The California Legislature Must Stay The Course on Broadband Funding

As California, the world’s fifth-largest economy, navigates a changing landscape, including a budget deficit, it’s important that the legislature not take shortcuts that rob the state of future-proof technology. Instead of backing down, the California legislature must continue on the path for broadband funding that it has already started down. Doing so would ensure a future of high-speed, low-cost internet access for all Californians.

In 2021 Governor Newsom signed into law S.B. 156, which promised a $6-billion multi-year investment toward building broadband infrastructure in California. This $6 billion, together with the incoming federal Broadband Equity Access and Deployment (BEAD) dollars, is enough money to deliver 21st-century-ready broadband access to virtually all Californians. This is badly needed. California, and indeed much of the United States, pays far more for far poorer internet than other similarly developed nations.

Unfortunately, the California State Assembly plans to cut $625 million in last-mile broadband infrastructure funding, defer $950 million over the next three fiscal years, and reduce state middle mile fiber funding by an additional $125 million. Any cut to broadband funding undermines California’s ability to fulfill the promise of 21st-century broadband access to all, which then undercuts both the economic development opportunities of building and having 21st century broadband access and the state’s ability to address the systemic inequalities that arise from digital discrimination. 

In its proposal (page 113) the Assembly seeks to offset state expenditure with federal BEAD dollars to come. That is both directly counter to the rules that determine BEAD funding and gives up the chance to cover both unserved and underserved Californians. Instead of simply seeking to cover uncovered areas, the combined funds of original bill and the BEAD money would allow all Californians access to high-speed, low-cost internet. As it stands, by cutting the funding, the California legislature risks losing the BEAD money as well, turning a win-win into a lose-lose.

By directly contradicting guidance from the National Telecommunications Information Administration (NTIA), this proposal endangers California’s ability to receive BEAD dollars altogether. NTIA’s guidance (page 82) expressly states federal dollars cannot be used to “supplant…amounts that the eligible entity would otherwise make available for purposes for which the grant funds may be used.” Should California take the Assembly’s approach of substituting state dollars that would have been spent on broadband with federal, the NTIA is fully within their right to withhold federal funding from California. This lack of funds would undermine all efforts to deliver internet access across the state.

The existing state budget under S.B. 156 was passed before BEAD even existed. S.B. 156 made available enough funding to deploy broadband to every “unserved” Californian with fiber optic infrastructure. This was established by utilizing detailed cost model data collected by the state government to project the total budget needed when accounting for the high one-time sunk cost of infrastructure.

BEAD presents an opportunity to invest in low-income urban neighborhoods that have legacy access and also need to be upgraded to fiber optic infrastructure. California would be able to utilize BEAD funding to provide fiber optic connectivity to “underserved” Californians (residents lacking broadband access that deliver speeds up to 100/20 mbps). Typically, these residents are low-income and reside in our major urban markets such as Los Angeles, San Francisco, San Diego, and Oakland.  If the state cuts down on its own investment and utilizes these federal dollars to primarily service the “unserved,” the state would be taking away grant funds from urban communities entitled to those funds under the federal law.

The state charted the right course to deliver 21st century broadband infrastructure to all when it planned to supplement the investments made in S.B. 156 with BEAD funds. Cutting down the total amount available only serves to limit the ability of public investment to deliver fiber infrastructure throughout the state. As the Biden Administration noted as part of its own broadband infrastructure guidance, “only end-to-end fiber” can meet the long-term connectivity and economic needs of communities. We ask the California legislature to not throw away our once-in-a-lifetime shot to create lasting economic opportunities and address systemic harms across the state for generations to come.