California Bill Would Make New Broadband Networks More Expensive

The state of California is primed to bring 21st-century fiber access at affordable rates to every Californian. Last year’s unanimous passage of S.B. 156, a historic multi-billion investment in broadband, means every California community has the resources available to chart a long-term course toward building fiber networks. The Department of Commerce’s recent National Telecommunications Information Administration (NTIA) proposal to allocate $48 billion from the bipartisan infrastructure bill for building broadband networks also supplements California’s efforts by centering affordability and future-proof fiber in its disbursement policy. Lastly, the California Public Utilities Commission (CPUC) criteria to access federal funding further codifies a commitment toward affordability and fiber infrastructure for all.

All of these efforts will help bring every Californian affordable fiber internet access. But a bill in the California legislature threatens to undo all of that good work. A.B. 2749, authored by Assemblymember Quirk-Silva, would prohibit the CPUC from requiring providers to offer affordable service to all Californians, and force them to wrongly treat fixed wireless offerings as equivalent to fiber infrastructure. It would also place a completely arbitrary 180-day review shot-clock on the review of applications to federal funding, which will short-circuit public provider efforts to deliver fiber.

All these provisions run contrary to both the established goals of the Biden Administration and the Newsom administration to deliver affordable, future-proof fiber to all. A.B. 2749 has passed the Assembly and is now headed to the Senate. If this bill—which is supported by industry providers like AT&T and Frontier Communications—were to pass, areas that currently do not even have basic service, primarily rural and urban poor areas, would suffer most of all.

A.B. 2749 Cuts Off Affordability to Most Californians 

The CPUC is supposed to provide taxpayer-funded grants to companies that build internet infrastructure. The bill prohibits the CPUC from requiring these grantees to offer a service at a fixed price for more than five years. The CPUC is also prohibited from setting a specified rate or setting a ceiling for rates. The only limited exemption to these bans on affordability are for ‘low-income’ households. This means a family of four making less than $55,000 a year would be protected from broadband price gouging, but the vast majority of Californians would not. Put another way, at a time of record inflation, the Californians getting broadband for the first time will be subject to uncontrolled monopoly pricing on infrastructure that their own tax dollars built.

To fully appreciate how egregiously anti-affordability this bill is, however, you need to understand one thing. The CPUC’s evaluation criteria for infrastructure grants heavily favors both a 10-year price commitment and the creation of a $40 plan at 50/20 mbps. (That’s 50 megabits per second for downloads, and 20 for uploads.) This means that the infrastructure built with your taxpayer dollars must provide you at least a $40 service and must maintain that commitment for the first 10 years. Additionally, the CPUC will update and increase the 50/20 mbps standard over time as a response to constantly rising needs and the easy scalability of fiber networks.

A.B. 2749 says the CPUC cannot require internet service providers to provide a basic service tier and regulate the pricing. If it were to pass, your taxpayer dollars will pay an Internet Service Provider’s (ISPs) construction costs and then that ISP can still charge you high rates on the networks built with your money. Despite a supermajority of Americans viewing broadband access to be as important as water and electricity and having no choice in provider, the market is such that you have to grit your teeth and accept the high prices set by monopolistic ISPs. A.B. 2749 would further entrench this exploitative status quo. 

Wireless Service is Not and Will Never Be Equivalent to Fiber

This bill would also force the state, for the purpose of grants, to treat wireless offerings on equal terms with fiber infrastructure. They are not. There is also often an assertion that, given lower population density, rural areas can be covered at much lower costs by wireless networks than by putting cables in the ground. They can not. High-speed wireless depends wholly on excess capacity from underlying fiber wireline infrastructure. In other words, it is impossible to deliver fast wireless without excess multi-gigabit capacity from the wires in the ground.

This is why the Biden Administration’s recent guidance to the states emphasizes that states must deploy fiber into rural areas to ensure long-term economic development. EFF has noted time and again in our research that fiber is the only infrastructure that can be upgraded to achieve the performance needed for decades to come without significant new investment. It is low latency, high-bandwidth, and extremely reliable. Once fiber is built to an area, that area can be cheaply, reliably, and adequately served with future-proofed internet for the next 30-70 years.

It should come as no surprise then that AT&T, one of the nation’s largest wireless providers, is supporting a bill that forces the state to treat wireless as the same as fiber, ignores the fundamental engineering disparities, and takes funding away from building fiber infrastructure to subsidize wireless plans. They’d like nothing more than to pad their profits with taxpayer dollars and hamper competition.

We Need to Build Once and Build Right, Not Create and Impose Arbitrary Deadlines

A.B. 2749’s arbitrary 180-day review deadline for all applications to federal funding is yet another attempt to help out big ISPs. If the CPUC does not affirmatively act on the application within this time period, it would be approved automatically. EFF, in our work with local providers—including public and private providers—and new entrants, find no need for the state to establish a review shot clock. These providers aren’t asking to receive funds more quickly. They are more interested in deploying their networks correctly. They are undergoing extensive feasibility studies and analyses on how to deliver fiber infrastructure to all Californians. They want to build once and build right, so their communities have the affordable, future-proof fiber service they need. 

This arbitrary deadline only benefits those with deep pockets and the resources to flood the CPUC with early applications. This unnecessary deadline will only serve to send money to companies such as AT&T. Without the opportunity for proper, deliberate vetting, on top of the anti-fiber and anti-affordability provisions,this bill will cause the state to squander taxpayer dollars and do very little for broadband access. In effect, the state would waste our once-in-a-generation opportunity to build affordable fiber to serve all Californians. Future-proof fiber is expensive and takes time, but it will be more expensive and take even longer if we waste valuable resources today on broadband options unsuited for long-term economic development.

If we’re going to do it right, A.B. 2749 cannot be passed into law.

Source: California Bill Would Make New Broadband Networks More Expensive

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