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Don’t Let California’s Legislature Extend Broadband Monopolies for Comcast and AT&T

DEEPLINKS BLOG
May 13, 2019

Don’t Let California’s Legislature Extend Broadband Monopolies for Comcast and AT&T

Monopoly Board via Wikimedia Commons user fir0002

Californians have successfully pushed the state's legislature to restore two-thirds of the 2015 Open Internet Order through state laws. Stopping legislation from Assemblymember Lorena Gonzalez that's backed by AT&T and Comcast is the final piece to bringing back those critical protections to promote broadband choice.  

The California Assembly will soon take up A.B. 1366, which would renew a 2011 ISP-backed law that expires this year. That law had the stated goal of promoting choice and competition for Voice over Internet Protocol (VoIP) services. In practice, however, it has sidelined state and local governments from exerting authority over broadband and led to fewer choices for consumers at higher prices.

Today, most Californians face a monopoly for high-speed broadband access. If we let the 2011 law expire, California could instead choose to empower state and local governments to create policies to eliminate local monopolies. Doing so now is even more crucial than it was in 2011, as the FCC no longer oversees the broadband industry.

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Tell Your Legislators Not to Extend Broadband Monopolies

Proponents of the bill hope to mislead legislators by saying it only seeks to protect applications like WhatsApp and Skype from regulation. But the companies that make those products are not supporting this bill. Who is? Companies including Comcast, AT&T, and Verizon, which have spent close to $1 million lobbying on it in 2019.

Broadband competition does not happen in a vacuum. That is why competitors to the big ISPs in California have written in opposition to AB 1366. It's also why dozens of ISPs pleaded with the FCC not to repeal the 2015 Open Internet Order because its policies helped promote competitive entry. To compete, they all need to have the same access that Comcast and AT&T have to the poles and underground conduit to connect the wires that give you broadband. But the FCC no longer gives them equal federal rights, leaving it to states to step up to fill the void.

California state law only grants special infrastructure rights to cable companies and telephone companies. That means Californians have very little access to wholesale open access fiber companies, or any broadband provider that is not a cable TV or telephone company. That differs significantly from places such as Utah, where people have eleven choices for gigabit fiber at around $50 a month. This barrier is so massive that even Google couldn’t overcome it when AT&T blocked their entry in Austin, Texas by denying access to infrastructure that AT&T owned. Notably, that blocking prompted local government intervention, something that is likely not allowed in California until this law expires.

Passing A.B. 1366 would effectively maintain our current dismal status quo. Changing the 2011 law, or just letting it expire, would allow the state and local governments, which were recently empowered to build their own broadband infrastructure, to begin the hard work of giving people choices. For example, EFF has called for policymakers to promote a gigabit fiber for all plan. If California relinquishes its authority over broadband, there is zero chance we'll see statewide competition any time soon.

Without strong public opposition to A.B. 1366, this bill will likely pass. That would deny Californians their broadband choices, unless the federal government intervenes. (We wouldn't recommend holding your breath for that.) California’s Assembly Communications and Conveyance Committee, the same committee that voted to kill the state’s net neutrality law before reversing itself after public outcry, has already uncritically voted to advance this law. You can watch the hearing here, starting at minute 59.

A.B. 1366 Stems from a Long History of Industry Efforts to Avoid Competition

A.B. 1366 is just the latest bill to serve a decades-long American broadband industry agenda aimed to prevent oversight, as well as consolidate, raise prices, and provide inferior service as compared to our international peers. It's connected with the same set of actors that that prompted the FCC to repeal the 2015 Open Internet Order, which stood for competition, privacy, and net neutrality.

How did this happen in California?

It starts at the organization known as the American Legislative Exchange Council (ALEC), which has a long history of drafting bills that protect broadband monopolies, including state laws that ban local governments from providing high-speed fiber to their residents. It is also on record supporting the FCC’s effort to repeal net neutrality and was highly critical of California's net neutrality law, which the state passed in defiance of the big ISP agenda.

ALEC in 2007 produced model legislation to encourage state public utility commissions to abandon their authority over VoIP services. In 2011, then-senator Alex Padilla took up a version of the ALEC law, SB 1161, to expand that prohibition to broadband. This applied to all state and local government entities, except for cities (those were restrained under other state laws until last year). It also cemented regulations that benefit telephone and cable television companies, but not their competitors. Big ISPs loved that idea, and AT&T, Comcast, Verizon, CTIA, and the California Cable and Telecommunications Association spent a combined total of $4.89 million on lobbying during the original passage of SB 1161.

At the time, Padilla justified this drastic step because the FCC regulated these companies—something that, as of 2017, is no longer true thanks to the efforts of A.B. 1366 supporters Comcast, AT&T, and Verizon. ALEC recently re-endorsed the continuation of its model legislation from 2007 for states and while several (but not all) of the major ISPs no longer financially support ALECs work—a split prompted by a 2018 controversy that led Verizon to issue statements condemning racism, white supremacy, and sexism that stemmed from ALEC activities—that certainly doesn’t mean that the big ISPs have stopped pushing for these laws.

California’s Current Law Stifles Broadband Competition and Hurts Vulnerable People

EFF has detailed to great extent how the broadband market has changed from when this bill was first passed and why competition policy is desperately needed in high-speed access. FCC data makes it clear that rural Californians and low-income Californians are the ones most often left behind. The law is so bad that it also affects other issues, such as the need to regulate the prison industry’s exploitive communications practices for inmates and their families.

Ultimately, A.B. 1366 stands in the way of giving consumers good broadband choices. Across the world, every country with broadband that outperforms the United States got there because their governments chose not to deregulate the industry. Instead, those governments promoted access to rights of way infrastructure, prohibited private companies from bottlenecking or crowding out competitors, and set goals and metrics to assess progress. They've accomplished this by deploying policy that is enforced by law rather than relying on monopolists to act benevolently.

If you are tired of having no options in broadband, please write to your legislator soon to stop this bill. We need to let this ISP-drafted law die because all it does is protect broadband monopolies. We need to demand that California promotes competition in broadband, and rejecting this bill is the first step. Tell your representatives to vote no on A.B. 1366.

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