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

23 June 2014 by Steve Blum
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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.