California senate committee lets industry lobbyists rewrite broadband subsidy rules

8 May 2013 by Steve Blum
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Oh, please, monsieur. It is a little game we play. They put it on the bill, I tear up the bill. It is very convenient.

The latest version of a proposed bill to add money to the California Advanced Services Fund (CASF) and extend eligibility beyond traditional telephone companies is bad news for everyone except incumbent cable and telephone companies.

Last week, the senate energy, utilities and communications committee approved senate bill 740 on the basis of a promise by the measure’s author, Alex Padilla (D – Los Angeles), to make it more to the liking of the lobbyists from AT&T, Verizon, Frontier and the cable industry who testified at the hearing.

Padilla’s word was good. The new language, made public this morning, makes it difficult, if not impossible, for competitors to use CASF money to go up against incumbents, even when they are delivering substandard service. Key changes are:

  • No new money goes into CASF, effectively capping the money available for broadband infrastructure grants at the current $158 million figure. Money might be added later, but the conditions attached make it very unlikely.
  • Priority is given to funding projects in areas that have no broadband service at all, putting in doubt the eligibility of projects that would bring poor service up to standard (currently 6 Mbps down and 1.5 Mbps up).
  • A middle mile project can only be funded if it serves homes that are completely unreached by current providers, including mobile and fixed wireless companies, regardless of the quality of service delivered. Possibly including satellite service too, which would make middle mile project funding impossible.
  • Even tighter restrictions are put on cities and counties, all but killing any hope of CASF subsidies for municipal broadband projects.

The bill has a long way to go before anything is finalised. At least one more committee will take a look and it needs two-thirds of the state senate to vote to approve it. Then it heads to the assembly, where the process starts over again. And where another proposed bill – AB 1299 – would give telephone and, particularly, cable companies even more perks from CASF.

Contrary to recommendations made by a committee analyst and given lip service by Padilla, the state legislature is primed to conclude that “Internet service at any old speed” is “good enough” for all Californians.