Telcos, cable delete fiber, add more pork to rival broadband subsidy bill in California legislature

29 July 2020 by Steve Blum
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Pure pork night 625

Frontier Communications grabs a bankruptcy bailout and cable companies get subsidies to reach high income homes in the latest version of assembly bill 570, posted on the California legislature’s website on Monday. It’s big telecom’s alternative to senate bill 1130, which would raise California’s minimum broadband standard to symmetrical 25 Mbps fiber-ish speeds.

AB 570 is authored by assemblywoman Cecilia Aguiar-Curry (D – Yolo). Through the end of last year, she collected $83,000 from companies in the communications and electronics sector, including $24,000 from AT&T and $12,000 from Comcast, Charter Communications and other cable companies, according to the website. That’s more than some of the members of key telecom policy committees in the California legislature were paid by industry lobbyists.

Big cable companies slipped in a small change into AB 570 that could bring them big, taxpayer-subsidised profits. The last time monopoly-model incumbents rewrote CASF rules, they allowed cable companies to launder grant money through consumers via a “line extension program”. The California Public Utilities Commission now limits eligibility to low income homes. That restriction would disappear, per Monday’s version.

The bill still locks Californians into slow, 1990s style Internet service – if the best you can get is 6 Mbps download and 1 Mbps upload speeds, then you are deemed to be sufficiently served. If you don’t have that level of service available, then Frontier could get money from the California Advanced Services Fund (CASF) to upgrade you to something that’s “adequate to support distance learning and telework”, according to the latest amendments to AB 570. Which might mean 25 Mbps down/3 Mbps up – that DSL speed tier gets priority over costlier but faster technology in the bill – or it could mean slower speeds.

With minimal central office upgrades, Frontier can push 25 Mbps down/3 Mbps up speeds to nearby customers via its decaying copper networks. Homes further down the line will get much slower adequate speeds. AT&T could do the same, but in recent years it hasn’t gone after CASF grants.

Aguiar-Curry is AB 570’s nominal author, but it’s ghostwritten by the California Emerging Technology Fund (CETF), a non-profit funded and advised by major cable and telephone companies. The new version of the bill sets up CETF for a $500,000 a year contract to manage broadband subscription sales programs, which are also subsidised by CASF.

The California senate’s energy, utilities and communications committee is the next stop for AB 570. Whether it gets heard at the committee’s scheduled meeting on Monday will partly depend on how assembly and senate leaders resolve their current turf war.

Update, 29 July 2020: The senate energy, utilities and communications committee put AB 570 on the agenda for its Monday, 3 August 2020 meeting. It’ll happen after the senate floor session is over. That probably means late afternoon, after the assembly communications and conveyances committee votes on senate bill 1130.

I’ve advocated for SB 1130, and for other useful changes to CASF. I am involved and proud of it. I am not a disinterested commentator. Take it for what it’s worth.