California bill would make new broadband networks more expensive
The State of California is ready to provide all Californians with access to 21st century fiber optics at affordable rates. Last years unanimous adoption of SB 156, a landmark multi-billion broadband investment, means that every California community has the resources to chart a long-term path toward building fiber networks. The recent National Telecommunications Information Administration (NTIA) of the Department of Commerce proposal Allocating $48 billion of the bipartisan infrastructure bill for building broadband networks also complements California’s efforts by centering affordability and future-proof fiber in its disbursement policy. Finally, the California Public Utilities Commission (CPUC) criteria for accessing federal funding further codifies a commitment to affordability and fiber infrastructure for all.
All of these efforts will help provide affordable fiber internet access to every Californian. But a bill in the California legislature threatens to undo all that good work. AB 2749, authored by Assemblyman Quirk-Silva, would prohibit the CPUC from requiring providers to provide affordable service to all Californians and force them to falsely treat fixed wireless offerings as equivalent to fiber infrastructure. It would also impose a completely arbitrary 180-day review period for reviewing applications for federal funding, which would short-circuit the efforts of public providers to deliver fiber.
All of these provisions go against the established goals of the Biden administration and the Newsom administration to provide affordable and sustainable fiber for all. AB 2749 has passed the Assembly and is now heading to the Senate. If this bill – which is backed by industry providers like AT&T and Frontier Communications – were to pass, areas that currently lack even basic service, primarily rural and poor urban areas, would suffer the more.
AB 2749 cuts affordability for most Californians
The CPUC is supposed to provide taxpayer-funded grants to companies building internet infrastructure. The bill prohibits the CPUC from requiring such recipients to provide service at a fixed price for more than five years. The CPUC is also prohibited from setting a specified rate or setting a cap on rates. The only limited exemption to these affordability prohibitions is for “low-income” households. It means a family of four earning less than $55,000 per year would be protected from broadband price hikes, but not the vast majority of Californians. In other words, in an era of record inflation, Californians getting broadband for the first time will be subject to unchecked monopoly pricing on infrastructure built by their own tax dollars.
However, to fully appreciate how unaffordable this bill is, you need to understand one thing. The CPUC’s evaluation criteria for infrastructure grants strongly favor both a 10-year price commitment and the creation of a $40 50/20 mbps plan. (That’s 50 megabits per second for downloads and 20 for uploads.) This means that the infrastructure built with your taxpayers’ money must provide you with service for at least $40 and must maintain that commitment for the first 10 years. Additionally, the CPUC will update and increase the 50/20 Mbps standard over time in response to constantly growing needs and the ease of scalability of fiber networks.
AB 2749 states that the CPUC cannot require Internet service providers to provide a basic level of service and regulate pricing. If this were to pass, your taxpayers’ money will pay for the costs of building an Internet Service Provider (ISP), and that ISP can still charge you high rates on networks built with your money. Despite a supermajority of americans consider broadband access as important as water and electricity and have no choice of supplier, the market is such that you have to grit your teeth and accept the high prices charged by monopolistic ISPs. AB 2749 would further reinforce this exploitative status quo.
Wireless service is not and will never be equivalent to fiber
This bill would also require the state, for subsidy purposes, to treat wireless offerings on an equal footing with fiber infrastructure. They are not. It is also often claimed that, given the low population density, rural areas can be covered at much lower cost by wireless networks than by putting cables in the ground. They can not. High-speed wireless is entirely dependent on the excess capacity of the underlying wireline-to-fiber infrastructure. In other words, it is impossible to provide a fast wireless connection without excess multi-gigabit capacity from wires in the ground.
That’s why the Biden administration’s recent guidance to states emphasizes that states must deploy fiber in rural areas to ensure long-term economic development. The EFF noted weather and again in our research, 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 installed in an area, that area can be economically, reliably, and adequately served with scalable Internet for the next 30 to 70 years.
It’s no surprise, then, that AT&T, one of the nation’s largest wireless service providers, is backing a bill that requires the state to treat wireless like fiber, ignores fundamental disparities in engineering and withdraws funds from the construction of fiber infrastructure to subsidize wireless plans. They would like nothing more than to inflate their profits with taxpayers’ money and stifle competition.
We must build once and build correctly, not create and impose arbitrary deadlines
AB 2749’s arbitrary 180-day review period for all federal funding applications is another attempt to help large ISPs. If the CPUC does not respond to the request within this period, it will be automatically approved. The EFF, in our work with local suppliers – including public and private suppliers – and new entrants, does not find it necessary for the state to establish a review timer. These providers do not ask to receive the funds faster. They are more interested in properly deploying their networks. They are undergoing extensive feasibility studies and analyzes of 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 delay only benefits those with the deep pockets and resources to flood the CPUC with early applications. This unnecessary delay will only serve to send money to companies like AT&T. Without the ability for proper and deliberate verification, in addition to anti-fiber and anti-affordability provisions, this bill will cause the state to waste taxpayers’ money and do very little for broadband access. . In effect, the state would waste our unique opportunity to build affordable fiber to serve all Californians. Scalable fiber is expensive and time-consuming, but it will more expensive and takes even longer if we are wasting precious resources today on broadband options unsuitable for long-term economic development.
If we want to get it right, AB 2749 cannot be enacted.