Photo: Tony Webster, Creative Commons license. Via Wikimedia Commons.

Many households here in the remote, far-northern corner of California lag way behind our urban counterparts when it comes to broadband internet speeds. With virtually every aspect of our modern economy now dependent on the web, this speed gap represents a real disadvantage for those with slow service.

Depending on whom you ask, a new bill coauthored by North Coast Assemblymember Jim Wood — AB 1665, aka the “Internet For All” bill — would either help to bridge that digital divide, or it would doom many local residents to slow service for years to come while giving major telecom companies a monopoly on broadband improvement projects.

On his website, Wood boasts that the bill ”will provide $300 million in grant funds to build broadband infrastructure,” and he says priority will be given to rural areas like ours, where the internet is accessible only through dial-up, if it’s accessible at all.

But local broadband advocates say the bill is seriously flawed. They argue that, if signed into law by Governor Jerry Brown, AB 1665 would effectively create a $300 million “slush fund” for major telecom companies like AT&T without requiring them to provide true high-speed internet to those in need.

Sean McLaughlin, executive director of Access Humboldt, said lobbying from major telecom companies including AT&T and Frontier “perverted” a simple funding bill “into a thoughtless gift to private interests.”

Regional internet service providers are also crying foul. John Paul, the CEO of Nevada County-based Spiral Internet, said AB 1665 will “actually delay and prevent 21st Century internet infrastructure deployment in rural California.”

On its face the bill appears fairly simple. It would extend an existing program from the California Public Utilities Commission (CPUC), a program that has been used to finance broadband infrastructure improvements throughout the state with a pot of money called the California Advanced Services Fund (CASF).

Grants from that fund have had a major impact on broadband route diversity in our region. The fiber optic line installed across the State Route 36 corridor, for example, was partially financed through a $5.7 million from the CASF. The CPUC also awarded a $6.6 million CASF grant to the Karuk Tribe in 2013 for its broadband project. And back in March, Wood announced that the Digital 299 project had been awarded a whopping $47 million in CASF funds.

These projects were largely facilitated through an initiative called Redwood Coast Connect, a long-standing and ongoing effort involving a variety of member organizations, all working to close the technology gap in our region. The CASF has been a boon to those efforts.

“Our area has probably been one of the most successful in the state in using this fund,” said Connie Stewart, a key player in Redwood Coast Connect and executive director of the California Center for Rural Policy at Humboldt State University.

First authorized in 2007, the CASF has been renewed and rejiggered several times over the years, with tweaks to extend deadlines, modify application rules and add more money to the fund. The goal: broadband access to at least 98 percent of California households.

In the early days of the fund, major telecom companies like AT&T and Verizon showed little interest in taking advantage of it, so local broadband activists like Stewart courted smaller organizations to be grant applicants, including IP Networks (for the State Route 36 fiber), Vallejo-based Inyo Networks (for the Digital 299 project) and the Karuk and Yurok tribes (for their own fiber line).

Which brings us to the first of two major flaws broadband advocates see in AB 1665: They say it will effectively block these smaller businesses from winning CASF grants while handing regional monopolies to the likes of AT&T and Frontier.

The reason involves a Federal Communications Commission program called the Connect America Fund (CAF), which is sort of like the national version of the CASF. Both AT&T and Frontier have accepted grants during the second phase of CAF funding (CAF II) for broadband deployment in various census blocks in our region.

Now, thanks to major telecom companies’ lobbying efforts, AB 1665 includes a provision that prohibits CASF grants from going to projects in those same census blocks — that is, unless AT&T or Frontier voluntarily tell the state before July 1, 2020, that they’ve finished their CAF deployment there.

Stewart said those companies have no incentive to do so. AT&T, she said, has 300,000 customers eligible for upgrades, but the company only needs to improve broadband for about half of them (151,000) to meet its obligations under the CAF II grant. And it doesn’t have to tell the state which half it plans to help. “So unless they voluntarily tell us they’re not going in” somewhere, she said, “no one can compete with them” — at least not until 2020 or later.

McLaughlin said this amounts to giving the major telecoms the right of first refusal. 

“They took a program designed to fill the gaps left by the major players … and diverted it to the companies that left us in the lurch in the first place,” he said.

Michael Ort is the CEO of Inyo Networks, the company behind the Digital 299 project, and he, too, is baffled by this provision, which he believes will prevent smaller companies like his from completing exactly this type of project in the future. “One has to wonder why the authors of this bill would not want all resources brought to bear on solving the digital divide,” Ort said.

The other major complaint about the bill regards the way it defines broadband. How fast does your internet need to be for it to be considered broadband?

‘It’s not about watching Netflix. It’s about the fundamental capability of human beings interacting in the cyber world.’
-Mike Ort, CEO of Inyo Networks

Back in 2015, the FCC changed its own definition, raising the minimum download speed to 25 Mbps and the minimum upload speed to 3 Mbps. But the agency then had trouble getting applicants for CAF II broadband improvement projects. Stewart said AT&T approached the FCC with a proposition. 

”They said, ‘OK, FCC, if we can agree that we only have to meet a feed of 10 [Mbps] down and 1 [Mbps] up, we will take this money,” Stewart said. “So the FCC cut a deal with the devil.”

Unlike the previous FCC threshold speeds of 25/3, which requires digging trenches to install fiber optic lines, 10/1 service can be delivered wirelessly, which is much cheaper and easier.

It just so happened that AT&T had recently acquired DirecTV, and DirectTV’s satellite service can deliver 10/1. In August of 2015, AT&T accepted $427 million CAF II funding in exchange for providing 10/1 service to 2.2 million rural locations across 18 states, thus greatly expanding its DirecTV customer base.

Verizon, meanwhile, sold all of its wireline facilities in California, Florida and Texas to Frontier.

Cut back to AB 1665: AT&T and Frontier lobbied Wood and the other co-authors, urging them to accept this lower standard for broadband speeds. And, indeed, in its final form the bill defines broadband speeds as just 10 Mbps down and 1 Mbps up. Its threshold for deeming a household “unserved” by broadband is even lower — 6 Mbps down and 1 Mbps up.

Under that definition, AT&T and Frontier would only have to provide broadband service to 223 households in our three-county region to meet the 98 percent coverage goal established by the state there would only be 223 customers in the entire three-county region that aren’t locked up in terms of grant funding eligibility by AT&T or Frontier. (They’re probably all scattered in rural Trinity County, Stewart said.) And those companies wouldn’t have to do any service upgrades in Mendocino and Sonoma Counties. That’s according to an analysis by the Senate Energy, Utilities and Communications Committee. 

Ort equated this to claiming victory by moving the goalposts. He and other broadband advocates say the difference between 6/1 or 10/1 speeds and true 25/3 broadband is huge and can impact a lot more than streaming television.

“We’re right on the cusp of an enormous expansion of computing power,” Ort said. Those without sufficient broadband speeds will be left behind. “It’s not about watching Netflix,” Ort said. “It’s about the fundamental capability of human beings interacting in the cyber world.”

Stewart agreed. “With 10/1 [speeds] you’re not doing economic development,” she said. “You’re not an architect; you’re not running a website business or a doctor’s office; your kids are not taking the competency test; your hotel is not offering open wireless to guests … .” The list goes on.

And it’s not just local advocates who say the bill should be rejected. The Central Coast Broadband Consortium, which covers Monterey, Santa Cruz and San Benito counties, sent Gov. Brown a letter urging him to veto the legislation.

“The $300 million that AB 1665 puts into the California Advanced Services Fund would be effectively reserved for AT&T and Frontier Communications,” their letter states. It goes on to say that money would merely “subsidize minimal upgrades that don’t meet California’s current broadband standard, [upgrades] that they would otherwise be obligated to finance themselves.” 

The Central Coast Broadband Consortium concludes that the bill would serve to “codify California’s digital divide” and “lock rural areas into 1990s technology for generations to come.”

The Outpost reached out to Wood for a response to these criticisms. Here is the statement forwarded by his office:

“I continue to lack a clear understanding of some of the concerns I have heard and read about AB 1665,” said Assemblymember Jim Wood (D-Healdsburg), a co-author of the bill. “We worked with a broad group of stakeholders, intentionally, to assure that such a significant program would reach the Governor’s desk with a lot of support. After 9 months of meetings and negotiations and after final amendments were made to the bill, we received support from the California Emerging Technology Fund (CETF), which works closely with the regional consortia.

“I have been consistent in my goal of providing priority to totally unserved areas to get broadband access, and when you have limited dollars and limited a limited timeframe, the author and co-authors believed this bill, in its final form, was the best approach. I have also continued to say that half the battle was getting the [CASF] program renewed and the other half will be to watch carefully how the PUC administers it. If they are not responding as the group of legislators intended, we will intervene. I respectfully disagree with some of the groups that that this is a giveaway to the large telecoms that will install low-speed infrastructure.”

Senator Mike McGuire, meanwhile, was one of just a handful of state legislators to vote “no” on the bill, and local broadband advocates have given him kudos for that.

“I know this has been a challenging issue for all involved,” McGuire told the Outpost in a written statement. “That said, every broadband expert on the North Coast had significant concerns about the bill because they believe it is a bad deal for our communities. We will continue to push hard – with all involved – to strengthen broadband connectivity in every corner of our big and beautiful district.” 

Stewart, Ort and others have reached out to Brown’s office urging him to veto the bill, but they say they’re worried that their voices will be drowned out by the major players that helped to draft this legislation.

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Addendum:

Here’s more on the feds moving the broadband goalposts. (H/t LoCO commenter “Mercy Me Maybel!”)