Tag Archives: sb740

California broadband subsidy debate moves behind closed doors

by Steve Blum • , , , , , , ,

Waiting for the word.

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.

Second chance for California broadband subsidies

by Steve Blum • , , , , ,

It’s not pretty, but it’s alive again.

The California Advanced Services Fund (CASF) has a new lease on life. The assembly utilities and commerce committee brought senate bill 740 back from the dead this afternoon on an 11 to 4 vote. If it makes it through the rest of the legislative process, it will add $90 million to CASF and (sort of) lengthen the list of eligible applicants.

All fifteen members of the committee were on hand for the special meeting. The only item on the agenda was reconsideration of last month’s rejection of SB 740. A parade of supporters endorsed it, no one opposed it and the vote came quickly. One republican, Jeff Gorell, joined all ten of the democrats on the committee in voting aye. The remaining four republicans voted no.

Committee chairman Steven Bradford (D – Los Angeles) stepped down from the podium to present the bill to his colleagues, eloquently listing the benefits for rural and urban communities alike. It was a more compelling pitch than the one given last month by the bill’s sponsor, senator Alex Padilla (D – Los Angeles), who was noticeably absent today.

The bill was not unscathed. The cable industry’s lobbying front, the California Cable and Telecommunications Association, forced Padilla to add language that will make it very difficult, at best, for independent ISPs and cities to apply for broadband infrastructure subsidies. But that’s better than impossible, which is what they have right now.

Assuming a companion measure, assembly bill 1299, also makes it through the process, $70 million will be added to the CASF grant account, $25 million will go towards building and marketing broadband facilities in public housing, with $5 million being taken from the infrastructure loan fund to make up the difference.

The next stop for SB 740 is the assembly appropriations committee. After that, assuming the love fest continues, the full assembly votes on it. The goal is to have it on Governor Brown’s desk by mid-September.

Monday is make or break day for California broadband subsidies

by Steve Blum • , , , , , ,

How many seats will be empty?

Eight members of the assembly utilities and commerce committee have to vote aye three times to resurrect a bill to top up and extend the California Advanced Services Fund (CASF). A special committee meeting is scheduled for 3:00 p.m. on Monday, and senate bill 740, the CASF extension, is the only item on the agenda.

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.

Sunday morning coming down in Sacramento

by Steve Blum • , , , , , ,

Jesse knew a lot about the cleanest dirty shirt.

Money is the mother’s milk of politics.
Jesse Unruh, most powerful assembly speaker in California history

Money, the kind that pays for increasingly expensive California legislative campaigns, is what gives Sacramento lobbyists power when ideas and ideals run out of steam. Voters remember the big and simple issues – say, whether to raise taxes or give hybrid cars a free pass in diamond lanes – but it’s lobbyists who meticulously track every vote on the small and complex bills that comprise the daily toil at the state capitol.

Subsidies for improving broadband service in places ignored by big cable and telephone companies are irrelevant to most Californian voters. The immediate benefit mostly goes to sparsely populated areas with few votes and even less cash. But it matters a lot to cable and telephone companies that want to extract the greatest profit possible out of ageing copper networks. In rural and inner city areas, no broadband construction subsidies equals no competition.

I mean that as an observation of natural economic consequences and not as criticism. Within ethical limits, corporations have an iron clad obligation to provide the greatest possible return on investment to their shareholders. They aren’t paid to pursue effective or equitable public policy. That job belongs to our elected representatives.

The California cable lobby has stopped opposing senate bill 740, which would add money to the California Advanced Services Fund, but it has pointedly said it is “neutral”. Which means it won’t try to punish committee members who vote in favor of it, but it won’t look particularly kindly on them either, come fundraising time.

Five members of the assembly utilities and commerce committee voted aye on SB 740 last month and three voted no. One way or the other, they took a stand. Seven members sat silent, allowing the bill to fail without upsetting either potential industry campaign contributors or constituents who might care about the outcome. SB 740 comes up for reconsideration in the assembly utilities and commerce committee on Monday. Those seven have a chance to show whether they live up to Jesse Unruh’s standard for Sacramento lawmakers:

If you can’t eat their food, drink their booze, screw their women and then vote against them, you have no business being up here.

Latest proposed changes to California broadband subsidies a net gain, but not as much as hoped

by Steve Blum • , , , , , , , ,

Take the money and run.

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.

Cable lobby edits California broadband subsidy bill, but at least it’s moving forward again

by Steve Blum • , , , , , , ,

You can’t have my precious.

A last minute deal was struck with the California Cable Television Association and Comcast to get their support for a bill that would add $90 million to the California Advanced Services Fund (CASF) and allow independent ISPs and cities to apply for infrastructure subsidies under very tight restrictions.

Senate bill 740 stalled in an assembly committee last month after cable lobbyists carpet bombed members with phony fears about overbuilding and false claims about how many Californians lack broadband service, and how much of it they need.

The draft version of the latest amendments would limit where and how an unregulated ISP could apply for CASF grants and loans. Funded projects would have to include unserved households, and incumbent broadband providers, such as Comcast or AT&T, would have a chance to grab the money if they want to upgrade their existing service. In other words, if an independent ISP spends time and money developing a project for underserved homes, any incumbent cable or telephone company would have the right to snatch it away.

A city or other local agency would be able to get funding only for building out to unserved homes or businesses, and only if no one else is interested.

As defined by the CPUC, an unserved home has no broadband service available at all, other than maybe satellite service, while an underserved home has something, but it doesn’t deliver at least 6 Mbps download and 1.5 Mbps upload speeds. Currently, only telephone companies that are certified and regulated by the CPUC can apply. Today’s changes would not affect them; they would still be able to apply for either under or unserved areas without particular restrictions.

Assuming there are no glitches, the assembly utilities and commerce committee will consider the amended bill on Monday. The agreement also clears the way for a bill to fund broadband facilities and marketing programs in public housing.

Update, 8 August 2013 – the fully updated, current version of SB 740 is now available.

California lawmakers have a chance to reconsider cable lobby’s big lie

by Steve Blum • , , , , , , ,

Even Comcast doesn’t believe 1.5 Mbps is enough.

The effort to resurrect a proposal to add $90 million to the California Advanced Services Fund (CASF) and allow independent ISPs and cities to apply for grants is gathering steam. The California Emerging Technology Fund (CETF) has published a white paper that’s aimed at debunking one of the more outrageous bits of misinformation spread by cable lobbyists as they derailed the bill in an assembly committee last month.

The whopper told by cable industry lobbyist Carolyn McIntyre was that only 12,000 homes in our state are unserved by broadband providers. That figure was pulled from incomplete data. The true number, as documented by CETF, is something like 225,000. Plus, there are millions more that are underserved by California Public Utilities Commission standards. McIntyre, with Comcast’s hired gun John Moffat singing back up, heaped scorn on those Californians by trying to convince committee members that no one needs more than 1.5 Mbps.

The false accusation that CASF pays for “overbuilds” is also refuted in the CETF white paper. Cable companies consider a project to be duplicating existing service – overbuilding – if substandard broadband service is available somewhere nearby, or if a cable company can claim an area to be within its franchise, even if it never strung wires or otherwise offered service. If you’re going to lie, make it big.

The pressure that McIntyre and Moffat put on assembly utilities and commerce committee members worked. Legislators who had previously supported senate bill 740 sat on their hands, leaving the measure three yes votes short of approval. Its author, senator Alex Padilla (D – Los Angeles), said afterwards he would be asking the committee to reconsider. That should happen on 12 August 2013. The committee hearing hasn’t been formally scheduled yet, though.

Anyone who is interested in offering an opinion can email or write to any or all of the committee members.

Trading broadband subsidies for access to California public housing residents

by Steve Blum • , , , , , ,

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.

Not withstanding Google’s travails in Kansas City, it’s most commonly cable companies who have trouble getting into apartment complexes, and it was a cable lobbyist who originally pushed legislators to adopt the language.

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.

Landlords face down Google: who benefits from broadband?

by Steve Blum • , , , , , ,

Complex issue for Kansas City complexes.

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.

Which matters for the policy debate here in California over broadband grants for public housing and rules regulating who can get telephone ratepayer-funded subsidies for infrastructure projects in under and unserved areas, rural and urban alike. This stand off in Kansas City is worth watching from Sacramento.

Broadband infrastructure and public housing now a common cause

by Steve Blum • , , , , , ,

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.