California Bill Would Make New Broadband Networks More Expensive

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EFF

The state of California is primed to bring 21st-century fiber access at affordable rates to every Californian. Last year’s unanimous passage of S.B. 156, a historic multi-billion investment in broadband, means every California community has the resources available to chart a long-term course toward building fiber networks. The Department of Commerce’s recent National Telecommunications Information Administration (NTIA) proposal to allocate $48 billion from the bipartisan infrastructure bill for building broadband networks also supplements California’s efforts by centering affordability and future-proof fiber in its disbursement policy. Lastly, the California Public Utilities Commission (CPUC) criteria to access federal funding further codifies a commitment toward affordability and fiber infrastructure for all.

All of these efforts will help bring every Californian affordable fiber internet access. But a bill in the California legislature threatens to undo all of that good work. A.B. 2749, authored by Assemblymember Quirk-Silva, would prohibit the CPUC from requiring providers to offer affordable service to all Californians, and force them to wrongly treat fixed wireless offerings as equivalent to fiber infrastructure. It would also place a completely arbitrary 180-day review shot-clock on the review of applications to federal funding, which will short-circuit public provider efforts to deliver fiber.

The CPUC is supposed to provide taxpayer-funded grants to companies that build internet infrastructure. The bill prohibits the CPUC from requiring these grantees to offer a service at a fixed price for more than five years. The CPUC is also prohibited from setting a specified rate or setting a ceiling for rates. The only limited exemption to these bans on affordability are for ‘low-income’ households. This means a family of four making less than $55,000 a year would be protected from broadband price gouging, but the vast majority of Californians would not. Put another way, at a time of record inflation, the Californians getting broadband for the first time will be subject to uncontrolled monopoly pricing on infrastructure that their own tax dollars built.

A.B. 2749 says the CPUC cannot require internet service providers to provide a basic service tier and regulate the pricing. If it were to pass, your taxpayer dollars will pay an Internet Service Provider’s (ISPs) construction costs and then that ISP can still charge you high rates on the networks built with your money. Despite a supermajority of Americans viewing broadband access to be as important as water and electricity and having no choice in provider, the market is such that you have to grit your teeth and accept the high prices set by monopolistic ISPs. A.B. 2749 would further entrench this exploitative status quo.