Last surviving California broadband subsidy bill goes wobbly

24 April 2017 by Steve Blum
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Broadband infrastructure subsidies are due for a vote on Wednesday at a California assembly committee hearing, but there’s no final text yet. What started out as four placeholder bills targeting the California Advanced Services Fund (CASF) – the state’s primary broadband subsidy program – has dwindled down to one, assembly bill 1665, carried by assemblyman Eduardo Garcia (D – Riverside County).

As of this morning, no updated bill language has been posted. Over the past few months, AB 1665 has been the subject of many meetings between legislators, telephone and cable company lobbyists, and other interests, notably the California Emerging Technology Fund (CETF), which has taken the lead on this bill.

This is the third year in a row that CASF has been on the table – or the chopping block, depending on your point of view – in Sacramento. In 2015 and 2016, cable and telco lobbyists killed proposals to raise California’s broadband speed standard and put more money into CASF.

Toward the end of last year, the tax on telephone bills that pays for CASF was scrapped, after the fund hit its $315 million limit. Of that, $270 million is set aside for broadband infrastructure construction grants. If Race Telecommunications’ $29 million fiber-to-the-home project in Phelan is approved next month, there will be something like $25 million to $30 million left.

Deal points circulated by CETF last week suggest that there’s some level of agreement to add a similar amount of infrastructure subsidy money to the kitty, but details about how it can be spent were lacking.

Frontier Communications and AT&T want their federally-subsidised rural territories, where they have an effective monopoly, protected from competition even though their promised upgrades will not meet California’s current minimum standard of 6 Mbps download and 1.5 Mbps upload speeds, let alone the federal advanced services standard of 25 Mbps down/3 Mbps up. And telco and cable lobbyists alike have pushed back against funding independent middle mile systems, like the recently approved Digital 299 project in northern California.

Incumbent telephone and cable companies have had an effective veto over CASF legislation for the past few years, and AB 1665 appears to be no different. If they are successful in forcing through language that gives them first call on hundreds of millions of tax dollars to pay for substandard infrastructure that they plan to build anyway, and blocks independent middle and last mile projects even when they refuse the money, the result will be worse than no bill at all.