The Road (and Funding) to More California Broadband – Pacific Research Institute

The Road (and Funding) to More California Broadband


In August, I detailed the $42 billion broadband grant program proposed in the $3.5 trillion infrastructure package. Not to be outdone, California is pursuing its own broadband grant program expansion.

Connectivity to the internet is a must for education and every industry, especially after going through the last 18 months of pandemic and lockdowns.

According to BroadbandNow, California is ranked 13th in the nation in broadband access with 94.1 percent of Californians able to access broadband services. BroadbandNow cites that 1.3 million people don’t have access to internet speeds of at least 25 Mbps, 1.5 million only have access to one internet service provider, 889,000 residents have no wired internet service providers and the state is one of the worst for high-speed internet service.

In July, Governor Gavin Newsom signed Senate Bill 156, a three-year, $6 billion investment in open source broadband connectivity for under-served residential areas or places with no access. Like the federal proposal, the funding will focus on “middle,” and “last mile” broadband access.

As a reminder, “middle mile” is an industry name used to describe “the network infrastructure that connects local networks to other network service providers, major telecom carriers, and the internet.” And the last mile is connecting broadband to customers.

SB 156 creates a new state agency, the Office of Broadband and Digital Literacy under the California Department of Technology.

More than $4 billion of the program’s funding will come from the federal American Rescue Plan Act.

The new law creates a new position for a Deputy Director for Broadband, as well as a nine-person broadband advisory committee. The Office of Broadband and Digital Literacy will also appoint a third-party administrator to oversee the creation and maintenance of the broadband program and maintain a continually funded “Loan Loss Reserve Fund” to reimburse local government agencies or non-profits for broadband deployment.

A companion bill, Senate Bill 4, is awaiting Gov. Newsom’s signature or veto, and would make substantial changes to the California Advanced Services Fund (CASF), the main grant program used to fund broadband.

Established in 2007 and run by the Public Utilities Commission, the state grant program funds infrastructure, broadband, and housing grants through surcharges on telecommunication carriers, and in turn, consumers. SB 4 would boost its coffers from $82.5 million to $150 million annually. Meanwhile, another bill also awaiting Newsom’s signature would expands the program’s end date by a decade to 2032.

It will take years to know if the 2021 broadband bills will bring and the California Advanced Services Fund will bring faster internet to California.

One question that should always be asked is whether a state-owned broadband system is the answer. More than 94 percent of Californians have access to broadband services. The more than three million Californians that don’t or have substandard services have their broadband improved through state programs.

But what would the state do that most internet service providers can’t right now?

California is also one of the best states for access to low-priced broadband plans at 70 percent; with the national average is around 50 percent. Large population areas like Los Angeles, San Francisco, and San Jose have more than 40 broadband

Broadband access can always be better, and the technology is always changing, but can it be argued that the state can stand-up a broadband system cheaper, better, and quicker than private internet service providers?

There are holes in the state’s broadband coverage and a lack of coverage should be addressed. But a close eye should be kept on the state overhaul of broadband and what it will produce.

If it’s not clear what is happening with state broadband in a couple years, remember the old phrase that never disappoints, “Follow the money.”

Evan Harris is the media relations and outreach manager at PRI.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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