When it comes to broadband policy, much of the attention on California understandably has been focused on its legal win on S.B. 822, its landmark net neutrality law. That court case is likely to head to the 9th Circuit next, and we are optimistic that the state will prevail. But while that law continues its journey through the courts, there are nearly a dozen bills covering broadband policy in California—many proposing massive, positive changes to reinvent how broadband access is delivered to people, and to achieve 100% access with an emphasis on fiber to the home.
This blitzkrieg of legislative activity is understandable. California’s broadband market is undergoing a systemic crisis and market failures. More than 2 million rural Californians are trapped with Frontier Communications’ bankrupt lines. More than 1 million California students lack sufficient broadband access during this pandemic, causing a public education crisis that dwarfs most other states—forcing little kids to do their homework in fibered-up fast-food joint parking lots. And low-income Californians are systemically being skipped by incumbent fiber deployments, likely in violation of the state’s video franchise law banning socioeconomic discrimination.
Three Laws Seek to Make Massive Investments in the Public Broadband Model
Senator Lena Gonzalez, the original author of EFF’s sponsored S.B. 1130, has introduced the next iteration of that effort with S.B. 4. We go into more detail about the legislation here. But, in short, the bill would affirmatively embrace the small local government/non-profit model of broadband by creating a state-backed bond financing program that would enable them to take 30- to 40-year, long-term, low-interest loans to finance fiber. The legislation also makes more modest adjustments to the California Advanced Service Fund grant program, with a handful of concessions agreed to after discussions over a previous version of this bill. But, in concert with the bond program, these changes would still yield a powerful formula for ending the digital divide.
Companion legislation in the Assembly led by Assemblymember Aguiar-Curry (A.B. 14) has also been introduced and indicates a merger of support from both California’s Senate and Assembly on the path forward. This is welcome news, and EFF intends to support both bills as they are brought together. Local governments, particularly in rural California, are eager to take matters into their own hands, having seen the successes of other local governments in states such as Utah. There, 11 local governments banded together to build open access fiber infrastructure to enable local private competition and multi-gigabit services.
Last on the docket is A.B. 34, authored by Assemblymembers Muratsuchi, Garcia, and Santiago. It would add a multi-billion dollar bond initiative to the ballot in November, for voters to decide if the state should empower local communities to build their own solutions. The details of the legislation are still being worked out. But, if it is designed correctly to enable communities well situated to take on multi-decade economic development plans to provision fiber, EFF will support it and let our California members know.
In this session, S.B. 4 and A.B. 14 should be considered the means to enable smaller local government fiber. A.B. 34 will be well-situated to address problems for major cities such as Los Angeles, where systemic digital redlining against low income users is occurring today.
California’s broadband market is undergoing a systemic crisis and market failures.
Legislation to Empower Local Communities to Hold Private Providers Directly Accountable
In addition to legislation about investment, there is also a proposal to revamp the oversight of broadband infrastructure. Understanding why that’s important takes a bit of a dive into fiber history—so buckle in.
Sixteen years ago, Verizon and AT&T attempted to eliminate the process of local negotiation with local governments to deploy broadband, called franchises. The companies claimed that they intended to deploy fiber to the home, but that the old rules got in the way. For decades prior, local communities oversaw broadband deployment, and would drive hard bargains with ISPs—who wished to cherry-pick who they served. The big telecoms went to Congress to try to get federal law to override all local franchising, under a bill called the Communications, Opportunity, Promotion and Enhancement Act of 2005. It passed the House of Representatives but failed when a bipartisan majority in the Senate led by former Senators Olympia Snowe (R-ME) and Byron Dorgan (D-ND) blocked its passage for lacking strong enough net neutrality provisions.
Having failed to eliminate local franchising at the federal level, companies went with a 50-state strategy. Just one short year later in 2006, California obliged the big telecoms by eliminating local franchising power and consolidating it at the state level with its California Public Utilities Commission. Did Californians reap the benefits of fiber to the home throughout the state in exchange for this massive gift? Obviously not. Meanwhile, states like New York that kept local franchise authority are seeing the benefits in their large cities. New York City, for example, recently settled its lawsuit with Verizon in exchange for 500,000 new fiber to the home connections to its low income population. Los Angeles, San Francisco, Oakland and other densely populated urban centers in California would have similar leverage if authority was restored to them.
That brings in S.B. 28, Senator Caballero’s legislative proposal to give ISPs one last opportunity to demonstrate that a statewide franchise approach is the best route forward. Simply put, the bill would audit ISPs compliance with their obligations under the current licenses granted by the state. If they are found to have failed to deliver services as promised to the state in exchange for this regulatory benefit, the state-wide franchise would end, and we would revert back to local franchise authority as New York has now. EFF believes some ISPs are already in violation of their statewide franchise today by opting to deliver fiber to the home to only their high income customers, and have asked both the FCC and states to remedy this problem. State law already forbids discrimination based on socioeconomic status for broadband, but the state has not begun the process of investigating and taking enforcement actions. S.B. 28 could be the means of creating that much needed auditing process.
Other Bills in the Works
EFF has found several other bills that have been introduced in Sacramento that pertain to broadband, but many are lacking details at time of publishing; it is still early in the legislative session. EFF is looking into several of these, though we may not be involved in all of them. But for those interested, here is a list of other bills that have been introduced and a short summary of each:
A.B. 1176 (Garcia/Santiago)– California Connect Fund- The bill would create a program to subsidize the cost of broadband for eligible users like existing Lifeline programs and the Emergency Benefit program that Congress authorized in 2020. Important issues that the CPUC and the FCC should tackle if we subsidize broadband bills include the rising costs of slow legacy infrastructure and the lowering costs of fiber-to-the-home networks. The difference between the two, in terms of quality and cost, are growing substantially. Cable systems offer “Internet essential” programs delivering 50/5 mbps at $10 a month, while municipal fiber is delivering 100/100 mbps at $3 subsidy costs. Notably, the authors of this bill are also the proponents of creating a bond initiative program for public and non-profit broadband, and the two efforts would yield some powerful synergies where cheap (and even free) fast Internet will be a reality.
S.B. 378 – (Gonzalez) – The bill would improve permitting processes for “micro-trenching” fiber. Currently the issue in California is that each local jurisdiction has a different approach to approving new types of trenching—the process of digging and laying wires in public rights of way—that don’t go through the traditional route of laying wires. Whether it's due to a lack of existing space or some other legacy barrier to accessing the existing rights of way to deploy, there is a lot of merit behind creating a uniform process for construction of fiber networks. Predominantly this will affect urban markets that are crowded and should provide a boost to private competition of broadband access. EFF is supportive of this effort and included it in our findings to Governor Newsom more than a year ago as an issue worth addressing in policy.
A.B. 1349 (Mathis) – The bill would authorize churches to be eligible as applicants to the California Advanced Services Fund.
A.B. 1425 (Gipson) – The bill would create a Broadband Public Housing Account to enable the CPUC to spend upwards of $25 million on grants to public housing units. This program recently expired and would require legislation to restore. One policy change the legislature should consider is how the wires are owned in public housing units. It is probably ideal for these buildings to have open-access fiber networks owned by the housing authority rather than to issue grants to subsidize the construction of a monopoly line onto these properties. This would help ensure any public or private ISP can connect and offer services to these residents at lower costs.
S.B. 732 (Bates) – The bill would require the Department of Education to create a program that would allow schools to issue no-cash vouchers to eligible households to assist with distance learning challenges stemming from COVID-19. The bill would also create a multi-billion dollar Rural Broadband Infrastructure Fund through an appropriation from the State Treasury to finance 100/100 mbps services to rural areas. At 100 symmetrical speeds, this program would effectively finance fiber-to-the-home infrastructure as well as fiber to short range wireless towers. This is similar to the way S.B. 1130, a bill EFF sponsored last year, originally approached this problem before it was amended. That is the right policy focus for government spending on infrastructure where each dollar by the tax payer is spent on long term future proofed wires.
S.B. 743 (Bradford) – This legislation would require the Department of Housing and Community Development to establish a grant program for digital inclusion, namely helping with adoption and digital literacy efforts at public housing.