Calif. Lawmakers Caution CPUC on Last-Mile Funding Rules

California legislators urged the Public Utilities Commission to pause before approving rules for a $2 billion last-mile federal funding account (FFA) required by the state’s $6 billion broadband law. At a hearing livestreamed Wednesday, Assembly Communications Committee members grilled CPUC Communications Division Director Rob Osborn on a proposed rule to prevent ISPs from increasing prices for FFA-funded plans for 10 years.

California commissioners voted 5-0 Thursday to delay considering the proposed FFA rules until an April 21 meeting. President Alice Reynolds made the motion to hold the item without saying why. A CPUC spokesperson also gave no reason. The livestreamed CPUC event was commissioners’ first in-person meeting since going virtual in the COVID-19 pandemic.

The CPUC might want to reconsider its last-mile fund proposal, said the Assembly panel’s Chair Sharon Quirk-Silva (D) Wednesday. She said she understood the commission planned to vote the next day. "We want to move forward, but we also don't want to move forward if we're not confident on some of the measures.” Big ISPs warned the CPUC last month that proposed price and speed requirements could discourage participation (see 2203230051). Consumer groups urged the commission to keep rate limits (see 2203290041).

The CPUC adjusted the 10-year price cap concept in a revised proposed decision (PD) released Tuesday in docket R.20-09-001. It now says, “Applicants must commit that the prices they propose to charge will not exceed the amount provided [in] their applications. Prices may be lowered without Commission approval, but may not be increased to more than the committed pricing.” And grant recipients could seek a waiver if they need to raise prices, the revision said.

The revised PD also tweaked the proposed challenge process. It would now require an attestation that households in a challenged area can get 100 Mbps download and 20 Mbps upload or 100/100 Mbps speeds. And it clarified that grant recipients must report how many customers are enrolled in low-income broadband plans. Tribes and local governments wouldn’t have to get a letter of credit under another edit. They would have to “demonstrate administrative capability and expertise in financial administration” and show they have relationships with financial advisers, broadband infrastructure feasibility experts and experienced public or nonprofit broadband operators, it said: Such applications would need approval by commission resolution.

Assemblymember Tasha Boerner Horvath (D) wouldn’t apply for funding with a 10-year price freeze attached, she said at Wednesday's hearing. Agreeing it should be more than the two years required in the existing California Advanced Services Fund program, Horvath suggested five years. A decade “seems a very long time to expect that anybody would find that financially feasible, even with public funding.” Noting inflation concerns in the economy, Quirk-Silva (D) seconded a five-year freeze.

“We may end up with good intentions and bankruptcy,” said Vice Chair Jim Patterson (R). With the 10-year proposal, the CPUC is "creating a template that is a disincentive to the very private sector groups you are trying to attract.” The CPUC’s Osborn said, “We're not planning on companies going bankrupt.” Horvath replied that the agency should always plan for that. Osborn pointed out that cost-per-megabit has declined 90% over the past 10 years, and the revised PD includes a waiver process.

Patterson remained skeptical. “Everyone on this dais wants this done,” he said. “How can you assure members here that the PUC is not going to be the hold up in all of this?”

The Assembly committee cleared a digital equity bill. No members voted against AB-2753, which would require the CPUC to adopt rules on equal access to broadband. "Digital access is a 21st Century civil right and should be treated as such,” said Assembly Majority Leader Eloise Gomez Reyes (D), the bill’s author. The California Emerging Technology Fund supported the bill, but the California Cable and Telecommunications Association opposed. “Not that we’re opposed to digital equity,” said CCTA Vice President-Governmental Affairs Bernie Orozco, but the bill could lead to much litigation and duplicates existing FCC and CPUC proceedings on digital redlining.

The panel voted 12-0 for another bill to require next-generation 911 vendors to be based in the U.S. AB-2732 goes next to the Emergency Management Committee. Members also voted unanimously to send to the floor AB-2906, which would exempt schools contacting students’ parents or guardians using automatic dialing devices from state robocall restrictions.

The Assembly Appropriations Committee voted 9-4 Wednesday to clear AB-2635 requiring high-definition public, educational and government access channels (see 2203240039).