Tag Archives: ab2292

Governor Brown signs community broadband bond financing bills into law

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Cities and other local agencies in California will be able to issue bonds to pay for building broadband infrastructure, thanks to two new laws approved by Governor Brown yesterday. Assembly bill 2292 and senate bill 628 expand the use of infrastructure financing districts (IFDs), on the one hand specifically allowing broadband to be included in old-style IFDs and creating a new kind, called enhanced infrastructure financing districts, on the other. In both cases, the bonds can be repaid by earmarking the incremental tax revenue that the project is expected to produce.

It’s more like a win and a half than two solid victories for community-financed broadband, though. SB 628 creates enhanced IFDs, which only require a single two-thirds majority vote by the electorate and have more flexible structures. It goes a long way toward replacing the old redevelopment agencies that the legislature (and the governor and the courts) killed in 2012. It will be a very useful tool for upgrading California’s ageing and overused water and transportation infrastructure, among other things. But it doesn’t specifically allow enhanced IFDs to issue bonds to build broadband facilities. Nor does it prevent it, particularly. So until someone actually tries to use it for, say, a fiber network, broadband will be in a grey area of the new law.

Not so with traditional IFDs, though. AB 2292, authored by San Leandro assemblyman Rob Bonta, specifically allows the use of bonds to build broadband infrastructure, and defines it as “communications network facilities that enable high-speed Internet access”.

Legally, the two don’t overlap, so Bonta’s bill doesn’t directly affect the new and improved system created by SB 628. But as far as it goes, it gives broadband the same critical infrastructure status as roads, sewers and aqueducts.

Governor’s pen will write the story for community broadband development in California

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Three bills with big implications for community broadband in California are still sitting on Governor Brown’s desk, waiting for his approval or veto:

Assembly bill 2272 would blow a huge hole in the California Advanced Services Fund and roll back much of the progress made last year when the legislature – and Brown – added $90 million to the kitty and made independent ISPs eligible for broadband construction subsidies. By requiring every CASF-funded project – past, present and future – to follow the state’s so-called prevailing wage rules, the effective subsidy would drop from 60% (for underserved areas) to less than 30% and the cost to the state would nearly double. And AB 2272 would impose a heavy paperwork burden on any company that took the money. Brown should veto it.

On the other hand, AB 2292 would give cities and other local agencies another financing tool to pay for community broadband infrastructure. Authored by San Leandro assemblyman Rob Bonta, it would put broadband on a par with other types of public works, like roads, sewers or water systems, and make it possible for cities to pay for it via bonds issued by infrastructure financing districts. Brown should approve it.

Senate bill 628 is a half a step in the right direction for community broadband development, but a giant leap for public infrastructure overall. It would create the legal framework for enhanced infrastructure funding districts that would have far greater flexibility in building – with two-thirds voter approval – basic facilities. Like roads, sewers and water systems. But not specifically broadband networks, although it doesn’t exactly preclude it either. Half a step forward is still progress and Brown should also approve it.

The deadline for a decision is the end of the month.

California legislature puts broadband infrastructure financing on par with water and roads

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Roads, water, sewers, broadband. You need it all to build an economy.

It’s up to governor Brown to decide whether broadband infrastructure gets equal treatment with transportation and water projects in California, at least when local governments want to build it. On a lopsided vote, the state assembly approved the final version of assembly bill 2292 yesterday, which explicitly allows local governments to use infrastructure financing districts (IFDs) to issue bonds to build broadband projects, and then pay the money back with property tax revenue.

Written and backed by assemblyman Rob Bonta (D – Oakland) at the urging of San Leandro mayor Stephen Cassidy, economic development is a primary goal of AB 2292, a point Bonta made yesterday on the assembly floor, saying the bill would…

…expressly allow local governments the ability to use infrastructure financing districts to finance projects related to broadband. Broadband provides cities and counties with an opportunity to stimulate the economic climate by providing businesses with the competitive advantage of being connected to high speed fiber optic networks. AB 2292 will help boost local economies, create local jobs and increase access for schools, libraries and other public facilities to state of the art telecommunications networks.

AB 2292 is not a magic bullet, though. To form an IFD requires the agreement of the local agencies involved and a two-thirds majority of the electorate. Then two more votes – including another one requiring two-thirds approval – are needed before any bonds can be issued.

Another approach – enhanced infrastructure financing districts – is still in the works in Sacramento. The idea is to reduce the super majority required to 55% and only require a single vote by the electorate to form an IFD. It would also allow more flexibility in putting financing packages and partnerships together. The specifics of that deal are being worked out behind closed doors at the Capitol, but if it’s to be approved this year, it’ll have to emerge soon – the California legislature adjourns in less than two weeks, and this Friday is a key deadline for getting bills into final form.

Tellus Venture Associates proudly counts the City of San Leandro as a client. I have talked to them about AB 2292, but it’s something I’d support regardless of whose idea it is. That said, it’s a bill that would benefit most of my clients. I’m not a disinterested commentator; take it for what it’s worth.

California legislature can help and hurt broadband infrastructure development this week

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One step forward and two slides back.

Two bills with big implications for broadband infrastructure in California are queued up for votes in the state legislature this week. Assembly bill 2272 was blessed by the senate leadership last week and sent on for a floor vote. The date hasn’t been set yet.

That bill would put a huge dent in the California Advanced Services Fund by requiring all the projects it subsidises to follow an inflated statewide set of union work rules and pay scales, regardless of who is doing the job or what the going rates are in a particular area. Not only would the so-called prevailing wage requirement drain CASF faster, it would reduce the incentive for non-unionised independent ISPs to build new broadband infrastructure. Unionised incumbents might not even notice the difference.

So far, it’s moved slowly but steadily through the legislative process with barely a peep of protest. Democrats, who have a big majority in the legislature, have uniformly supported it and few republicans have opposed it. Neither side wants to upset the bill’s union backers in an election year.

On the other hand, assembly bill 2292 – would allow local governments to use infrastructure financing districts to pay for broadband projects. It was unanimously approved by the assembly local government committee last week, after listening to San Leandro mayor Stephen Cassidy outline the advantages. It’s scheduled for what could be final approval by the assembly today (the senate has already voted in favor), although it’s possible it could be bumped to later in the week.

The legislature has two more weeks left in the current session. Any bills now on the table will either be approved by the end of next week or die quietly.

Tellus Venture Associates proudly counts the City of San Leandro as a client. I have finally talked to them about AB 2292, but it’s something I’d support regardless of whose idea it is. It’s a bill that would benefit most of my clients. For that matter, AB 2272 would hurt many of my clients. So I’m not a disinterested commentator; take it for what it’s worth.

California bill defining broadband as public infrastructure diverted for review

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A proposal to include broadband infrastructure in the list of things that special infrastructure financing districts (IFD) can pay for in California has been kicked to an assembly committee.

The measure – assembly bill 2292 – was approved by the California senate earlier this week, and was headed to a vote by full assembly. But because it was done using the gut-and-amend process – the text in an earlier bill that had almost nothing to do with the subject was stripped out and replaced with broadband financing language – the bill was diverted to the local government committee for review.

As an analysis by legislative staff mentions, it’s arguable whether the bill is even necessary…

This bill allows any IFD to finance public capital facilities or projects that include broadband, and defines “broadband” as communications network facilities that enable high-speed Internet access…

State law says that the types of public facilities of communitywide significance that an IFD may finance are not limited to the types of projects that are listed in statute. As a result, a city-wide fiber optic network may already qualify for IFD financing, despite not being specifically mentioned in the state laws governing IFDs. This bill may only clarify what is already allowable under current law.

Necessary or not, though, it’s a good idea to clarify the law. Local broadband initiatives are usually opposed – publicly or behind closed doors – by big incumbent broadband providers with deep pockets for political campaigns and lawsuits. The bill is sponsored by the City of San Leandro, which is a leader in innovative municipal broadband initiatives, and carried by assemblyman Rob Bonta (D – Oakland). Initially, the proposal reportedly ran into flack from the usual suspects – Comcast and AT&T – so vigilance is no vice. But so far, no open opposition has surfaced.

The committee vote is scheduled for Wednesday, 15 August 2014.

Tellus Venture Associates proudly counts the Cities of San Leandro and Oakland as clients. I haven’t talked to them about AB 2292 – it’s something I’d support regardless of whose idea it is. But even so, it’s a bill that would benefit most of my clients. I’m not a disinterested commentator; take it for what it’s worth.

New public financing method for broadband clears California senate

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Padilla steps up for local broadband financing.

Broadband would be added to the list of public works projects that cities and counties in California can pay for via infrastructure financing districts (IFDs), under a bill passed by the state senate yesterday on a 36 to 0 floor vote. Assembly bill 2292 started life as a way of financing rail transport at the Port of Oakland, but was gutted and rewritten by assemblyman Rob Bonta (D – Oakland), at the suggestion of San Leandro’s mayor, Stephen Cassidy.

Senator Alex Padilla (D – Los Angeles) – who at times has been a champion of community broadband efforts, but at other times something less than fiery – urged his colleagues to vote in favor of the bill…

As many of you know, access to high speed Internet is increasingly critical, not just in our personal daily communications, but for business. And unfortunately, while most areas of the state do have – if not a single – multiple options for accessing high speed Internet, not all parts of the state do. And the areas that are unserved or underserved are not exclusive to the rural areas of the state. So with cities and counties throughout the state needing creative financing models to help fund these projects and help spur economic development in their communities, the concept of an infrastructure financing district has come about.

There was no debate or discussion. The only group that registered opposition publicly was the California Taxpayers Association, which doesn’t like IFDs of any sort. The next stop for the bill is the assembly floor. Comcast and AT&T are said to be unhappy with the idea, but apparently aren’t sufficiently troubled to apply the necessary pressure to stop it. Yet.

Tellus Venture Associates proudly counts the Cities of San Leandro and Oakland as clients. I haven’t talked to them about AB 2292 – it’s something I’d support regardless of whose idea it is. But even so, it’s a bill that would benefit most of my clients. I’m not a disinterested commentator; take it for what it’s worth.

Broadband policy on hold for lawmaker’s summer vacation

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Californian legislators are off for the next month, heading out of Sacramento this afternoon just ahead of the July 4th holiday and not scheduled to return until early August. At which point, they’ll have a less than month to act on the stack of bills in front of them, which includes two that carry significant implications for public broadband financing in California.

Assembly bill 2272 would about double the cost of broadband projects subsidised by the California Advanced Services Fund, by imposing union pay and work rules, regardless of who is doing the construction. So far, it’s had a painless ride through the assembly and two senate committees, and is now awaiting approval from the last committee – senate appropriations – before going to a vote on the senate floor. It was amended in the senate, which means it’ll have to go back to the assembly for concurrence, but with unanimous support from democrats as well as a handful of republican votes, there seems to be little chance it won’t end up on the governor’s desk in September.

On the other hand, assembly bill 2292, authored by San Leandro assemblyman Rob Bonta, potentially puts more money into the broadband pot (although it too would carry union rules with it). It would allow local governments to use infrastructure financing districts to fund broadband construction, as now can be done with road and water projects. It requires multiple approvals from a super majority of voters, but even so the choice would be in local hands. AB 2292 is waiting for a floor vote in the senate, where there seems to be little opposition, except from taxpayer groups and incumbent carriers (which are often the same thing). We’ll see how it goes in August.

Broadband infrastructure gets same financing status as roads, water in California bill

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At the end, it’s a brilliant idea.

The twists and turns of the legislative season in Sacramento produce surprises. This year is no different. Assembly bill 2292 was originally targeted to rail projects in Oakland, but other legislation took care of it. So following a conversation with San Leandro mayor Stephen Cassidy the bill’s author, assemblyman Rob Bonta, a democrat who represents both cities, turned it into a way to pay for municipal broadband projects.

Cities and counties in California can form infrastructure financing districts (IFDs) to pay for building “regional scale public works”. Right now, that includes, for example, streets, water treatment plants and libraries. And arguably broadband facilities. But only arguably. As currently written, AB 2292 would end the argument

In addition to the projects authorized by [existing law], any infrastructure financing district may finance public capital facilities or projects that include broadband…For purposes of this section, “broadband” means communications network facilities that enable high-speed Internet access.

The senate governance and finance committee took the original Oakland rail bill, pretty much deleted everything and substituted that language. It then approved it on a unanimous, bipartisan vote. Next stop is a vote of the full state senate. Assuming it passes, it then goes back to the assembly for a second vote.

Even if the bill passes, it’ll still be a long road to walk before any money flows to muni broadband projects. IFDs have to be approved by all the local agencies that would be contributing tax revenue, local property owners have to be consulted and then it goes through a series of public votes, including two – to form the IFD and then to issue bonds – that require a two-thirds majority to pass.

The rumor is that Comcast and AT&T are not happy with the bill, but even if that wasn’t the rumor, you can safely assume it. Last year’s fight over extending subsidies from the California Advanced Services Fund proved that incumbents are determined to keep cities out of the broadband business. Regardless of which way you see it, though, let assemblyman Bonta know what you think.

Tellus Venture Associates proudly counts the Cities of San Leandro and Oakland as clients. I haven’t talked to them about AB 2292 – it’s something I’d support regardless of whose idea it is. But even so, it’s a bill that would benefit most of my clients. I’m not a disinterested commentator, take it for what it’s worth.