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20 Sep 2017

Connected at a Cost: Is the 'Internet for All Now Act' a Lifeline for Rural Communities—or a Big Giveaway to the Telecom Industry?

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Since 2007, the California Legislature has worked to encourage the development of telephone and Internet access through the California Advanced Services Fund. The fund provides financial assistance to both large telecommunications companies—including Frontier, AT&T, Charter and Cox—and independent broadband projects driven by community organizations that partner with smaller Internet service providers.

Thanks in part to the fund, the Legislature has grown closer to its goal of deploying broadband Internet service to 98 percent of Californians by 2017. But as the end of 2017 drew closer, many California legislators wanted to update the broadband-support program. The result: AB 1665, aka the Internet for All Now Act, which was authored by eastern Coachella Valley Assemblymember Eduardo Garcia.

After overwhelming approval in both houses, the bill now sits on the governor’s desk, as of this writing.

“We know that having broadband Internet access improves the state’s economy, enhances educational opportunities, and benefits public safety, (as well as) our medical field and patient care,” Garcia said during a recent phone interview. “Even in the Coachella Valley, civic participation requires a connection to the Internet now. So this law supports a program that invests in and ensures that the infrastructure is in place for the purpose of allowing carriers to connect all these homes, businesses, schools, hospitals, clinics and public safety services in remote areas, allowing them to communicate. It’s vital to what we all do on a daily basis.”

Garcia said the Legislature set the 98 percent connectivity goal about a decade ago. “We have now gotten to about 94 percent or so, and that last (unconnected) percentage happens to be in mostly underdeveloped areas like the eastern Coachella Valley, Imperial County and other rural parts of the state. So that’s what this program will do.”

However, the bill did not make it to the governor’s desk without controversy.

Stephen Blum is an executive team member of the Central Coast Broadband Consortium, a California Public Utilities Commission-funded group engaged in broadband planning and development in the state, He’s also the president of Tellus Venture Associates, his own broadband-development consulting agency. He is not fan of the Internet for All Now Act version that made it to the governor’s desk.

“There have been attempts in the last legislative session and the two previous sessions to put more money into the (CASF) fund, more or less keeping the program as it was,” Blum said. “This year, things changed. The incumbents (large corporate ISPs) including AT&T, Frontier and the California Cable and Telecommunications Association jumped in and said, ‘We want the bill to be X, Y and Z.’ … Assemblymember Eduardo Garcia took it and started adding language that reflected the desires of these cable and telephone company incumbents.

“The bill went through three revisions, and each time, more perks were added for the incumbents. So as it’s written now, AB 1665 is going to put $300 million into a CASF infrastructure grant account and make it virtually impossible for independent projects to be funded. Essentially, then, it becomes a fund for AT&T and Frontier to use at their discretion.”

Blum said some of the changes made to the act baffled him.

“One of the things this bill does that boggles my mind is it lowers California’s broadband speed levels—and it’s a significant change,” he said. “Right now, an area is fundable if there’s no existing service that provides 6 mbps (megabits per second) download and 1.5 mbps upload speeds. That’s the standard. This bill changes it to 1 mbps up. Now, that doesn’t sound like a big deal, but it is, because the difference between 1.5 or 1 mbps up is the difference between 1990 DSL systems and contemporary copper system architecture and electronics. You can take a 1990 DSL system, do relatively minimal upgrades to it, and reach the 6 down, 1 up speed standard required. You can’t get 6 down, 1.5 up without going in and doing substantial work. That’s the change that AT&T and Frontier pushed very hard for, because that allows them to do minimal upgrades in rural areas to meet their obligations. Now they’re going to have to invest even less money—because the state will pay for it.

“If you’re in an area that falls under the CASF umbrella … you’re looking at a future where you’re going to have service somewhere in the 6 to 10 mbps download range, and 1 mbps upload range, and that’s not going to change for 10 to 20 years, because once this stuff is in, there’s no point in upgrading it.”

Garcia defended the changes made to the bill.

“There are places throughout the state that still have absolutely no Internet service whatsoever,” Garcia said. “The intention of the bill is to get people connected. The debate was: Why would we allow for certain areas that are already connected to increase their speed capacity? We laid out a goal, through a bipartisan effort of Republicans and Democrats from both rural and urban parts of the state, to make sure that the primary focus of this legislation was to serve the unserved populations. We had people push back, saying that we should be trying to get higher network speeds in places that already had connectivity, and we wrestled with that. What we decided is that we could (try for higher network speeds) after we connect everybody to some service in the areas still having no service. So, modifications to the bill were made where we were not able to appease everyone, but get enough support to move the bill forward.”

Another controversial aspect of the bill: For “last mile” projects that connect established “mid-mile” broadband pipelines to end users like homes, hospitals or businesses, those end users will have to participate financially in the funding of their access. Is that reasonable or fair when the target population is disadvantaged?

“The thought was that there should be some investment, or ‘skin in the game,’ on everyone’s part in order to be considered for access to CASF grants, and ultimately be connected,” Garcia responded.

The Independent asked whether there is some sort of means test built into the bill in order for disadvantaged end users to obtain financial support via the CASF.

“There is a means test through the CPUC,” Garcia said. “There was some confusion that this bill was attempting to just give people free Internet access—that it was like a welfare-type of program where if you signed up, you got free Internet. That’s nowhere near the real case. We’re talking about infrastructure being developed, and that makes it that much more accessible for people to connect to some type of broadband service.”

Blum said when we spoke that he was hopeful the legislation was not a done deal.

“When it gets to the governor, I think there’s a conversation to be had at that point,” he said. “We think that’s where the final decision will get made, and we feel that’s still an open question.”

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