or AT&T’s coming wireless local loop technology, which might or might not be as expensive – AT&T hasn’t revealed pricing – and will likely max out at 10 Mbps download and 1 Mbps upload speeds.

AT&T shovelled a lot of meaningless rhetoric about global warming, clean energy and customer education into the bill, presumably to divert attention from its real purpose. Boiled down, in 2020 AT&T can shut down its copper network anywhere in the state with 90 days notice. They’ll have to file some paperwork with the California Public Utilities Commission and promise that whatever replacement service they propose – VoIP or wireless – can reach 911. But then they “may utilize any technology or service arrangement to provide the voice services as long as it meets the requirements” for basic functionality.

That makes two bills that AT&T lobbyists have convinced friendly assemblymen to carry for them – Evan Low (D – Cupertino) has the AB 2395 ball. The other one, AB 2130 authored by assemblyman Bill Quirk (D – Hayward), would freeze the California Advanced Services Fund broadband infrastructure subsidy program and replace it with what amounts to a $100 million no-strings gift from the taxpayers to (mostly) AT&T. Taken together, the two bills guarantee AT&T’s monopoly status, particularly in rural areas, and remove any meaningful limits on exploiting it.

Next stop for both bills is the assembly utilities and commerce committee, likely some time in April.

I’ve advocated for and helped to draft competing bills. I’m involved and proud of it. Take it for what it’s worth.

AT&T tries $100 million grab from California taxpayers

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AT&T wants to change California law so that it can take $100 million from taxpayers, for broadband service that’s considered unacceptable under state standards. Assembly bill 2130 was rewritten by AT&T lobbyists and re-introduced last week. It would 1. freeze the current California Advanced Services Fund (CASF) broadband infrastructure subsidy program, 2. authorise the collection of $100 million more from taxpayers, 3. distribute it according to byzantine rules that all but guarantee that the money would go to AT&T to spend as it pleases, while 4. tightening its monopoly stranglehold on rural residents.

All AT&T would have to do in return is make a dubious advertising claim of 10 Mbps download and 1 Mbps upload speeds, as it does now with its mobile broadband service. The current minimum set by the California Public Utilities Commission is 6 Mbps down and 1.5 Mbps up, so any place where the best upload speed available is 1 Mbps would be deemed underserved and eligible for CASF subsidies. That’s, um, inconvenient for AT&T, because it’s similarly taking billions in federal subsidies to provide what will principally be wireless service at that lower standard.

Besides lining AT&T’s pockets with California taxpayer dollars, AB 2130 would also derail a competing proposal, AB 1758. That bill would add even more taxpayer money to CASF, but raise the minimum broadband standard to the federal level of 25 Mbps down/3 Mbps up and continue to allow community-driven broadband infrastructure upgrades by incumbents as well as competing, independent service providers. Who all have to contribute significant capital of their own and strictly account for it.

If AB 2130 passes, AT&T gets rid of pesky competition and annoying accountability, and walks away with most, if not all, of a $100 million gift from taxpayers. Next stop for the bill will be the assembly utilities and commerce committee.

I’ve advocated for and helped to draft AB 1758 and its predecessors. I’m involved and proud of it. Take it for what it’s worth.

Big buck proposal for California broadband aims for wide appeal

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More money to build broadband infrastructure in California is back on the table, along with even more money for other broadband-related initiatives. Assembly bill 1758 was introduced at the state capitol by assemblyman Mark Stone (D – Santa Cruz) this week. It’s a new and improved and greatly enlarged version of last year’s effort to put more money in the California Advanced Services Fund, and raise the minimum broadband standards it supports.

AB 1758 would more than double the size of the fund, raising it from its current maximum of $315 million to an eventual $665 million. However, only $150 million of the extra $350 million would go directly towards subsidising new broadband infrastructure. As it current reads, the split would be…

  • $150 million for broadband infrastructure construction grants.
  • $100 million for so-called broadband adoption efforts by “not-for-profit, community-based organizations, schools, and libraries”, which include “public education and outreach programs that are culturally appropriate and in relevant languages on digital literacy training, assistance with selecting a high-speed Internet provider, and subscription to high-speed Internet access”.
  • $75 million for broadband facilities in public housing. The thinking is that the legislature will be approving more housing projects, so more network wiring and equipment will be needed too.
  • $15 million for regional broadband consortia
  • $10 for the California Telehealth Network, which could be spent on services from existing broadband networks.

The previous effort to recharge CASF was focused on infrastructure grants, and failed in the face of vociferous opposition from incumbent telephone and cable companies who saw no benefit in subsidising potential competitors, indirect or otherwise. AB 1758 is designed to mute objections from incumbents and increase the appeal of CASF, which is primarily focused on rural areas, to urban interests.