According to Federal Communications Commissioner Brendan Carr, there is more than $800 billion in available funds that could be used for broadband deployment, which is more than enough funding to connect every household across the country that chooses to be online.  The National Technology and Information Administration (NTIA) is in the midst of determining guidance for the $42 billion in Broadband Access and Equity Deployment (BEAD) funds included in the Infrastructure Investment and Jobs Act (IIJA), which apparently will recognize that each state knows best how to spend this money.  But the Department of the Treasury, which released its rules on January 6, 2022, for the use of the $350 billion allocated to states and local governments under the American Rescue Plan Act, sets a one-size-fits-all standard with certain preferences on how to spend that money. 

State and local governments have been busy trying to figure out how to spend the significant amounts of money they already have and will be getting for broadband deployment projects.  Unfortunately, unless modifications are made to California’s plans to spend money on broadband, the state is likely to end up wasting a significant amount of the taxpayers’ money.

California moved quickly in 2021 to start spending some of its ARPA money.  On July 15, 2021, the state legislature passed SB 156, which dedicated more than $6 billion for broadband infrastructure projects, including $3.25 billion for a state-wide open-access middle mile network; $2 billion to create the Federal Funding Account to pay for last-mile grant program for infrastructure projects using money the state received from the American Rescue Plan Act; $750 million for a new Loan Loss Reserve Fund to shore up financing by local governments, tribes, and non-profits so they can secure loans to build and operate government-owned networks; and $50 million in corporate welfare for companies that provide “technical consulting services” to local governments on how to build a government-owned network (GON).  The California plan looks similar in part to the middle-mile network completed nearly a year ago after several delays in Kentucky.

Government-owned broadband networks directly compete against established broadband providers and fail to provide broadband service to unserved and underserved communities across the states.  They increase dependence on government subsidies to keep these GONs operating and raise the debt obligations for taxpayers and local governments.

SB 156 not only favored GONs, but also failed to prioritize truly unserved communities and establish guardrails to prevent wasting taxpayer resources on duplicative overbuilt networks.  The legislature should rectify these shortcomings with new legislation that designates funding first and foremost to areas of the state that have no broadband services, which the Federal Communications Commission defines as a minimum of 25 Mbps download speed and 3 Mbps upload speed (25/3 Mbps).  Once those areas are connected, the funding should then be allocated to underserved communities that have only one broadband service provider offering a minimum of 25/3 Mbps speeds.  Providers should also be strongly encouraged to use the funds to build high-speed broadband in those areas with, at minimum, 100 Mbps download and 20 Mbps upload speeds, which most internet service providers now have the ability to meet or exceed. 

On April 21, 2022, the California Public Utilities Commission (PUC) adopted rules for the $2 billion grant program enacted by SB 156 for the use of the broadband funds that are “focused on building broadband Internet infrastructure for communities without access to Internet service at sufficient and reliable speeds.”  As determined by the new rules, this grant program will fund last-mile broadband infrastructure to build out wireline networks that offer symmetrical 100 Mbps speeds to areas of the state that are unserved or underserved.  The funding will be equally split between urban communities and rural communities considered to be unserved or underserved.  The PUC will initially “allocate $5 million to each county, and then allocate the remaining funding based on each county’s proportionate share of households without access to broadband Internet access service with at least 100 Mbps download speeds.”

According to Broadband Now, nearly 1.3 million Californians currently do not have basic wired broadband available at the minimum of 25/3 Mbps, even though the state is ranked 13th across the country for broadband internet access.  Many of the areas without minimum broadband service are in mostly northern regions of the state where access through fiber connections would be difficult given the terrain, and remoteness of the locations.  As the PUC considers the parameters relating to the funding, it must ensure that Californians without any access to broadband receive funding first in a technology and vendor neutral manner, followed by underserved communities.  The agency must also ensure that none of these funds are wasted on overbuilding networks where ample broadband access already exists.

The PUC and legislators should make sure that more than just fiber-only technology or GONs can qualify for the broadband deployment funding to ensure that counties like Alpine, Colusa, Lassen, Modoc, Plumas, Sierra, Tahama, and Trinity can finally get connected to the world wide web and all the benefits it brings.  These technologies include, but are not limited to cable, fiber, fixed wireless, mobile broadband, satellite internet, and the use of TV white space spectrum.  An all-of-the-above approach to broadband deployment efforts will enable more providers to reach more households and businesses across the state, especially where closing the digital divide has been difficult, like mountainous and rural areas of the state.