Last week, SB 740 (Padilla) addressing broadband infrastructure expansion in California was heard at a hearing and was voted out, 10-0-1, of the Energy, Utilities and Communications Committee of the State Senate, to advance to the Committee on Appropriations.
SB 740 modifies current eligibility requirements and funding for the California Advanced Services Fund (CASF) to support broadband infrastructure in the most remote areas of the state that do not have high speed Internet access. In 2006, the California Public Utilities Commission created the CASF program to bring broadband access to both "unserved areas" (areas lacking Internet entirely), and also to "underserved areas" (areas with slow broadband speeds that have been deemed inadequate to handle modern day uses of the Internet, for example, video streaming). In 2007, the California Broadband Task Force reported that about 1.4 million (4%) of Californians lacked broadband and that nearly 50 percent had only low-speed Internet access. In 2007, SB 1193 (Padilla) codified the CASF program. CASF grants may cover up to 70% of broadband infrastructure projects that meet certain CPUC requirements and is funded by a small customer surcharge in intrastate communications service.
SB 740 gives the CPUC new flexibility to award CASF grants to entities, such as Wireless Internet Service Providers (WISPs), government agencies, and tribal entities, that are not regulated by the CPUC but may provide broadband access in the remaining areas, advancing state policy to connect all Californians to the Internet. Further, the bill proposes to authorize another $100 million with annual collections not to exceed $25 million for such projects through 2020. At present, CASF currently has authorized funding capped at $225 million through 2015, with $41 million already awarded and an additional $14 million in pending applications. In February 2013, the CPUC received new applications seeking a total of more than $200 million for new broadband projects, including two "middle mile" projects to bring fiber optic backbone infrastructure to far north California counties projects ($119 million) and to the central coast areas east of Monterey ($12 million). The CPUC staff is evaluating those applications, and depending on its decision expected sometime in the summer, the new CASF funding amount contained in SB 740 may be adjusted downwards later in the legislative process.
At the hearing, incumbent broadband providers Verizon, AT&T and Frontier lodged some concerns, but not opposition, to the bill. ("Overbuilding" refers to building more or excessive broadband infrastructure than necessary.) Charlie Born, Manager Government and External Affairs for Frontier Communications, expressed concerns that SB 740 is moving away from targeting CASF grants to the remaining unserved area of the state, and instead has been focused on underserved areas, resulting in "network duplication with those who are over-building choice areas and taking full advantage of public program dollars for competitive purposes while other customers lack any broadband availability." He said Frontier has asked the bill be amended to: (1) maintain the fund at the existing size, (2) limit participants to already existing commercial broadband providers, (3) not allow grants to be used to fund the building of a network where a broadband network already exists and is being used to provide broadband service to end user customers, (4) adopt the FCC’s Connect America Fund benchmark definition of broadband service (4 megabits per second (Mbps) downstream and 1 Mbps upstream), and (5) prioritize CASF grants for unserved areas.
Rural broadband consortia representatives have raised issues with the CPUC about geographic areas that the carriers claim are served on broadband maps filed with federal and state authorities but where in fact no or very spotty Internet service exists. They want the CASF expanded to new entities such as a wireless Internet Service Provider, a government coop, or a tribal authority that are willing to build new infrastructure to serve the very rural areas. Further, the CPUC updated the CASF program to increase the speed from the initial 3 Mbps downstream/1 Mbps upstream speed, to a faster broadband speed of 6 Mbps downstream/1 Mbps upstream. According to his staff, Senator Padilla agreed to amendments to address some of the concerns. These amendments are expected to be released this week.
Currently, the CPUC filing rules do give a preference to unserved areas being funded first, and then underserved areas. However, the bulk of CASF funding to date has been to underserved areas, and not unserved areas.
