Should California broadband subsidies backfill big telco, cable marketing budgets?

8 April 2018 by Steve Blum
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When lobbyists for telephone and cable companies convinced biddable lawmakers to turn California’s taxpayer-funded broadband subsidy program – the California Advanced Services Fund (CASF) – into their own private, $300 million piggy bank last year, some smaller programs were included. Assembly bill 1665 created a $20 million “broadband adoption” kitty that’s supposed to go toward increasing the number of people who use the Internet. The California Public Utilities Commission is writing new rules to guide how that money is spent, and many organisations, incumbents and non-profit corporations included, have offered recommendations for doing so.

In the latest round of comments, two consumer advocacy groups, the Utility Reform Network (TURN) and Greenlining, hit back at the suggestion that broadband adoption programs – digital literacy classes, broadband access efforts such as computer centers and equipment giveaways, and other marketing initiatives – should, or at least could be, used to fund “partnerships between grantees and incumbent Internet Service Providers”. The money would, in effect, supplement incumbents’ marketing budgets. That recommendation was made by the California Emerging Technology Fund, which is a non-profit organisation largely funded these days via adoption programs paid for by Charter Communications and Frontier Communications.

The two groups pointed out that incumbents – a gang that includes Charter, Frontier, AT&T and Comcast – have reduced-rate broadband programs for low income households. They’re required to offer those rates as a condition imposed on them by regulators when they bought up other companies…

Those merger requirements have end dates and it is unclear whether any of those incumbent providers will continue to provide a low-income broadband service option after the merger requirements expire.

It is also critical that applicants do not use the CASF grant money to advantage a particular carrier. While partnerships should be allowed and can have value, they cannot be designed to provide an exclusive channel for the carrier-partner to otherwise upsell services, provide unsatisfactory services, or provide broadband with short-term discounts that may expire.

Applications that propose partnerships should be closely reviewed and the Commission should allow “well-meaning and laudable” start-ups and smaller broadband providers, who have identified a need to close the digital divide in their communities and want to take action to help their communities, to apply for CASF funds.

Just so.

Assuming the CPUC stays on schedule, the requirements for the new broadband adoption grant program should be finalised by the end of June 2017.

Phase 1 Reply Comments – filed 2 April 2018

California Cable and Telecommunications Association
California Emerging Technology Fund
North Bay North Coast Broadband Consortium
Office of Ratepayer Advocates
The Utility Reform Network and the Greenlining Institute

Click here to see California Public Utilities Commission documents, public comments and reply comments, and other information regarding the 2017-2018 overhaul of California Advanced Services Fund programs.