Tag Archives: ab1999

Newsom’s budget plan lowers barriers to public broadband financing

by Steve Blum • , , , ,

Following up on one of the items in his campaign manifesto, California’s new governor, Gavin Newsom, might make it easier to finance municipal broadband projects. One of the many, many ideas offered in his maiden budget proposal is to make it easier to form enhanced infrastructure financing districts by eliminating requirements for voter approval of bond issues…

Various economic development tools have been introduced following the dissolution of Redevelopment Agencies (RDAs), including Enhanced Infrastructure Financing Districts (EIFDs). However, only three EIFDs have been formed since statute created them in 2014. EIFDs can be created by cities or counties without voter approval and expend tax increment revenues without voter approval. However, an EIFD must receive 55-percent voter approval to issue debt.

The Budget encourages the formation of additional EIFDs through removal of the 55-percent voter approval requirement to issue debt. This change will allow EIFDs to support longer-term infrastructure commitments, similar to former RDAs.

Although it’s always been arguable that EIFDs can build and operate publicly-owned broadband infrastructure, the California legislature removed all doubt last year when it passed assembly bill 1999. Public agencies in California – cities, counties and special districts, including EIFDs – were given explicit authority to get into the broadband business.

As with the redevelopment agencies that were killed off by the legislature in 2012, an EIFD would repay the debt with future increases in tax revenue attributable, in theory, to the infrastructure improvements. It’s a complicated process. Even if Newsom succeeds in making it easier for EIFDs to borrow money, that doesn’t mean it’ll be easy.

Forming an EIFD will not be the first step towards a community broadband project. It will come further down the road, after a city or other local agency decides it wants to get into the broadband business. But it’s one more tool in the kit, and that’s useful.

California’s next governor talks the broadband talk, but will he walk the walk?

by Steve Blum • , , ,

California governor-elect Gavin Newsom has a broadband development track record of sorts. Whether that will translate into sound telecoms infrastructure policy remains to be seen.

When he was mayor of San Francisco, Newsom made a big splash with a deal with Google and Earthlink to blanket the city with WiFi, with free service playing a prominent role in a difficult to understand business plan. That was back during the great municipal WiFi bubble of the mid–2000s. The deal collapsed, but Newsom pushed on with a small ball program to install WiFi hot spots, including in public housing communities.

Newsom didn’t talk much about it during the campaign, but broadband rated a mention on his website

We can’t build an innovation culture with global reach or reap the benefits of the information age without the capacity to send and receive vast amounts of information. As Governor, Gavin will align infrastructure decisions with regional strategies, pursue new and creative approaches to financing including Enhanced Infrastructure Financing Districts [EIFDs] and the new state bank, and lead the movement to make universal access to high-speed broadband a reality for every Californian.

It’s not exactly a jump over the big hurdle – finding the money to pay for modern broadband infrastructure – but at least there are a couple of small hops in front of it. EIFDs were supposed to be a fast track to bond financing, backed by the tax revenue that was expected to result from infrastructure-driven economic growth. Assembly bill 1999, passed by the California legislature and signed by governor Jerry Brown earlier this year, specifically allows EIFDs to get into the broadband business.

But pretty much everything under the sun rates a line or two in Newsom’s encyclopedic campaign platform. Whether any given issue makes it from the wish list to the to do list is anyone’s guess.

California’s new muni broadband law establishes rights, and net neutrality responsibility

by Steve Blum • , , , ,

California governor Jerry Brown actually signed two network neutrality bills into law on Sunday. The Big Kahuna was senate bill 822, which establishes net neutrality rules for Internet service providers doing business in California. But alongside it was assembly bill 1999, which, among things, requires publicly owned broadband systems to abide by net neutrality principles, whether or not their private competitors have to.

It’s a mixed blessing. On the one hand, it’s good thing for muni broadband systems to operate on a net neutral basis, both from a public policy and a customer service perspective. On the other hand, it might not always be a viable way of doing business. If SB 822 is tossed out by a court, and the current anything goes federal policy stays in place, then a few years from now the broadband business might look completely different. If muni broadband systems are handcuffed to a business model that is no longer competitive, the only ones who will benefit are the big, monopoly model ISPs like AT&T, Charter and Comcast. That’ll be a problem to worry about later, though.

AB 1999 does two other things. It lifts a restriction on community service districts (CSDs) that effectively bars them from the broadband business. It was the only meaningful restriction on public agency broadband on the books in California.

The bill also clearly spells out that cities, counties and certain kinds of special districts, including CSDs, county service districts, utility districts and infrastructure financing districts can offer broadband service. It’s long been assumed they can, but there wasn’t much in the way of explicit legal authority. Cities have a long history of precedent to rely on, but other kinds of agencies don’t have that level of confidence to fall back on. I know from experience that there is a huge difference between “there’s nothing that says you can’t” and “the law specifically says you can” when you’re trying to convince local officials that a broadband enterprise is a good idea.

But there’s also potential danger. A law that explicitly allows muni broadband service is a tempting target for corporate lobbyists who want to fiddle with it, to the benefit of their business models and at the expense of the public. We’ll have to keep a permanent watch on California’s new muni broadband law.

California muni broadband bill lands on governor Brown’s desk

by Steve Blum • , , ,

Net neutrality isn’t the only broadband issue awaiting a decision from California governor Jerry Brown. As the legislative session wound down to a close last week, the California senate and then the assembly approved assembly bill 1999 more or less on party lines – democrats mostly voted aye, republicans no.

AB 1999 explicitly sets out in law what has been the practice and, to the extent its been challenged, the long standing precedent that Californian cities and some kinds of special districts can build broadband systems and offer service, whether or not it’s in competition with cable and telco monopolies.

The bill also removes the only significant barrier to public broadband that’s clearly written into California’s statutes: the byzantine restrictions – amounting to a ban for all practical purposes – on community service districts (CSD) that want to get into the broadband game. CSDs are halfway houses for unincorporated communities that want a higher level of municipal services, but don’t want all the legal and financial overhead that comes with being a fully incorporated city. Yet.

Net neutrality requirements are also written into AB 1999, but it’s a double-edged sword. Broadband service provided by a local agency has to adhere to the basic net neutrality principles: no blocking, throttling or paid prioritisation. That seems to be a good deal for muni broadband customers, but it comes with a risk. If private sector Internet service providers don’t have to follow net neutrality rules, that may be a competitive advantage for muni ISPs. But if Internet fast lanes, slow lanes and no lanes become the norm, muni systems would likely face higher costs to swim against the tide, and would have to charge customers higher prices. Or would simply be undercut by monopoly-model competitors who can shift costs to make monthly subscription rates look cheaper.

Governor Brown has until the end of September to decide what to do with AB 1999, and the hundreds of other bills approved last week by California lawmakers.

With a week left, California muni broadband bill still on legislature’s to do list

by Steve Blum • , , , ,

A bill that allows more types of local agencies to get into the broadband business, and requires such municipal broadband providers to abide by network neutrality principles, awaits a decision by the California senate. Assembly bill 1999, authored by assemblyman Ed Chau (D – Los Angeles), would remove a restriction that makes it all but impossible for community service districts to get into the broadband business.

It also explicitly allows other types of local agencies, such as county service areas and enhanced infrastructure financing districts (EIFDs), to provide broadband services. In theory, there’s nothing preventing that happening already, but on the other hand there’s nothing that says it can. To the extent restrictions exist, Chau says he wants to remove them

California law currently authorizes municipal utility districts and public utility districts to operate their own broadband networks, but other forms of independent local government have limited authority to do so. Restricting local governments from building out their own high-speed networks is counterproductive to closing California’s digital divide, especially in rural areas where only 43 percent of the population has access to broadband in their households, or in areas that only have access to one provider.

A parallel bill, SB 1145, gives EIFDs a little more financial flexibility. It would allow them to finance some ongoing maintenance costs, although not with money raised through a bond issue.

The net neutrality requirements – no blocking, throttling or paid prioritisation – aren’t as comprehensive as those proposed in senate bill 822, which would apply to public and private sector Internet service providers alike. But if SB 822 doesn’t make it into law or is thrown out later by a court, the net neutrality obligations in AB 1999 would remain.

AB 1999 is just one of hundreds of bills that have to be acted upon by next Friday, when the legislative session ends. It has to be approved by the California senate, and then go back to the assembly for concurrence with a technical amendment that was made a couple days ago.

California legislature says yes to broadband, online privacy bills

by Steve Blum • , , , ,

With Friday’s deadline behind us, we know which bills are getting serious consideration in the California legislature. Any bill that didn’t make it through a full floor vote and get sent from one house to the other is now dead (with the caveat that death is never final so long as the California legislature is still in session).

Short answer: all the bills I’m still following and, for the most part, blogging about live on…

Muni broadband

Net neutrality

  • Senate bill 460 – resurrects net neutrality rules as consumer protection law; requires state and local agencies to buy Internet service from companies that follow those rules. Passed by senate, now assigned to the assembly communications and conveyance committee – which also defers to industry lobbyists – and the privacy and consumer protection committee.
  • SB 822 – a stronger net neutrality revival, it was passed by the senate and is in the hopper at the assembly. Expect it to be paired with its weaker cousin, SB 460, in the committee process.
  • Senate resolution 74 – a high sounding but completely meaningless endorsement of net neutrality principles by the California senate. Passed on a party line vote and is probably hanging on someone’s wall, somewhere.


  • AB 1906 – aimed at the Internet of things, it requires passwords on Internet-connected devices. Passed by the assembly, sent to the senate.
  • AB 2511 – potentially the legislature’s most fraught Internet bill this session, it would require online merchants to “take reasonable steps to verify the age” of anyone who might purchase or view age restricted products or content. Also restricts commercial use of information posted by minors. Passed by the assembly, sent to the senate.
  • AB 2935 – adds privacy protections to health monitoring programs, online and otherwise. Could have implications for fitness and athletic social media, such as Strava. Passed by the assembly, sent to the senate.
  • SB 327 – another shot at requiring security features on connected devices. Passed by the senate, now with the assembly privacy and consumer protections committee.
  • SB 1001 – requires bots – computer programs that mimic people, used by companies to chat with customers – to identify themselves as such. Passed by the senate, sent to they assembly.
  • SB 1186 – requires local governments to disclose the types and uses of law enforcement surveillance technology. Passed by the senate, sent to the assembly.
  • SB 1424 – formerly a far reaching attempt to police free speech on the Internet, it was neutered by senate committees and now just calls for the California attorney general to study “the problem of the spread of false information through Internet-based social media platforms”. Passed unamimously by the senate, sent to the assembly.

Emergency preparedness

  • AB 2910 – a weak response to the fire storms that ravaged California last year, it would require the California Public Utilities Commission to file a report about restoration efforts in the black hole of Sacramento with the legislature. Passed by the assembly, sent to the senate.
  • SB 1076 – a rare attempt by the legislature to prepare for a disaster before it happens, it would require the California office of emergency services “to update the state emergency plan to include preparedness recommendations to harden the critical infrastructure of electrical utilities against an electromagnetic pulse attack, geomagnetic storm event, or other potential cause of a long-term outage”. Translation: start thinking about how to keep the lights on if a nuclear bomb explodes (possible, but not inevitable) or Earth is hit by another Carrington event (definitely inevitable). Passed by the senate, sent to the assembly.

Muni broadband virtue should be a choice, not a chastity belt

by Steve Blum • , , ,

Well intentioned or not, assembly bill 1999 could work against efforts to preserve network neutrality, and prevent municipal broadband systems in California from competing against big, monopoly-model Internet service providers.

Authored by assemblyman Ed Chau (D – Monterey Park) , AB 1999 was approved by the California assembly and awaits action in the senate. It would: 1. explicitly allow more types of local agencies – e.g. county service areas, community service districts, enhanced infrastructure financing districts – to get into the broadband business, and 2. require all publicly owned, i.e. muni, broadband systems to abide by net neutrality principles.

Muni broadband is about local choice. Creating more options for local voters to choose from is a big step forward. But locking them into a 2017 business model might prove deadly a few years from now.

It’s a bad idea if net neutrality obligations only fall on muni broadband systems. We don’t know what the economics of the Internet will look like five or ten years from now, and handcuffing munis could prevent them from competing in the marketplace. That would benefit big, monopolistic providers like AT&T, Comcast and Charter Communications, at everyone else’s expense.

Consider this scenario: all limits on big ISP business practices disappear (say, on 11 June 2018), paid prioritisation kicks in, with AT&T, Comcast and Charter blending their subscriptions video packages into their broadband packages. For example, AT&T might offer you all their DirecTv channels for $80 per month – delivered via broadband, as they intend to do – and let you use any spare capacity to check email and browse the web. “Free” Internet access, in other words. You’re still paying for it, but you don’t notice it so much.

Muni broadband systems will struggle to match the level of control that AT&T, Comcast and Charter have over the market for video services. Forcing them to run their business within 2017’s norms might make them completely uncompetitive in 2022. Granted, it would be a bad thing if muni providers back pedalled on net neutrality principles, but it would be an absolute disaster if they went out of business completely.

I don’t know what will eventually happen, but I get nervous whenever business decisions are based on political positions. It’s good business right now for small ISPs – public and private sector – to wholeheartedly embrace net neutrality; it might be different tomorrow. The whole point of muni broadband is to keep the power of choice within local communities.

That’s where it should stay.

Muni broadband can defend net neutrality, but winning isn’t guaranteed

by Steve Blum • , , ,

Net neutrality and municipal broadband are two separate issues that overlap in a couple of ways. First, there’s an assumption that muni broadband systems will abide by net neutrality principles, even if not required (but there’s a bill in the California legislature, AB 1999, that would require it). It’s an easy pledge to make now, but it’s not a certainty that muni systems could or would swim against the financial tide if the economics of the business changes significantly.

And the economic structure of the Internet will continue to change, as it has for the past thirty years. Small broadband providers, muni or not, only control traffic up to a certain point. Traffic could be shaped, throttled, blocked or prioritised on the other side of that point, reducing the value of a neutral last mile. Another consideration is the value of privileged access to users, particularly by content providers that rely on advertising. Sharing that revenue could make it possible for big, non-neutral incumbents to drive down the retail price of Internet service, making it impossible for independents to compete on the basis of virtue alone.

Another area where net neutrality and muni broadband overlap is on the political side. The big incumbents – cable and telco – lobby hard against muni broadband in both Sacramento and Washington. Those same lobbyists are working against net neutrality, and paying large amounts of money to legislators who are involved with both issues. There’s a similar, parallel effort to influence state and federal regulators.

There isn’t the same unity – throw weight, I’d call it – on the other side. There’s a core of people who care equally about freedom to use the Internet and freedom to provide the service, but for the most part advocates are involved with one issue or the other. When end-of-the-session horse trading begins, it’ll be much easier for cable’s and telco’s unified, deep pocketed lobbying fronts to cut a deal. Whether their passion is muni broadband or net neutrality, separate, single issue groups will not be happy with the result.

California legislature looks at muni broadband rules. Beware

by Steve Blum • , , ,

Municipal broadband is on the line in the California legislature. Assemblyman Ed Chau (D – Monterey Park) introduced assembly bill 1999 last week. As drafted, it would do two things: require muni broadband systems to abide by network neutrality principles and remove restrictions that effectively prevented community services districts from getting into the Internet service provider business.

On the face of it, AB 1999 is straightforward. It succinctly lays out net neutrality rules – no blocking, throttling or paid prioritisation – and applies them to broadband services offered by cities, or by the special districts that are particularly authorised to do so by Californian law.

Public utility districts, municipal utility districts and infrastructure finance districts are allowed to get into the telecoms business with no restrictions. Community services districts can only do so if “if the district is unable to locate a private person or entity who is willing or able to provide broadband service”. Even if it does, if someone rocks up later and offers service then the district has to sell or lease the system “at fair market value”.

AB 1999 would remove that restriction and give community services districts the same options as utility and infrastructure financing districts.

All that is fine. The problem is that broadband bills that are introduced with good intentions – Chau gained cred with AB 375 last year, which would have established state Internet privacy regulations – are often flipped as they move through the legislative process. That happened to AB 1665. It started out as a carrier-neutral broadband infrastructure subsidy bill, but was rapidly rewritten into an incumbent piggy bank by telco and cable lobbyists and pushed through by biddable lawmakers.

And that’s the danger with AB 1999. Net neutrality regs are well and good, but it’s an industry issue, not a particular problem for muni broadband operations. It’s a fair argument that community services districts should be allowed to offer broadband service, but there’s also a case to be made that they shouldn’t get into the public utility business – that’s what utility districts are for.

In the unlikely event that AB 1999 is passed as currently written, it’ll do no harm and might do some good. Once cable and telco lobbyists get their hands on it, though, and offer friendly amendments to their special friends on key committees, it’ll be a different story. Stay tuned.