California Bill Aims to Reduce Rural Broadband Barriers

AB 1999 Hearing Testimony, Communications and Conveyance Committee, California Assembly

In response to the FCC’s decision to end federal network neutrality protections, California and other states have introduced bills to fill the gap left by the Commission. Local communities who had flirted with the idea of publicly owned Internet infrastructure in the past have now taken a second and more serious look to counteract the FCC’s harmful policy shift. Assembly Member Ed Chau’s AB 1999, making its way through the legislative process, is opening possibilities for local communities to invest in their own Internet infrastructure. Chau recognizes that publicly owned networks are an option for more than network neutrality protections, especially in rural communities.

Attitude Adjustment

Our Christopher Mitchell travelled to California in May to testify about the bill as it worked its way through the committee process. AB 1999 could indicate that big telephone and cable companies now have less influence in state Capitols around the U.S. than in past years. We recently wrote about a New Hampshire bill that gives us similar hope — a piece of legislation signed by the Governor there that removed restrictions on local investment in broadband networks.

Like New Hampshire's SB 170, AB 1999 allows communities where big national providers don’t want to invest have more control over how they improve local connectivity. If passed, the bill will give California's community service districts the ability to develop public broadband networks and offer services. The language of the bill also requires that any networks developed by community service districts adhere to network neutrality rules.

Rural Communities Serving Themselves

Community service districts (CSD) are independent local governments created to provide services in unincorporated areas of a county. CSDs are typically formed by residents in those areas and created as a way to establish necessary services, such as water and wastewater management, garbage collection, fire protection, conversion of overhead utilities to underground, and a range of other services that might typically be provided by a city or county. A CSD may create an enhanced infrastructure financing district (EIFD) in the same manner as a city or county in order to finance the development of a broadband network.

seal-california.jpg Under the EIFD statute, communities can work together under a Joint Power Authority to make plans for investments that will benefit them all. The collaborating communities have access to different types of financing to invest in infrastructure, includine Tax Increment Financing (TIF) and other bonding mechanisms.

Existing law doesn’t strictly prohibit CSDs from developing broadband networks, but requires them to determine that no person or entity in the private sector is willing to provide those same services before they do so. If a CSD gets past the initial requirement, constructs a network, and later finds out that there is some one willing to provide service, the CSD must sell or lease the infrastructure rather than choose to continue to operate it on its own. AB 1999 would remove those requirements.

Read the rest of the bill in its current form.

States Following A Local Lead?

When Chairman Ajit Pai and the other Republicans on the FCC reversed federal network neutrality protections, contrary to bipartisan objection at all levels of government, they also fueled the interest in local control of Internet infrastructure. Local officials whose rural communities are not benefitting from big ISP investment see elimination of network neutrality as another reason to develop publicly owned networks.

State lawmakers who are not beholden to big cable or telephone companies understand the logic in removing obstacles that prevent their rural constituents from exercising local self-reliance. Bills like AB 1999 and New Hampshire’s SB 170 help with one of the toughest challenges smaller communities face — financing.

At the end of May, AB 1999 passed in the Assembly by a vote of 52 to 20 then went on to the Senate, where it was referred to both the Government and Finance Committee and the Energy, Utilities and Commerce Committee. California’s General Assembly remains in session until August 31, 2018, this year.

To express your support for this bill — especially if you live in rural California — contact your Senator and the Senators on the committees and let them know your thoughts. 

You can listen to 12-minute discussion of the bill in committee above.