Lawmakers text while discussing lack of broadband for poor

March 12, 2013

By Katy Grimes

Click-click-click went lawmakers’ smart phones as they texted Monday while seeming to listen to four hours of hearings on expanding broadband Internet services to poor people. At the same hearing, representatives from AT&T, Verizon, and the California Cable and Telecommunications Association asked lawmakers for forward thinking, reasonable policies and workable regulations.

The companies pointed out that broadband now rapidly is moving to such wireless networks from expensive land-lines. And the hearings didn’t even touch on how rural Californians, even with no land-lines or WiFi service available, already can sign up for satellite broadband services.

“Bridging the digital divide in California: A foundation for a better way of life,” was the hearing’s name. It was held by the Assembly Utilities and Commerce Committee. The clincher of “bridging the divide” would be passage of AB 1299, by the committee chairman, Assemblyman Steven Bradford, D-Los Angeles. AB 1299 would allow the California Advanced Services Fund to spend more money on broadband in public-housing projects.

The mission of the fund is to “encourage deployment of high-quality advanced communications services to all Californians.” Bradford’s bill would add special instructions to the California Public Utilities Commission to “encourage deployment and adoption” in “publicly supported housing communities in urban regions.”

Digital divide

According to the committee analysis, the term “digital divide” refers to “the gap that prevents access to the Internet by individuals, businesses and geographic areas at different socio-economic levels.” If lawmakers had discussed satellites, they would have learned that the only places in California without broadband access are caves.

As to cities, big and small ones in California long have been outfitted for many years with broadband cable, fiberoptic and WiFi services. They usually cost $30 to $50 a month. And as anyone who lives in the state knows, the services keep getting better, and sometimes even cheaper.

The crux of the hearing centered on what the role of the communications industry is in closing the “digital divide,” and how much more money the Legislature can extract from them to pay for this. As with the controversial $2.2 billion federal “Obamaphone” subsidy for cell phones to the poor, the money actually would come from increased fees for current users.

“In a period when broadband has become essential for jobs, economic growth and democratic engagement, a vast number of Californians live in areas without broadband,” the analysis said. “Many of these residents are poor or live in urban or rural areas that will remain unserved or underserved unless state broadband policies spur investment to address this deficiency.” Investment would mean tax and fee increases on those already using the services, in particular on those in urban areas where housing costs much more than in rural areas.

What’s been done?

In 2002, the California Legislature ordered the PUC to develop a plan to spur more widespread broadband infrastructure in the state. During this process, the CPUC also was to identify barriers to the process, and help develop a plan for addressing these.

By 2005, the CPUC approved the merger of telecom companies: SBC with AT&T, and Verizon with MCI. With the approval, the CPUC required the newly merged companies to increase charitable contributions of broadband access to low-income areas and communities. The CPUC ordered a $60 million charitable contribution fund to be created by the companies.

This established the California Emerging Technology Fund. Issues on the table currently with the fund are best practices for local broadband policy, better use of broadband availability and mapping data, the role of wireless Internet service providers and public and private infrastructure funding.

The second component of the 2013 broadband legislation is by Senator Alex Padilla, D-San Fernando Valley. He authored SB740, which would add $100 million to the fund and allow five more years to collect it. SB740 would give the PUC the ability to give grants and loans to a broader spectrum of organizations, but with an eye on broadband infrastructure construction.

Robert Wullenjohn with the CPUC said if SB740 is passed, the federal government could provide more matching money — as much at $700 million total, with grants going to schools and libraries in underserved areas.

Failing technology leads the cause

The California Emerging Technology Fund was represented at the hearing by Sunne Wright McPeak. The CPUC website explains the fund was created “to achieve ubiquitous access to broadband and advanced services in California through the use of emerging technologies by the year 2010.”

The CPUC’s website said the CETF:

* Is not intended simply to be a “build it and they will come” approach. The CETF will work to expand broadband adoption and use.

* The CETF will focus a significant amount of its resources on the needs of underserved communities and bridging the Digital Divide.

* At least $5 million will be earmarked to fund telemedicine applications that serve California’s underserved communities, particularly rural areas and facilities with a large number of indigent patients.

Ironically, while I was writing this story, the website for the CETF, cetfund.org, was not available. One would think the emerging technology folks at least would have their own technology in working order.

However, at the hearing, McPeak handed out a slick, expensively printed annual report for 2012-13.

“This is going to be pivotal in California history in getting broadband to 200,000 people in public housing who don’t have access,” McPeak said.

McPeak explained that, with the $60 million committed by AT&T and Verizon, the CETF set a goal of 10 years to have of 98 percent of all households to have access, and 80 percent of Californians to have access at home.

McPeak said that in 2008 statewide broadband use at home was 55 percent. Today it is 73 percent, 7 percentage points ahead of the rest of the country, with gains in minority communities.

In 2009 the fund received two grants from the American Recovery and Reinvestment Act, President Obama’s economic stimulus program, totaling $14.3 million to increase broadband adoption in California.

It is unclear what the stimulus money was specifically used for. However, the CETF created another program, this one called the “Get Connected!” program, “a public awareness and education program, allowing the federal government to better leverage their funds for greater impact,” according to committee analysis.

This sounds like a government-funded program to nowhere.

McPeak said the original $60 million left very few resources to put into actual broadband structure, sounding as if the state demanded just enough to make it look as if they were doing something.

McPeak said the CETF had a focus on connecting public housing through a “smart housing” program. “CETF formulated a model policy for Smart Housing, briefed state and local government policymakers, and conducted workshops with stakeholders,” the annual report said. “CETF and the California Department of Housing and Community Development jointly requested that the U.S. Department of Housing and Urban Development amend federal policies and regulations to support and promote Smart Housing.”

In other words, no smart housing has been accomplished. This appears to be a program created as a landing place for federal funds.

McPeak admitted the bulk of public housing in California is not connected to the Internet. But she said they have the federal government finally paying attention to this — $74 million later. And again, any of these public housing units easily could set up satellite Internet access.

Get out of the way

The panel made up of communications companies had one message for legislators: Get out of the way.

Bill Devine of AT&T told the committee the rise in consumer demand of using wireless connections to go online means people are more likely to use mobile devices.

“Consumers from all economic backgrounds are demanding service,” Devine said. “Many of our customers are cutting the cord and using mobile devices for all Internet. And wireless broadband is allowing this.” The legislators’ own constant texting during the hearing was evidence of this.

Devine said AT&T invested $7 billion in 2010-12 in wireless services, and will invest another $14 billion over the next three years. “California will get a large part of that,” Devine said. “But we need regulatory policies in California that are forward looking, that promote capital investment.”

And he noted AT&T gave $45 million to the CETF.

Carolyn McIntyre with the California Cable and Telecommunications Association said private investment is more than $11 billion since 1996.

McIntyre said 15 million homes have broadband access, and $1.5 billion a year is spent on advancing this.

Expanding into public housing is a goal, according to McIntyre, “as long as we are granted right of access to the properties,” indicating a problem. But she never said what the access problem was.

McIntyre said they are working with Los Angeles to grant access to the necessary properties to increase wireless services and hot-spot areas.

She said her organization offers free broadband to schools and libraries, and is committed to a plan for more lower income communities.

Tim McCallion with Verizon said there is great need to streamlining permit process, especially for upgrades to cell towers.

What’s really going on?

While encouraging adoption of these two new bills could mean more computer classes, computer labs in community centers, and even subsidized cell and Internet service for low-income families, the track record so far is not impressive.  As worthy sounding as these benefits may be, adding them, at the expense of the communication companies, will merely take money away from necessary new broadband infrastructure investments that would benefit everyone, including the poor.

The hearing also seemed to be stuck thinking of technology in terms of the late-1990s. The lack of a discussion of satellite services was telling, even though satellites already bring broadband to most rural areas. Instead, the focus was on expanding expensive land-line services and putting up more cell towers.

Most likely, the money taken from ratepayers will be redirected to more subsidies, social programs, marketing campaigns and government Web sites.