Calif. Assembly Panel Supports Affordability Conditions for State Broadband Grants

A top California communications lawmaker pushed back on industry opposition to a bill that would require $30 affordable internet plans as a condition of receiving California Advanced Services Fund (CASF) infrastructure grants. The Assembly Communications Committee voted 8-2, with two Republicans voting no, to advance SB-424 at a Wednesday hearing. In addition, the committee voted 10-0 for bills that set broadband labor standards (SB-1460) and expand eligibility for CASF public housing broadband grants (SB-1383). All three pieces of legislation, previously passed by the Senate, will go to the Appropriations Committee.

The federal affordable connectivity program’s end "is a real problem" worthy of lawmakers' attention, Chair Tasha Boerner (D) said. The committee amended SB-424, narrowing the requirement to provide affordable plans to the project area where an entity received the grant, rather than its entire service territory. The committee also revised the bill to align requirements for the state-funded CASF infrastructure grant program with the California Public Utilities Commission’s federally funded last-mile program, and to require the CPUC to propose awards of at least $1 million from the state- and federal-funded programs by Jan. 1.

But SB-424 took flak from the telecom industry, including small rural telcos in the California Communications Association (CalCom), CTIA wireless companies, cable entities in the California Broadband & Video Association (CalBroadband) and large wireline ISPs represented by USTelecom. It costs rural ISPs more than $30 monthly to provide each customer 25/3 Mbps, let alone the 100/20 Mbps the CASF infrastructure program requires, said CalCom lobbyist Pam Loomis. "Requiring grantees to offer a high-speed plan at a price point that is not based on any economic analysis of the actual cost of providing service is a recipe for disaster,” she said. "What's the point in using public funds to build last-mile infrastructure if the grantees can't stay solvent long enough to provide service for more than a few years?”

Boerner responded with another question: “What's the point of building last mile if people can't afford to pay for it?" However, the CalCom argument appeared to persuade Republican committee member Laurie Davies, who questioned requiring companies to offer $30 plans if it’s not economical for them.

"This is a flawed policy that will exacerbate the already glacial pace of the [CPUC's] actions to get this money out to where it can be used,” CTIA lobbyist Steve Carlson testified. "The point of CASF is to create infrastructure. To condition that on below-market rates to everyone -- not just income-eligible [people] -- is tantamount to rate regulation" and will discourage industry participation.

Companies don’t have to apply for the public cash if they don’t believe they can meet state conditions, SB-424 sponsor Sen. Maria Durazo (D) said. With the end of ACP, "California must take action to reach the poorest households with access to this basic necessity and to guarantee that there always will be affordable, high-speed quality internet service,” said Durazo: California enrolled about 3 million households in ACP, yet more than 2.8 million eligible households remained unenrolled when the program ended, "with many unaware of its existence."

The committee unanimously supported SB-1460, which would require a group to develop model contract provisions for telecom sector apprenticeships. The committee amended the bill to expressly include ISPs in the group and to clarify that the model contract wouldn’t apply retroactively. Without stronger labor standards, "we may end up with a network that is incomplete or that cannot be kept running,” said sponsor Durazo. Supporters included Communications Workers of America and the California Labor Federation. The amendments address CalBroadband’s concerns, said Amanda Gualderama, CalBroadband director-legislative and regulatory advocacy.

Boerner is concerned the bill may apply only to last-mile projects within the CPUC’s purview and not the middle-mile project at the California Department of Technology, she said. It might take a lot of work in not much time to address that gap, the chair cautioned. However, the bill’s sponsors said they’re up to the task.

The public housing bill aims to encourage more participation by removing a requirement that ISPs provide free internet before receiving grants (see 2404020049). If SB-1383 is enacted, the grants could support projects with low-cost plans, with the CPUC to determine the maximum price. The committee showed enthusiasm for the bill, with members rushing to make a motion and to second it to vote on the bill before sponsor Sen. Steven Bradford (D) even sat down to introduce it. Various Los Angeles officials and CalBroadband also supported the bill before it passed unanimously.