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

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.