In his $100 billion “California Comeback Plan”, California Gov. Gavin Newsom is proposing to devote $7 billion to invest in expanding broadband access over the next three years, with $4 billion of that to be used for constructing a statewide middle-mile, open access fiber network.

The $7 billion earmarked for broadband in the budget proposal, referred to as the “May Revision” [pdf], specifically includes:

• $4 billion for a statewide middle-mile, open access fiber network to connect Census Designated Places (CDP) which lack access to broadband service capable of providing 100 Megabit per second (Mbps) downstream 

• $500 million for a Loan Loss Reserve Account, a public financing program to assist local governments, Tribes, and nonprofits financing new municipal fiber networks

• $500 million for one-time payments to broadband providers serving rural areas where it is more costly to build community networks

• $2 billion for the California Advanced Services Fund (CASF) to incent existing and new Internet Service Providers to build last-mile infrastructure

Gov. Newsom’s infrastructure plan now heads to the State Legislature, where it must be voted on by June 15.

Newsom’s plan is to allocate this funding over a period of several years, allotting $2 billion of federal Rescue Plan funds in Fiscal Year 2021-22, and $1.5 billion in state General Fund resources combined with $3.5 billion in Rescue Plans funds in Fiscal Year 2022-23. To fund the overall $100 billion budget proposal, if passed, the state would combine a total of $25 billion in federal relief funding with $75.7 billion from the state’s budget surplus.

“Let’s get this done once and for all, so that no future administration is talking about the scourge of the digital divide,” said Gov. Newsom, in a press conference on Friday. “This is what the federal stimulus from my perspective was all about: catalytic investments to make generational change. This is one of those investments.”

Newsom’s Plan Provides Technical Assistance Teams and Loans for Communities

Snapshot

Washington Governor pledges to sign Public Broadband Act

Maine hearing will reveal State Legislature’s willingness to introduce competition to incumbent ISPs

California bill amended to remove bond initiative backing public infrastructure projects of local communities 

The State Scene

Washington

Two pieces of legislation aimed at expanding public broadband authority, H.B. 1336 and S.B. 5383, have been delivered to Washington Gov. Jay Islee to consider signing into law. Rep. Drew Hansen, the primary sponsor of H.B. 1336 recently told GeekWire that he “expects the governor to sign both.”

H.B. 1336 would give Washington’s cities, towns, counties, district ports and Public Utility Districts (PUDs) unrestricted authority to provide Internet services directly to end-users, while S.B. 5383, as a result of a series of amendments, deals largely with what information PUDs and ports have to provide to the state broadband office before offering service in unserved regions. 

There will be a meeting between the governor and the sponsors of the two bills on Thursday, which will likely determine their fate. Although arguments about how the two bills will interplay are continuing throughout the halls of the State Legislature in Olympia, the prevailing legal interpretation is that the finalized versions of the bills do not conflict. If both bills are signed, and discrepancies are later discovered to be an issue, it will prompt the State Legislature to convene in the future to standardize differences between the legislation. 

Snapshot

This week’s community broadband state legislative roundup revisits and provides updates on important bills moving through the state legislatures in Washington, Oklahoma, and California.  

The State Scene 

Washington 

We’ve been closely covering S.B. 5383 and H.B. 1336, two bills in Washington state that would give Public Utilities Districts (PUDs) and port districts the authority to offer retail telecommunications services.

Our initial coverage pointed out shortcomings in S.B. 5383. The bill originally contained a preemption clause that gave private Internet Service Providers (ISPs) the power to reject PUDs’ and ports’ project proposals in areas where incumbent ISPs claim they plan to expand service within six months. 

Since our last reporting on this piece of legislation, the bill was amended by the State House Community and Economic Development Committee, removing the veto authority initially given to existing ISPs. However, a new provision favoring incumbent cable ISPs was also added, which would prohibit a PUD or port from providing retail Internet services in an area where an existing provider offers service at a minimum of 100 Megabits per second (Mbps) download speed and 20 Mbps upload speed. The minimum speed requirements of this provision would be increased to stay consistent with Washington’s state definition of broadband.

The Committee also amended the bill to allow PUDs and ports to provide retail services in served areas, but only when building to reach an unserved region. 

With vaccines rolling out tier by tier, state by state, and restaurants, bars and public spaces starting to reopen one by one, there seems to be a desire to say, “Wow, things are going back to normal!” Unfortunately, the public health crisis exacerbated healthcare, education, and economic inequities that have long existed in low-income and communities of color across the country and have no chance of going away any time soon. But some community leaders have stepped up and come to the table with one piece of the puzzle in bridging these inequities — better Internet access to these communities. 

Over the summer, we covered several communities that jumped to action and came up with quick ways to implement long-term solutions. 

The city of San Rafael, which sits on the coast of northern California in Marin County, continues to strengthen, expand, and research the use of the network it built over the summer and fall for one unserved area hit hard by the economic, education, and health impact of Covid-19. And on the other side of the country, Meta Mesh in Pittsburgh, Pennsylvania continues construction on a pilot project that is hoping to connect unserved families by the end of this summer.

Focusing on the Future

In San Rafael, California, the city, Marin County and a nonprofit organization — the Canal Alliance — all joined forces to bring free Wi-Fi to the Canal neighborhood. 

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Snapshot

A California ballot initiative would empower voters to build their own Internet access solutions.

The Oklahoma House sends seven broadband bills to Senate.

New York and North Carolina initiate statewide digital inclusion programs.

Virginia is second state to pass comprehensive privacy legislation. 

See the bottom of this post for some broadband-related job openings. 

The State Scene 

California Legislation Could Lead To Massive Investments in Public Broadband

As lawmakers in the Golden State look to rectify a reputation of having one of the highest student populations without Internet connectivity, bills aiming to expand access to 98 percent of California households by increasing investments in public broadband infrastructure were launched early in California’s legislative session.

Though there are several other bills pertaining to broadband that have been introduced in Sacramento, we focus on these four because, if passed, they would have the biggest impact on municipal networks.

S.B. 4, sponsored by State Sen. Lena Gonzalez, D-33, would create a new state-backed bond program, enabling local governments to finance more than $1 billion in public infrastructure projects through bond issuances. The low-interest debt for the projects could be repaid over multiple decades. 

Privately-owned broadband infrastructure builder and operator SiFi Networks is sprouting roots in cities from California to the Commonwealth of Massachusetts.

The Fullerton FiberCity network was SiFi’s first FiberCity — a privately built, financed, and operated open access network. Network construction in Fullerton started in November 2019 and involved over 600 miles of micro-trenching underground fiber, a technique designed to minimize traffic and neighborhood disruption sometimes associated with ripping up roads to install fiber conduit. The first residential customers were hooked up in June, with an anticipated completion date in the fall of 2021.

And while construction of the fiber network in Fullerton isn’t quite finished yet, eight other communities across the country are in the process of becoming the next SiFi fiber cities.

Salem

In Salem, Ma., SiFi Networks announced at the end of November it had completed a “construction trial” which is a “practice run” ahead of the actual construction of the citywide network, slated to start this spring.

Once completed, the Salem project, in which SiFi Networks is partnering with GigabitNow, will offer the city’s 43,180 residents an alternative to the monopoly services of Comcast. GigabitNow, which will be the Internet Service Provider (ISP) for Salem FiberCity, estimates they will be able to begin providing services as early as summer 2021.

All across the country, municipal networks, cooperatives, and cities have been putting in extra effort to make sure that Americans have the fast, affordable, reliable Internet access they need to conduct their lives in the midst of the COVID-19 pandemic. 

AT&T has decided to take another route. A USA Today report last week revealed that the company has stopped making connections to users subscribing to its ADSL Internet as of October 1st. Anyone calling the company to set up new service is being told that no new accounts are being accepted. 

The decision comes right as the National Digital Inclusion Alliance has released a report detailing that only 28% of AT&T’s territory can get fiber from the company. AT&T has deliberately focused investment in more urban areas of higher income. From the report:

The analysis of AT&T’s network reveals that the company is prioritizing network upgrades to wealthier areas, and leaving lower income communities with outdated technologies. Across the country, the median income for households with fiber available is 34 percent higher than in areas with DSL only — $60,969 compared to $45,500. 

The Deep South Hit Hardest

As of today, it looks like the most conservative number of those affected by the decision will be about 80,000 households that have no other option. Our analysis using the Federal Communication Commission’s (FCC) Form 477 data shows that the Deep South will be hit the hardest (see table at the bottom of the page). 

Collectively it means more than 207,000 Americans who, if disconnected, will have no option for Internet aside from their mobile devices or satellite service. The number of Americans affected by the decision but which have additional wireline options is higher: roughly 2.2 million American households nationwide subscribe to the service (see map, below).  

In the city of Fullerton, California (pop. 140,000), privately owned infrastructure builder and operator SiFi Networks has turned on the first section of what will be a city-wide, open access Fiber-to-the-Home network. The project makes Fullerton SiFi’s first FiberCity — a privately built, financed, and operated open access network it plans to duplicate in more cities across the country in the future. When complete next fall, the Fullerton FiberCity network will pass every home and business in the city, with the company's subsidiary, SiFi Networks Operations, selling wholesaling capacity to as many Internet Service Providers (ISPs) as want to enter the market. 

A Different Approach

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SiFi’s FiberCity model remains somewhat unique in the United States, and is much more common in Europe and Asia. CEO Ben Bawtree-Johnson attributes their success to cracking the economic code for private investment in open access information infrastructure, which has seen more attention in recent years as investors and fund managers have seen opportunities. “[O]ur vision really is to create as many last-mile fiber optic networks as we can across the USA in a long term sustainable fashion,” Bawtree-Jobson remarked on an episode of the podcast last fall. “[W]e're all about long term, dry, low yielding, risk mitigated investments, so everything we do is based around 30-year plus type investments.”