Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including telephone corporations. Existing law requires the commission to develop, implement, and administer the California Advanced Services Fund (CASF) to encourage deployment of high-quality advanced communications services to all Californians that will promote economic growth, job creation, and the substantial social benefits of advanced information and communications technologies. Existing law authorizes the commission to impose a surcharge, until December 31, 2032, to collect up to $150,000,000 per year for deposit into the CASF. Existing law requires the commission to establish specified accounts within the CASF, including the Broadband Infrastructure Grant Account and the Federal Funding Account, as specified.

This bill would expressly authorize otherwise eligible wireless broadband service providers to apply for and receive funding from the Broadband Infrastructure Grant Account and the Federal Funding Account, as provided. The bill would specify that the changes made by the bill do not require the commission to initiate or reopen any proceeding as a result of the bill.

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including telephone corporations. Existing law requires the commission to develop, implement, and administer the California Advanced Services Fund (CASF) to encourage deployment of high-quality advanced communications services to all Californians that will promote economic growth, job creation, and the substantial social benefits of advanced information and communications technologies. Existing law authorizes the commission to impose a surcharge, until December 31, 2032, to collect up to $150,000,000 per year for deposit into the CASF. Existing law requires the commission to establish specified accounts within the CASF, including the Broadband Infrastructure Grant Account and the Federal Funding Account, as specified.

This bill would expressly authorize otherwise eligible wireless broadband service providers to apply for and receive funding from the Broadband Infrastructure Grant Account and the Federal Funding Account, as provided. The bill would specify that the changes made by the bill do not require the commission to initiate or reopen any proceeding as a result of the bill.

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including telephone corporations. Existing law requires the commission to develop, implement, and administer the California Advanced Services Fund (CASF) to encourage deployment of high-quality advanced communications services to all Californians that will promote economic growth, job creation, and the substantial social benefits of advanced information and communications technologies. Existing law authorizes the commission to impose a surcharge, until December 31, 2032, to collect up to $150,000,000 per year for deposit into the CASF. Existing law requires the commission to establish specified accounts within the CASF, including the Broadband Infrastructure Grant Account and the Federal Funding Account, as specified.

This bill would expressly authorize otherwise eligible wireless broadband service providers to apply for and receive funding from the Broadband Infrastructure Grant Account and the Federal Funding Account. Account, as provided.

Existing law establishes 6 funds in the State Treasury through which the states universal service programs for communications are funded. Existing law requires moneys in the funds to be expended only for specified purposes and only upon appropriation in the annual Budget Act or upon supplemental appropriation.

This bill would make a nonsubstantive change to this requirement.

GOVERNOR'S VETO

GV Bill Id:AB 1065

Author:(Jim Patterson)

As Enrolled Ver:September 18, 2023

2/3 vote

SUMMARY

This bill clarifies that otherwise eligible wireless communications providers may receive certain broadband infrastructure grants issued by the California Public Utilities Commission (CPUC).

Senate Amendments

1. Address chaptering conflicts.
2. Provides that this bill does not require the CPUC to reopen an existing proceeding or initiate a new proceeding.

Governor’s Veto Message

This bill specifies that wireless internet service providers are eligible to apply for and receive funding from the California Advanced Services Fund (CASF) lastmile Broadband Infrastructure Account (BIA) and the Federal Funding Account (FFA).

The COVID-19 pandemic underscored the importance of making broadband service accessible and affordable to ALL Californians. In 2021, I signed into law Senate Bill 156, which invests $6 billion in broadband infrastructure, of which $2 billion is allocated to the streamlined last-mile FFA program to connect households and businesses with time-limited federal funds.

The goal of this last-mile grant program, administered by the California Public

Utilities Commission (CPUC), is to expeditiously connect unserved and underserved communities to future-proof broadband service.

Unfortunately, this bill would delay this effort by requiring the CPUC to halt the FFA program and modify the rules governing this program through a lengthy process. This could jeopardize the CPUC's ability to meet federal funding encumbrance deadlines and it could significantly disrupt the review of project grant applications that were recently submitted.

As I noted last year in my veto message to Assembly Bill 27 49 (Quirk-Silva), we simply cannot afford to delay the implementation of the FFA program, as investing in scalable broadband infrastructure is foundational to connecting every Californian to long-lasting economic opportunity and success.

COMMENTS

1. The CPUC administers various separate funding programs for last-mile broadband infrastructure grants. The CPUC currently administers three separate pots of last-mile broadband infrastructure funding, two under the California Advanced Services Fund (CASF) Program and the recently established federal Broadband Equity, Access, and Deployment (BEAD) program. This bill applied specifically to the two accounts of the CASF: The Broadband Infrastructure Grant Account (IGA) and the Federal Funding Account (FFA). Both the FFA and IGA provide grants to fund broadband infrastructure in unserved area of the state, as defined. However, the IGA and FFA are distinct funds and grant programs with different funding sources, statutory requirements and program goals as summarized below.

The IGA, which existed since the inception of the CASF, is funded through state surcharges collected by the CPUC on telephone bills and is therefore completely state funds. The goal of the IGA is to provide broadband access to 98% of households in each consortia region by December 31, 2032. In the 2022-2023 budget year the CPUC allocated about $25-million for the IGA. The FFA was established in 2021 pursuant to SB 156 (Committee on Budget and Fiscal Review. Chapter 112 of 2021), using a mix of federal funding from the American Rescue Plan Act (ARPA) and state general fund dollars. Pursuant to that legislation and the companion budget agreement, the FFA received $2 billion over three fiscal years, starting in 2021-22, to fund grants for last-mile broadband infrastructure projects. Pursuant to state law under SB 156, the FFA must be spent corresponding with federal rules and requirements. For example, federal guidelines require FFA funds to be encumbered by December 31, 2024 and spent by December 31, 2026. Notably, SB 156 set a state requirement to encumber the funds by June 30, 2023 to ensure the funds are used by the final federal deadline. Besides a strict spending timeline, the federal government also provides guidance on use of the funds regarding eligible projects and affordability requirements.

1. The CPUC has adopted inconsistent eligibility rules for wireless projects. The CPUC has adopted different program rules to govern both the IGA and the FFA, although at their essence both programs have the same purpose of encouraging the deployment of broadband infrastructure in unserved areas of the state. For example, under IGA rules a wireless project would be eligible for funding provided that the proposed system otherwise meets the technical performance standards adopted by the commission. However, under the FFA rules wireless projects are categorically ineligible to be considered for funding, regardless if that projects otherwise meets the technical performance criteria adopted in the rules. This bill would have expressly authorize otherwise eligible wireless projects to apply for and receive funds from the IGA and FFA, at the discretion of the commission. By “otherwise eligible”, this bill assumed the project otherwise meets the technical performance standards established by the CPUC.
2. Recent amendments reduce the likelihood the CPUC will change their rules. Amendments adopted in the Senate clarify that this bill does not require the CPUC to reopen an existing proceeding or initiate a new proceeding. However, without reopening an existing proceeding or initiative a new proceeding it is unclear what administrative procedure would be available for the CPUC to implement the provisions of this bill. Of course, the CPUC could voluntarily choose to reopen or initiate a new proceeding to update their program rules for the FFA and IGA, but that would be a voluntary decision and not a requirement of this bill. As a result, it is not likely that the CPUC will make any changes to their existing rules for the IGA or FFA as a result of this bill.

According to the Author

"AB 1065 will allow for the greatest number of Californians to have access to the internet and other communication services at the lowest possible cost."

Arguments in Support

Supporters of this bill, Cal.net, Inc., argue that many large sections of the state would not be served well by limiting the means by which they receive communication services. In many of these cases, fixed wireless can easily meet the needs of the community and far exceed the minimum performance requirements of the grant programs, but at a much lower cost of implementation and at a much accelerated construction period.

Arguments in Opposition

The Utility Reform Network (TURN), a consumer advocacy organization, opposes this bill because they claim it seeks to expand eligibility to projects that deploy unreliable and inadequate broadband service. TURN claims that fixed wireless projects suffer from established engineering-capacity limits and are unreliable because they are easily impaired by weather. TURN argues that public investments in subpar technologies will only further exacerbate unequal access to broadband.

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1. No direct state cost.
2. Cost pressure because the bill expands the types of entities that might receive a CASF grant (wireless projects).

VOTES

ASM COMMUNICATIONS AND CONVEYANCE: 12-0-1

YES: Boerner Horvath, Jim Patterson, Davies, Garcia, Holden, Hoover, Low, Maienschein, Papan, Luz Rivas, Rodriguez, Weber

ABS, ABST OR NV: Bonta

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

ASSEMBLY FLOOR: 75-0-5

YES: Addis, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones‑Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie‑Norris, Quirk-Silva, Ramos, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Rendon

ABS, ABST OR NV: Aguiar-Curry, Ortega, Reyes, Wood, Zbur

SENATE FLOOR: 31-6-3

YES: Allen, Alvarado-Gil, Archuleta, Atkins, Becker, Blakespear, Bradford, Cortese, Dahle, Dodd, Eggman, Glazer, Grove, Hurtado, Jones, Laird, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Smallwood-Cuevas, Umberg, Wahab, Wiener, Wilk

NO: Ashby, Caballero, Durazo, Gonzalez, Menjivar, Stern

ABS, ABST OR NV: Limón, McGuire, Skinner

ASSEMBLY FLOOR: 76-0-4

YES: Addis, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Robert Rivas

ABS, ABST OR NV: Aguiar-Curry, Gabriel, Reyes, Zbur

UPDATED

VERSION: September 18, 2023

CONSULTANT: Emilio Perez / C. & C. / (916) 319-2637 FN: 0002550

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1065

Author:(Jim Patterson)

As Amended Ver:September 8, 2023

Majority vote

SUMMARY

This bill clarifies that otherwise eligible wireless communications providers may receive certain broadband infrastructure grants issued by the California Public Utilities Commission (CPUC).

Senate Amendments

1. Address chaptering conflicts.
2. Provides that this bill does not require the CPUC to reopen an existing proceeding or initiate a new proceeding.

COMMENTS

1. The CPUC administers various separate funding programs for last-mile broadband infrastructure grants. The CPUC currently administers three separate pots of last-mile broadband infrastructure funding, two under the California Advanced Services Fund (CASF) Program and the recently established federal Broadband Equity, Access, and Deployment (BEAD) program. This bill applies specifically to the two accounts of the CASF: The Broadband Infrastructure Grant Account (IGA) and the Federal Funding Account (FFA). Both the FFA and IGA provide grants to fund broadband infrastructure in unserved area of the state, as defined. However, the IGA and FFA are distinct funds and grant programs with different funding sources, statutory requirements and program goals as summarized below.

The IGA, which existed since the inception of the CASF, is funded through state surcharges collected by the CPUC on telephone bills and is therefore completely state funds. The goal of the IGA is to provide broadband access to 98% of households in each consortia region by December 31, 2032. In the 2022-2023 budget year the CPUC allocated about $25-million for the IGA. The FFA was established in 2021 pursuant to SB 156 (Budget and Fiscal Review Committee), Chapter 112, Statutes of 2021, using a mix of federal funding from the American Rescue Plan Act (ARPA) and state general fund dollars. Pursuant to that legislation and the companion budget agreement, the FFA received $2 billion over three fiscal years, starting in 2021-22, to fund grants for last-mile broadband infrastructure projects. Pursuant to state law under SB 156, the FFA must be spent corresponding with federal rules and requirements. For example, federal guidelines require FFA funds to be encumbered by December 31, 2024, and spent by December 31, 2026. Notably, SB 156 set a state requirement to encumber the funds by June 30, 2023 to ensure the funds are used by the final federal deadline. Besides a strict spending timeline, the federal government also provides guidance on use of the funds regarding eligible projects and affordability requirements.

1. The CPUC has adopted inconsistent eligibility rules for wireless projects. The CPUC has adopted different program rules to govern both the IGA and the FFA, although at their essence both programs have the same purpose of encouraging the deployment of broadband infrastructure in unserved areas of the state. For example, under IGA rules a wireless project would be eligible for funding provided that the proposed system otherwise meets the technical performance standards adopted by the commission. However, under the FFA rules wireless projects are categorically ineligible to be considered for funding, regardless if that projects otherwise meets the technical performance criteria adopted in the rules. This bill would expressly authorize otherwise eligible wireless projects to apply for and receive funds from the IGA and FFA, at the discretion of the commission. By "otherwise eligible", this assume the project otherwise meets the technical performance standards established by the CPUC.
2. Recent amendments reduce the likelihood the CPUC will change their rules. Amendments adopted in the Senate clarify that this bill does not require the CPUC to reopen an existing proceeding or initiate a new proceeding. However, without reopening an existing proceeding or initiative a new proceeding it is unclear what administrative procedure would be available for the CPUC to implement the provisions of this bill. Of course, the CPUC could voluntarily choose to reopen or initiate a new proceeding to update their program rules for the FFA and IGA, but that would be a voluntary decision and not a requirement of this bill. As a result, it is not likely that the CPUC will make any changes to their existing rules for the IGA or FFA as a result of this bill.

According to the Author

"AB 1065 will allow for the greatest number of Californians to have access to the internet and other communication services at the lowest possible cost."

Arguments in Support

Supporters of this bill, Cal.net, Inc., argue that many large sections of the state would not be served well by limiting the means by which they receive communication services. In many of these cases, fixed wireless can easily meet the needs of the community and far exceed the minimum performance requirements of the grant programs, but at a much lower cost of implementation and at a much accelerated construction period.

Arguments in Opposition

The Utility Reform Network (TURN), a consumer advocacy organization, opposes this bill because they claim it seeks to expand eligibility to projects that deploy unreliable and inadequate broadband service. TURN claims that fixed wireless projects suffer from established engineering-capacity limits and are unreliable because they are easily impaired by weather. TURN argues that public investments in subpar technologies will only further exacerbate unequal access to broadband.

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1. No direct state cost.
2. Cost pressure because this bill expands the types of entities that might receive a CASF grant (wireless projects).

VOTES:

ASM COMMUNICATIONS AND CONVEYANCE: 12-0-1

YES: Boerner Horvath, Jim Patterson, Davies, Garcia, Holden, Hoover, Low, Maienschein, Papan, Luz Rivas, Rodriguez, Weber

ABS, ABST OR NV: Bonta

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

ASSEMBLY FLOOR: 75-0-5

YES: Addis, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones‑Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie‑Norris, Quirk-Silva, Ramos, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Rendon

ABS, ABST OR NV: Aguiar-Curry, Ortega, Reyes, Wood, Zbur

UPDATED

VERSION: September 8, 2023

CONSULTANT: Emilio Perez / C. & C. / (916) 319-2637 FN: 0002397

 THIRD READING  

Bill No: AB 1065

Author: Jim Patterson (R)

Amended: 9/8/23 in Senate

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 13-0, 6/20/23

AYES: Bradford, Dahle, Becker, Dodd, Eggman, Grove, Min, Newman, Rubio, Seyarto, Skinner, Stern, Wilk

NO VOTE RECORDED: Ashby, Caballero, Durazo, Gonzalez, McGuire

ASSEMBLY FLOOR: 75-0, 5/30/23 - See last page for vote

SUBJECT: Communications: California Advanced Services Fund

SOURCE: Author

DIGEST:

This bill clarifies that otherwise eligible wireless communications providers may receive certain broadband infrastructure grants issued by the California Public Utilities Commission (CPUC).

Senate Floor Amendments of 9/8/23 address chaptering conflicts and clarify that this bill does not require the CPUC to reopen an existing proceeding or initiate a new proceeding.

ANALYSIS:

Existing law:

1. Establishes the California Advanced Services Fund (CASF), which is administered by the CPUC to fund broadband infrastructure and adoption in unserved and underserved communities. Existing law sets eligibility criteria for CASF grants, sets speed requirements for CASF-funded infrastructure, and authorizes the collection of a surcharge to fund the CASF until 2032. (Public Utilities Code §281 and §281.1)
2. Establishes various accounts within the CASF to fund broadband projects, including the Infrastructure Grant Account (IGA) and the Federal Funding Account (FFA) to fund last-mile broadband infrastructure projects. Existing law allocates surcharge funds to the IGA and allocates federal funds to the FFA to fund these broadband infrastructure projects. (Public Utilities Code §281)

This bill clarifies that otherwise eligible wireless providers may receive grants from the CASF IGA and FFA, and it specifies that this bill does not require the CPUC to reopen an existing proceeding or initiate a new proceeding.

Background

Status of CPUC broadband infrastructure funds. In 2021, the Legislature passed several bills that made a historic investment in broadband infrastructure. This legislation included SB 156 (Committee on Budget, Chapter 112, Statutes of 2021), which allocated $6 billion in federal and state funds to build a state-owned middle-mile broadband network. SB 156 also established the FFA and allocated $2 billion to the FFA to fund last-mile broadband projects in urban and rural counties. Since the passage of SB 156, the CPUC adopted rules for the FFA in in a 2022 decision (D.22-04-055). These rules established projects’ eligibility for FFA grants. Under the CPUC’s decision, wireless projects are not eligible for FFA grants.

In addition to passing SB 156, the Legislature also passed SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021). These measures revised and extended the CASF, including increasing program eligibility and raising speed standards for CASF-funded infrastructure. Following the passage of these measures, the CPUC adopted new rules for the CASF IGA in November 2022. Under the new CASF IGA rules, wireless infrastructure capable of meeting other CASF standards is eligible for grants from the IGA.

Funding swaps have given the CPUC more time to spend broadband monies. While the CPUC has adopted rules for its infrastructure programs, the CPUC has yet to issue grants under these revised rules. Wireless projects are eligible for CASF IGA grants, this bill would likely require the CPUC to revise its rules for the FFA. Funding swaps have provided the CPUC with more time to create and modify plans for broadband grants and evaluate applications for those monies. The FFA was originally established to fund broadband projects using allocations of Coronavirus State and Local Fiscal Recovery Funds, which must be encumbered by December 31, 2024. However, in subsequent budget actions, this funding has been swapped for a combination of General Fund monies and a grant from the federal Capital Projects Fund. As a result, the CPUC now must only encumber Capital Projects Fund monies in the FFA by December 31, 2026.

Bill clarifies that wireless infrastructure is eligible for broadband grants. Existing statutes do not exclude wireless projects from CASF grant eligibility; however, CPUC decisions regarding the FFA have specified that wireless projects are not eligible for FFA funding. In April 2022, the CPUC adopted rules governing the FFA (Decision 22-04-055). These rules defined an eligible project as one “…capable of offering wireline broadband service at or above 100/100 Mbps, or 100/20 Mbps if symmetrical service is not practicable.” The CPUC’s exclusion of wireless broadband reflected the federal Department of Treasury’s guidance to states that urged states to prioritize funding fiber optic broadband projects. This bill specifies that otherwise eligible wireless projects may receive grants from the CASF IGA and FFA, but it does not specify which wireless projects meet the federal and state standards.

Fixed wireless projects have had mixed results, but technology evolves. Historically, state and federal broadband infrastructure grants have included wireless projects; however, these projects have not always provided reliable broadband service that meets modern needs. The federal Rural Digital Opportunity Fund (RDOF) initially approved funds for multiple fixed wireless projects that were later rescinded when the Federal Communications Commission determined that the fixed wireless projects were unlikely to provide the services promised. It is possible that some fixed wireless technologies are superior to others and can provide speeds, latency, and reliability similar to those for wired broadband. These technologies may be quicker and cheaper to deploy broadband in areas where fiber installation is infeasible; however, it is unclear how the CPUC can distinguish the technical capacities of different wireless projects unless the CPUC adopts more specific criteria for wireless projects and devotes greater time to reviewing the capacity of these technologies.

Related/Prior Legislation

AB 2749 (Quirk-Silva, 2022) would have required the CPUC to take various steps regarding applications for the FFA, and the bill would have clarified that otherwise eligible wireless providers are eligible for grants from the FFA. The bill was vetoed.

SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021) revised and extended the CASF by increasing speed standards for CASF-funded infrastructure to 100/20 Mbps, expanded eligibility to communities that lack broadband service meeting federal standards, expanded local governments’ eligibility for CASF grants, and extended CASF’s operation and funding until 2032.

SB 156 (Committee on Budget, Chapter 112, Statutes of 2021) implemented broadband infrastructure spending approved in the 2021 Budget Act. The bill established the FFA within CASF, set forth funding allocations for the FFA, and created technical assistance and additional broadband funding opportunities for local governments. The bill also established the Office of Broadband and Digital Literacy and required the office to oversee the construction of a state-owned, open access middle mile broadband network.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Committee on Appropriations:

• The CPUC estimates ongoing costs of about $537,000 annually and one-time costs of about $200,000 over four years (California Advanced Services Fund [CASF]) to review proposed wireless projects during the grant evaluation phase and, once the project is deployed, conduct field inspections including on-site speed and reliability testing, among other things.
• Unknown but likely significant ongoing cost pressure (CASF) for additional funding to provide grants to entities that would be made eligible by this bill.

SUPPORT: (Verified 9/8/23)

Supervisor Jaron E. Brandon, Tuolumne County- District 5
Advanced Wireless

Cal.net, Inc.

Competitive Carriers Association

CTIA

NATE-The Communications Infrastructure Contractors Association

OACYS

Rural Wireless Association

Tarana Wireless

The Wireless Infrastructure Association

WISPA-Broadband Without Boundaries

OPPOSITION: (Verified 9/8/23)

5G Free California
Alliance for Nurses for Healthy Environments

AltaPasa Residents for Responsible Technology

As You Sow

Boyle Heights Community Garden

Breast Cancer Prevention Partners

California Brain Tumor Association

California Nurses for Environmental Health & Justice

Californians for Safe Technology
Center for Environmental Health

Clean Earth 4 Kids

Communications Workers of America, District 9

Consumers for Safe Cell Phones

Dietrick Institute for Applied Insect Ecology

Ecological Options Network
EMF Safety Network Education/Outreach
Environmental Health Trust

Environmental Working Group
FACTS: Families Advocating for Chemical and Toxics Safety
Feather River Action!

GMOScience

Health & Habitat, Inc.

Malibu for Safe Tech
Media Alliance
Moms Across America

Mothers of East LA

Neighbors for Safe Metering

Parents for a Safer Environment

Physicians for Safe Technology
Plumas Wired!

Preserve Rural Sonoma County

Safe Tech for Santa Rosa
Safer 5G Moraga
Salmon Protection and Watershed Network

Sonoma County Tomorrow

Sonoma Neighbors for Safe Tech
Sonoma Safe Ag Safe Schools

Stop Smart Meters!
The Utility Reform Network

Topanga Peace Alliance

Towards an Internet of Living Beings

Wine & Water Watch

Wireless Radiation Education & Defense
Several Individuals

ARGUMENTS IN SUPPORT: According to the author:

We have the shared goal of connecting as many households as possible with broadband internet. AB 1065 supports the pursuit of that goal by making wireless broadband projects eligible for state grants that fund broadband deployment.

ARGUMENTS IN OPPOSITION: Opponents largely oppose this measure because they oppose wireless technology and the use of state grants to support the expansion of wireless broadband service. Media Alliance opposes this bill because it argues that fixed wireless technology is not sufficiently reliable. In opposition, Media Alliance states:

Federal infrastructure funding, which California is heavily relying on to supplement state funds supporting the fiber broadband middle mile project, has clearly stated that their funding policy is to explicitly prioritize and favor fiber infrastructure broadband projects. By asserting that California will not, in fact, follow the federal guidelines, the state runs the not inconsiderable risk of having allocated federal funds not disbursed or clawed back due to the state’s insistence on using inferior technology options at the behest of incumbent providers. This could be the undoing of the state’s ambitious broadband expansion.

ASSEMBLY FLOOR: 75-0, 5/30/23

AYES: Addis, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Rendon

NO VOTE RECORDED: Aguiar-Curry, Ortega, Reyes, Wood, Zbur

Prepared by: Sarah Smith / E., U. & C. / (916) 651-4107

9/11/23 12:00:23

**** END ****

 THIRD READING  

Bill No: AB 1065

Author: Jim Patterson (R)

Amended: 5/18/23 in Assembly

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 13-0, 6/20/23

AYES: Bradford, Dahle, Becker, Dodd, Eggman, Grove, Min, Newman, Rubio, Seyarto, Skinner, Stern, Wilk

NO VOTE RECORDED: Ashby, Caballero, Durazo, Gonzalez, McGuire

SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener

ASSEMBLY FLOOR: 75-0, 5/30/23 - See last page for vote

SUBJECT: Communications: California Advanced Services Fund

SOURCE: Author

DIGEST:

This bill clarifies that otherwise eligible wireless communications providers may receive certain broadband infrastructure grants issued by the California Public Utilities Commission (CPUC).

ANALYSIS:

Existing law:

1. Establishes the California Advanced Services Fund (CASF), which is administered by the CPUC to fund broadband infrastructure and adoption in unserved and underserved communities. Existing law sets eligibility criteria for CASF grants, sets speed requirements for CASF-funded infrastructure, and authorizes the collection of a surcharge to fund the CASF until 2032. (Public Utilities Code §281 and §281.1)
2. Establishes various accounts within the CASF to fund broadband projects, including the Infrastructure Grant Account (IGA) and the Federal Funding Account (FFA) to fund last-mile broadband infrastructure projects. Existing law allocates surcharge funds to the IGA and allocates federal funds to the FFA to fund these broadband infrastructure projects. (Public Utilities Code §281)

This bill clarifies that otherwise eligible wireless providers may receive grants from the CASF IGA and FFA.

Background

Status of CPUC broadband infrastructure funds. In 2021, the Legislature passed several bills that made a historic investment in broadband infrastructure. This legislation included SB 156 (Committee on Budget, Chapter 112, Statutes of 2021), which allocated $6 billion in federal and state funds to build a state-owned middle-mile broadband network. SB 156 also established the FFA and allocated $2 billion to the FFA to fund last-mile broadband projects in urban and rural counties. Since the passage of SB 156, the CPUC adopted rules for the FFA in in a 2022 decision (D.22-04-055). These rules established projects’ eligibility for FFA grants. Under the CPUC’s decision, wireless projects are not eligible for FFA grants.

In addition to passing SB 156, the Legislature also passed SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021). These bills revised and extended the CASF, including increasing program eligibility and raising speed standards for CASF-funded infrastructure. Following the passage of these measures, the CPUC adopted new rules for the CASF IGA in November 2022. Under the new CASF IGA rules, wireless infrastructure capable of meeting other CASF standards is eligible for grants from the IGA.

Funding swaps have given the CPUC more time to spend broadband monies. While the CPUC has adopted rules for its infrastructure programs, the CPUC has yet to issue grants under these revised rules. Wireless projects are eligible for CASF IGA grants, this bill would likely require the CPUC to revise its rules for the FFA. Funding swaps have provided the CPUC with more time to create and modify plans for broadband grants and evaluate applications for those monies. The FFA was originally established to fund broadband projects using allocations of Coronavirus State and Local Fiscal Recovery Funds, which must be encumbered by December 31, 2024. However, in subsequent budget actions, this funding has been swapped for a combination of General Fund monies and a grant from the federal Capital Projects Fund. As a result, the CPUC now must only encumber Capital Projects Fund monies in the FFA by December 31, 2026.

Bill clarifies that wireless infrastructure is eligible for broadband grants. Existing statutes do not exclude wireless projects from CASF grant eligibility; however, CPUC decisions regarding the FFA have specified that wireless projects are not eligible for FFA funding. In April 2022, the CPUC adopted rules governing the FFA (Decision 22-04-055). These rules defined an eligible project as one “…capable of offering wireline broadband service at or above 100/100 Mbps, or 100/20 Mbps if symmetrical service is not practicable.” The CPUC’s exclusion of wireless broadband reflected the federal Department of Treasury’s guidance to states that urged states to prioritize funding fiber optic broadband projects. This bill specifies that otherwise eligible wireless projects may receive grants from the CASF IGA and FFA, but it does not specify which wireless projects meet the federal and state standards.

Fixed wireless projects have had mixed results, but technology evolves. Historically, state and federal broadband infrastructure grants have included wireless projects; however, these projects have not always provided reliable broadband service that meets modern needs. The federal Rural Digital Opportunity Fund (RDOF) initially approved funds for multiple fixed wireless projects that were later rescinded when the Federal Communications Commission determined that the fixed wireless projects were unlikely to provide the services promised. It is possible that some fixed wireless technologies are superior to others and can provide speeds, latency, and reliability similar to those for wired broadband. These technologies may be quicker and cheaper to deploy broadband in areas where fiber installation is infeasible; however, it is unclear how the CPUC can distinguish the technical capacities of different wireless projects unless the CPUC adopts more specific criteria for wireless projects and devotes greater time to reviewing the capacity of these technologies.

Related/Prior Legislation

AB 2749 (Quirk-Silva, 2022) would have required the CPUC to take various steps regarding applications for the FFA, and the bill would have clarified that otherwise eligible wireless providers are eligible for grants from the FFA. The bill was vetoed.

SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021) revised and extended the CASF by increasing speed standards for CASF-funded infrastructure to 100/20 Mbps, expanded eligibility to communities that lack broadband service meeting federal standards, expanded local governments’ eligibility for CASF grants, and extended CASF’s operation and funding until 2032.

SB 156 (Committee on Budget, Chapter 112, Statutes of 2021) implemented broadband infrastructure spending approved in the 2021 Budget Act. The bill established the FFA within CASF, set forth funding allocations for the FFA, and created technical assistance and additional broadband funding opportunities for local governments. The bill also established the Office of Broadband and Digital Literacy and required the office to oversee the construction of a state-owned, open access middle mile broadband network.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• The CPUC estimates ongoing costs of about $537,000 annually and one-time costs of about $200,000 over four years (CASF) to review proposed wireless projects during the grant evaluation phase and, once the project is deployed, conduct field inspections including on-site speed and reliability testing, among other things.
• Unknown but likely significant ongoing cost pressure (CASF) for additional funding to provide grants to entities that would be made eligible by this bill.

SUPPORT: (Verified 9/1/23)

Cal.net, Inc.

OACYS

Supervisor Jaron E. Brandon, Tuolumne County- District 5
Advanced Wireless

Tarana Wireless

OPPOSITION: (Verified 9/1/23)

5G Free California

Alliance for Nurses for Healthy Environments

AltaPasa Residents for Responsible Technology

As You Sow

Boyle Heights Community Garden

Breast Cancer Prevention Partners

California Brain Tumor Association

California Nurses for Environmental Health & Justice

Californians for Safe Technology

Center for Environmental Health

Clean Earth 4 Kids

Communications Workers of America, District 9

Consumers for Safe Cell Phones

Dietrick Institute for Applied Insect Ecology

Ecological Options Network

EMF Safety Network Education/Outreach

Environmental Health Trust

Environmental Working Group

FACTS: Families Advocating for Chemical and Toxics Safety

Feather River Action!

GMOScience

Health & Habitat, Inc.

Malibu for Safe Tech

Media Alliance

Moms Across America

Mothers of East LA

Neighbors for Safe Metering

Parents for a Safer Environment

Physicians for Safe Technology

Plumas Wired!

Preserve Rural Sonoma County

Safe Tech for Santa Rosa

Safer 5G Moraga

Salmon Protection and Watershed Network

Sonoma County Tomorrow

Sonoma Neighbors for Safe Tech

Sonoma Safe Ag Safe Schools

Stop Smart Meters!

The Utility Reform Network

Topanga Peace Alliance

Towards an Internet of Living Beings

Wine & Water Watch

Wireless Radiation Education & Defense

Several individuals

ARGUMENTS IN SUPPORT: According to the author:

We have the shared goal of connecting as many households as possible with broadband internet. AB 1065 supports the pursuit of that goal by making wireless broadband projects eligible for state grants that fund broadband deployment.

ARGUMENTS IN OPPOSITION: Opponents largely oppose this bill because they oppose wireless technology and the use of state grants to support the expansion of wireless broadband service. Media Alliance opposes this bill because it argues that fixed wireless technology is not sufficiently reliable. In opposition, Media Alliance states:

Federal infrastructure funding, which California is heavily relying on to supplement state funds supporting the fiber broadband middle mile project, has clearly stated that their funding policy is to explicitly prioritize and favor fiber infrastructure broadband projects. By asserting that California will not, in fact, follow the federal guidelines, the state runs the not inconsiderable risk of having allocated federal funds not disbursed or clawed back due to the state’s insistence on using inferior technology options at the behest of incumbent providers. This could be the undoing of the state’s ambitious broadband expansion.

ASSEMBLY FLOOR: 75-0, 5/30/23

AYES: Addis, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Rendon

NO VOTE RECORDED: Aguiar-Curry, Ortega, Reyes, Wood, Zbur

Prepared by: Sarah Smith / E., U. & C. / (916) 651-4107

9/2/23 15:01:39

**** END ****

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 1065 (Jim Patterson) - Communications: California Advanced Services Fund

Bill Summary:

This bill would expressly authorize otherwise eligible wireless communications providers to receive certain broadband infrastructure grants issued by the California Public Utilities Commission (CPUC).

Fiscal Impact:

• The CPUC estimates ongoing costs of about $537,000 annually and one-time costs of about $200,000 over four years (California Advanced Services Fund [CASF]) to review proposed wireless projects during the grant evaluation phase and, once the project is deployed, conduct field inspections including on-site speed and reliability testing, among other things.
• Unknown but likely significant ongoing cost pressure (CASF) for additional funding to provide grants to entities that would be made eligible by this bill.

Background:

State law directs the CPUC to develop, implement and administer the CASF to encourage deployment of high-quality advanced communications services to all Californians that will promote economic growth, job creation and the substantial social benefits of advanced information and communications technologies. The law creates within the CASF several accounts, monies in which the CPUC is to expend for specified purposes. Those accounts are the Broadband Infrastructure Grant Account (IGA), the Rural and Urban Regional Consortia Grant Account, the Broadband Public Housing Account, the Broadband Adoption Account and the Federal Funding Account (FFA).

Status of CPUC broadband infrastructure funds. In 2021, the Legislature passed several bills that made a historic investment in broadband infrastructure. This legislation included SB 156 (Committee on Budget, Chapter 112, Statutes of 2021), which allocated $6 billion in federal and state funds to build a state-owned middle-mile broadband network. SB 156 also established the FFA and allocated $2 billion to the FFA to fund last-mile broadband projects in urban and rural counties. Since the passage of SB 156, the CPUC adopted rules for the FFA in in a 2022 decision (D.22-04-055). These rules established projects’ eligibility for FFA grants. Under the CPUC’s decision, wireless projects are not eligible for FFA grants.

In addition to passing SB 156, the Legislature also passed SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021). These measures revised and extended the CASF, including increasing program eligibility and raising speed standards for CASF-funded infrastructure. Following the passage of these measures, the CPUC adopted new rules for the CASF IGA in November 2022. Under the new CASF IGA rules, wireless infrastructure capable of meeting other CASF standards is eligible for grants from the IGA.

Funding swaps have given the CPUC more time to spend broadband monies. While the CPUC has adopted rules for its infrastructure programs, the CPUC has yet to issue grants under these revised rules. Wireless projects are eligible for CASF IGA grants, this bill would likely require the CPUC to revise its rules for the FFA. Funding swaps have provided the CPUC with more time to create and modify plans for broadband grants and evaluate applications for those monies. The FFA was originally established to fund broadband projects using allocations of Coronavirus State and Local Fiscal Recovery Funds, which must be encumbered by December 31, 2024. However, in subsequent budget actions, this funding has been swapped for a combination of General Fund monies and a grant from the federal Capital Projects Fund. As a result, the CPUC now must only encumber Capital Projects Fund monies in the FFA by December 31, 2026.

Existing statutes do not exclude wireless projects from CASF grant eligibility. However, CPUC decisions regarding the FFA have specified that wireless projects are not eligible for FFA funding. In April 2022, the CPUC adopted rules governing the FFA (Decision 22-04-055). These rules defined an eligible project as one “…capable of offering wireline broadband service at or above 100/100 Mbps, or 100/20 Mbps if symmetrical service is not practicable.” The CPUC’s exclusion of wireless broadband reflected the federal Department of Treasury’s guidance to states that urged states to prioritize funding fiber optic broadband projects.

Fixed wireless projects have had mixed results, but technology evolves. Historically, state and federal broadband infrastructure grants have included wireless projects; however, these projects have not always provided reliable broadband service that meets modern needs. The federal Rural Digital Opportunity Fund (RDOF) initially approved funds for multiple fixed wireless projects that were later rescinded when the Federal Communications Commission determined that the fixed wireless projects were unlikely to provide the services promised. It is possible that some fixed wireless technologies are superior to others and can provide speeds, latency, and reliability similar to those for wired broadband. These technologies may be quicker and cheaper to deploy broadband in areas where fiber installation is infeasible; however, it is unclear how the CPUC can distinguish the technical capacities of different wireless projects unless the CPUC adopts more specific criteria for wireless projects and devotes greater time to reviewing the capacity of these technologies.

Proposed Law:

This bill would expressly authorize otherwise eligible wireless providers to receive grants from the CASF IGA and FFA.

Related Legislation:

AB 2749 (Quirk-Silva, 2022) would have required the CPUC to take various steps regarding applications for the FFA, and the bill would have clarified that otherwise eligible wireless providers are eligible for grants from the FFA. The bill was vetoed.

SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021) revised and extended the CASF by increasing speed standards for CASF-funded infrastructure to 100/20 Mbps, expanded eligibility to communities that lack broadband service meeting federal standards, expanded local governments’ eligibility for CASF grants, and extended CASF’s operation and funding until 2032.

SB 156 (Committee on Budget, Chapter 112, Statutes of 2021) implemented broadband infrastructure spending approved in the 2021 Budget Act. The bill established the FFA within CASF, set forth funding allocations for the FFA, and created technical assistance and additional broadband funding opportunities for local governments. The bill also established the Office of Broadband and Digital Literacy and required the office to oversee the construction of a state-owned, open access middle mile broadband network.

Staff Comments:

By expanding grant program eligibility, this bill could create cost pressure on CASF to provide additional funding for grants. Staff note funding for the CASF program is generated by a charge on consumer phone bills. This cost pressure could potentially lead to increasing the charge on some consumers, charging consumers for a longer period of time, or both.

-- END --

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Steven Bradford, Chair

2023 - 2024 Regular

Bill No: AB 1065 Hearing Date: 6/20/2023

SUBJECT: Communications: California Advanced Services Fund

DIGEST: This bill clarifies that otherwise eligible wireless communications providers may receive certain broadband infrastructure grants issued by the California Public Utilities Commission (CPUC).

ANALYSIS:

Existing law:

1. Establishes the California Advanced Services Fund (CASF), which is administered by the CPUC to fund broadband infrastructure and adoption in unserved and underserved communities. Existing law sets eligibility criteria for CASF grants, sets speed requirements for CASF-funded infrastructure, and authorizes the collection of a surcharge to fund the CASF until 2032. (Public Utilities Code §281 and §281.1)
2. Existing law establishes various accounts within the CASF to fund broadband projects, including the Infrastructure Grant Account (IGA) and the Federal Funding Account (FFA) to fund last-mile broadband infrastructure projects. Existing law allocates surcharge funds to the IGA and allocates federal funds to the FFA to fund these broadband infrastructure projects. (Public Utilities Code §281)

This bill clarifies that otherwise eligible wireless providers may receive grants from the CASF IGA and FFA.

Background

Status of CPUC broadband infrastructure funds. In 2021, the Legislature passed several bills that made a historic investment in broadband infrastructure. This legislation included SB 156 (Committee on Budget, Chapter 112, Statutes of 2021), which allocated $6 billion in federal and state funds to build a state-owned middle-mile broadband network. SB 156 also established the FFA and allocated $2 billion to the FFA to fund last-mile broadband projects in urban and rural counties. Since the passage of SB 156, the CPUC adopted rules for the FFA in in a 2022 decision (D.22-04-055). These rules established projects’ eligibility for FFA grants. Under the CPUC’s decision, wireless projects are not eligible for FFA grants.

In addition to passing SB 156, the Legislature also passed SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021). These measures revised and extended the CASF, including increasing program eligibility and raising speed standards for CASF-funded infrastructure. Following the passage of these measures, the CPUC adopted new rules for the CASF IGA in November 2022. Under the new CASF IGA rules, wireless infrastructure capable of meeting other CASF standards is eligible for grants from the IGA.

Funding swaps have given the CPUC more time to spend broadband monies. While the CPUC has adopted rules for its infrastructure programs, the CPUC has yet to issue grants under these revised rules. Wireless projects are eligible for CASF IGA grants, this bill would likely require the CPUC to revise its rules for the FFA. Funding swaps have provided the CPUC with more time to create and modify plans for broadband grants and evaluate applications for those monies. The FFA was originally established to fund broadband projects using allocations of Coronavirus State and Local Fiscal Recovery Funds, which must be encumbered by December 31, 2024. However, in subsequent budget actions, this funding has been swapped for a combination of General Fund monies and a grant from the federal Capital Projects Fund. As a result, the CPUC now must only encumber Capital Projects Fund monies in the FFA by December 31, 2026.

Bill clarifies that wireless infrastructure is eligible for broadband grants. Existing statutes do not exclude wireless projects from CASF grant eligibility; however, CPUC decisions regarding the FFA have specified that wireless projects are not eligible for FFA funding. In April 2022, the CPUC adopted rules governing the FFA (Decision 22-04-055). These rules defined an eligible project as one “…capable of offering wireline broadband service at or above 100/100 Mbps, or 100/20 Mbps if symmetrical service is not practicable.” The CPUC’s exclusion of wireless broadband reflected the federal Department of Treasury’s guidance to states that urged states to prioritize funding fiber optic broadband projects. This bill specifies that otherwise eligible wireless projects may receive grants from the CASF IGA and FFA, but it does not specify which wireless projects meet the federal and state standards.

Fixed wireless projects have had mixed results, but technology evolves. Historically, state and federal broadband infrastructure grants have included wireless projects; however, these projects have not always provided reliable broadband service that meets modern needs. The federal Rural Digital Opportunity Fund (RDOF) initially approved funds for multiple fixed wireless projects that were later rescinded when the Federal Communications Commission determined that the fixed wireless projects were unlikely to provide the services promised. It is possible that some fixed wireless technologies are superior to others and can provide speeds, latency, and reliability similar to those for wired broadband. These technologies may be quicker and cheaper to deploy broadband in areas where fiber installation is infeasible; however, it is unclear how the CPUC can distinguish the technical capacities of different wireless projects unless the CPUC adopts more specific criteria for wireless projects and devotes greater time to reviewing the capacity of these technologies.

Prior/Related Legislation

AB 2749 (Quirk-Silva, 2022) would have required the CPUC to take various steps regarding applications for the FFA, and the bill would have clarified that otherwise eligible wireless providers are eligible for grants from the FFA. The bill was vetoed.

SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021) revised and extended the CASF by increasing speed standards for CASF-funded infrastructure to 100/20 Mbps, expanded eligibility to communities that lack broadband service meeting federal standards, expanded local governments’ eligibility for CASF grants, and extended CASF’s operation and funding until 2032.

SB 156 (Committee on Budget, Chapter 112, Statutes of 2021) implemented broadband infrastructure spending approved in the 2021 Budget Act. The bill established the FFA within CASF, set forth funding allocations for the FFA, and created technical assistance and additional broadband funding opportunities for local governments. The bill also established the Office of Broadband and Digital Literacy and required the office to oversee the construction of a state-owned, open access middle mile broadband network.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT:

Supervisor Jaron E. Brandon, Tuolumne County- District 5
Advanced Wireless

Cal.net, Inc.

OACYS

Tarana Wireless

OPPOSITION:

5G Free California
Alliance for Nurses for Healthy Environments

As You Sow

Boyle Heights Community Garden

Breast Cancer Prevention Partners

California Brain Tumor Association

California Nurses for Environmental Health & Justice

Californians for Safe Technology
Center for Environmental Health

Clean Earth 4 Kids

Consumers for Safe Cell Phones

Dietrick Institute for Applied Insect Ecology

Ecological Options Network
EMF Safety Network Education/Outreach
Environmental Health Trust

Environmental Working Group
FACTS: Families Advocating for Chemical and Toxics Safety
Feather River Action!

GMOScience

Health & Habitat, Inc.

Malibu for Safe Tech
Media Alliance
Moms Across America

Mothers of East LA

Neighbors for Safe Metering

Parents for a Safer Environment

Physicians for Safe Technology
Plumas Wired!

Preserve Rural Sonoma County

Safe Tech for Santa Rosa
Safer 5G Moraga
Sonoma County Tomorrow

Sonoma Neighbors for Safe Tech
Sonoma Safe Ag Safe Schools

Stop Smart Meters!
The Utility Reform Network

Towards an Internet of Living Beings

Wine & Water Watch

Wireless Radiation Education & Defense
Several Individuals

ARGUMENTS IN SUPPORT: According to the author:

We have the shared goal of connecting as many households as possible with broadband internet. AB 1065 supports the pursuit of that goal by making wireless broadband projects eligible for state grants that fund broadband deployment.

ARGUMENTS IN OPPOSITION: Opponents largely oppose this measure because they oppose wireless technology and the use of state grants to support the expansion of wireless broadband service. Media Alliance opposes this bill because it argues that fixed wireless technology is not sufficiently reliable. In opposition, Media Alliance states:

Federal infrastructure funding, which California is heavily relying on to supplement state funds supporting the fiber broadband middle mile project, has clearly stated that their funding policy is to explicitly prioritize and favor fiber infrastructure broadband projects. By asserting that California will not, in fact, follow the federal guidelines, the state runs the not inconsiderable risk of having allocated federal funds not disbursed or clawed back due to the state’s insistence on using inferior technology options at the behest of incumbent providers. This could be the undoing of the state’s ambitious broadband expansion.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1065

Author:(Jim Patterson)

As Amended Ver:May 18, 2023

Majority vote

SUMMARY

This bill would expressly authorize an otherwise eligible wireless broadband service provider to apply for and receive funding from two accounts of the California Advanced Services Fund (CASF) program, as provided.

Major Provisions

1. Expressly provides that an otherwise eligible wireless broadband service provider may apply for and receive funding from the Broadband Infrastructure Grant Account (IGA) and Federal Funding Account (FFA). The IGA and FFA are two separate subaccounts of the CASF program.
2. Clarifies that receiving funds from either account is at the discretion of the California Public Utilities Commission (CPUC).

COMMENTS

1. The CASF program has two subaccounts focused on broadband infrastructure. The CASF Broadband Infrastructure Grant Account (IGA) and the Federal Funding Account (FFA) both provide grants to fund broadband infrastructure. However, the IGA and FFA are distinct funds and grant programs with different funding sources, statutory requirements and program goals as summarized below.

The IGA, which existed since the inception of the CASF, is funded through state surcharges collected by the CPUC on telephone bills. The goal of the IGA is to provide broadband access to 98% of households in each consortia region by December 31, 2032. In the 2022-2023 budget year the CPUC allocated about $25-million for the IGA.

The FFA, on the other hand, is a recently created account. The FFA was established in 2021 pursuant to SB 156 (Budget and Fiscal Review Committee), Chapter 112, Statutes of 2021. Pursuant to that legislation and the companion budget agreement, the FFA received $2 billion over three fiscal years, starting in 2021-22, to fund grants for last-mile broadband infrastructure projects. Pursuant to state law under SB 156, the FFA must be spent corresponding with federal rules and requirements. For example, federal guidelines require FFA funds to be encumbered by December 31, 2024 and spent by December 31, 2026. Notably, SB 156 set a state requirement to encumber the funds by June 30, 2023 to ensure the funds are used by the final federal deadline. Besides a strict spending timeline, the federal government also provides guidance on use of the funds regarding eligible projects and affordability requirements.

1. CPUC Has Adopted Inconsistent CASF Rules for Wireless Projects. The CPUC has adopted different program rules to govern both the IGA and the FFA, although at their essence both programs have the same purpose of encouraging the deployment of broadband infrastructure in unserved areas of the state. For example, under IGA rules a wireless project would be eligible for funding provided that the proposed system otherwise meets the performance standards adopted by the commission. However, under the FFA rules wireless projects are categorically ineligible to be considered for funding, regardless if that projects otherwise meets the performance criteria adopted in the rules. Notably the funding differential between both programs is also stark – the IGA has budgeted about $25-million for projects but the FFA has budgeted $2-billion. This bill would expressly authorize wireless project eligibility for both funds.

In public statements made to the Assembly Communications & Conveyance Committee, the CPUC has defended their reasoning for excluding wireless projects from the FFA. The CPUC's rationale is that most funding should be reserved for superior technologies. For example, projects using fiber optic cables, which reliably provide greater speed capabilities and are much more likely to meet a user's technological needs in the long run. On the other hand, wireless technologies are the quickest projects to deploy and are much less expensive to build than projects that require direct physical connections to a premises. Indeed there are tradeoffs among different types of technologies: capabilities, time to deployment, cost - and the CPUC ought to exercise discretion when evaluating potential applicants. However, because the CPUC's rules for the FFA categorically exclude wireless technology, potentially worthy projects using wireless technologies cannot be considered. Ultimately, a technology-inclusive approach that allows any technology that is otherwise capable of meeting the CPUC's performance criteria to compete for funding is most likely to meet the state's broadband goals. Towards that end, this bill would make it explicitly clear that those types of projects are eligible for IGA and FFA funds.

According to the Author

"AB 1065 will allow for the greatest number of Californians to have access to the internet and other communication services at the lowest possible cost."

Arguments in Support

Supporters of this bill, Cal.net, Inc., argue that many large sections of the state would not be served well by limiting the means by which they receive communication services. In many of these cases, fixed wireless can easily meet the needs of the community and far exceed the minimum performance requirements of the grant programs, but at a much lower cost of implementation and at a much accelerated construction period.

Arguments in Opposition

The Utility Reform Network (TURN), a consumer advocacy organization, opposes this bill because they claim it seeks to expand eligibility to projects that deploy unreliable and inadequate broadband service. TURN claims that fixed wireless projects suffer from established engineering-capacity limits and are unreliable because they are easily impaired by weather. TURN argues that public investments in subpar technologies will only further exacerbate unequal access to broadband.

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1. No direct state cost.
2. Cost pressure because the bill expands the types of entities that might receive a CASF grant (wireless projects).

VOTES

ASM COMMUNICATIONS AND CONVEYANCE: 12-0-1

YES: Boerner Horvath, Jim Patterson, Davies, Garcia, Holden, Hoover, Low, Maienschein, Papan, Luz Rivas, Rodriguez, Weber

ABS, ABST OR NV: Bonta

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

UPDATED

VERSION: May 18, 2023

CONSULTANT: Emilio Perez / C. & C. / (916) 319-2637 FN: 0000959

Date of Hearing: April 19, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 1065

Author:(Jim Patterson) – As Amended Ver:March 2, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY

This bill expressly authorizes a wireless broadband service provider that is otherwise eligible for grants from the California Advanced Services Fund (CASF) program to apply for and receive funding from both the CASF Broadband Infrastructure Grant Account and the CASF Federal Funding Account.

FISCAL EFFECT:

No direct state cost.

Nonetheless, the bill is a candidate for the committee’s suspense file because the bill expands the types of entities that might receive a grant from the CASF subaccounts, which is, in itself, a significant fiscal effect.

In addition, to the extent this bill results in CASF monies going to broadband projects in rural areas of the state that, absent this bill, would have gone to broadband projects in urban areas of the state, the bill creates cost pressure to fund those urban projects.

COMMENTS:

Background. State law directs the California Public Utilities Commission (CPUC) to develop, implement and administer the CASF to encourage deployment of high-quality advanced communications services to all Californians that will promote economic growth, job creation and the substantial social benefits of advanced information and communications technologies. The law creates within the CASF several accounts, monies in which the CPUC is to expend for specified purposes. Those accounts are the Broadband Infrastructure Grant Account (IGA), the Rural and Urban Regional Consortia Grant Account, the Broadband Public Housing Account, the Broadband Adoption Account and the Federal Funding Account (FFA).

Directly of interest to this analysis are the IGA and FFA.

Statute states the goal of the IGA as, no later than December 31, 2032, to approve funding for infrastructure projects that will provide broadband access to no less than 98% of California households in each “consortia” region, and charges the CPUC with achieving this goal. In addition, statute directs the CPUC to approve IGA funding for projects that provide last-mile broadband access to households unserved by an existing facility-based broadband provider. Notably, statute directs the CPUC to award grants from the IGA on a “technology-neutral basis,” considering the useful economic life of capital investments, and including both wireline and wireless technology. The CPUC allocated about $25 million in the current fiscal year to the IGA from a portion of money collected via a surcharge on telecommunications users.

Statute also establishes within the CASF the FFA. As it does with the IGA, statute defines the goal of the FFA, in this case as “to expeditiously connect unserved and underserved communities by applicable federal deadlines.” The Budget Act of 2021 appropriated $2 billion, mainly in federal funds, to the FFA to fund last-mile broadband infrastructure, evenly split, until June 30, 2023, between urban and rural counties.

Statute does not require the CPUC allocate monies in the FFA on a technology-neutral basis, though statute does define the data speeds a project must be able to deliver to be eligible for funding from the FFA. The CPUC has adopted rules governing grants from the FFA that make ineligible wireless broadband projects, even if those wireless projects meet the data speed requirements. As related in the analysis of this bill by the Assembly Committee on Communications and Conveyance, the CPUC explained its decision to exclude wireless projects from FFA funding by asserting that most broadband infrastructure funding should be reserved for “superior technologies,” such as projects using fiber optic cables, which, the CPUC asserts, reliably provide greater speed capabilities and are much more likely to meet a user’s technological needs in the long run.

The CPUC has yet to award funding from the FFA.

Clearly, the author disagrees with the CPUC’s reasoning regarding wireless broadband. So does broadband service provider Cal.net, Inc., which writes in support of the bill:

Adopting a technology-neutral approach to technical qualifications for these grant projects would assure a significantly larger volume of applicants who would be able to serve otherwise cost-prohibitive areas, thereby increasing the likelihood of fully subscribing to the available funding.

The Utility Reform Network (TURN) supports the CPUC’s existing rules for FFA grants and opposes the bill, contending:

Taxpayer funding should be used to invest in reliable and future-proof broadband wireline technology for unserved and underserved communities. This bill would further the Digital Divide because it would divert historic broadband investments to support fixed wireless, which suffers from established engineering-capacity limits and is unreliable because it is easily impaired by weather.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

Date of Hearing: March 29, 2023

ASSEMBLY COMMITTEE ON COMMUNICATIONS AND CONVEYANCE

Tasha Boerner Horvath, Chair

ABPCA Bill Id:AB 1065 (

Author:Jim Patterson) – As Amended Ver:March 2, 2023

SUBJECT: Communications: California Advanced Services Fund

SUMMARY: This bill would expressly authorize an otherwise eligible wireless broadband service provider to apply for and receive funding from two accounts of the California Advanced Services Fund (CASF) program. Specifically, this bill:

1. Expressly provides that an otherwise eligible wireless broadband service provider may, but is not required to, apply for and receive funding from the Broadband Infrastructure Grant Account (IGA) and Federal Funding Account (FFA). The IGA and FFA are two separate subaccounts of the CASF program.

EXISTING LAW:

1. Establishes the CASF in the State Treasury; requires that the moneys are held in trust and may only be expended pursuant to existing law and upon appropriation in the annual Budget Act or upon supplemental appropriation. (Public Utilities Code § 270)
2. Authorizes the CPUC to fund the CASF by imposing a surcharge on telecommunications users in an amount not to exceed one hundred fifty million dollars ($150,000,000) per year. (Public Utilities Code § 281 (d)(4))
3. Requires the CPUC to develop, implement, and administer the CASF program to encourage deployment of high-quality advanced communications services to all Californians that will promote economic growth, job creation, and substantial social benefits of advanced information and communications technologies, as provided in specific decisions of the CPUC and in the CASF statute. (Public Utilities Code § 281(a))
4. Requires the commission to establish specified accounts within the CASF (Public Utilities Code § 281(c)):
   1. The Broadband Infrastructure Grant Account (IGA)
   2. The Rural and Urban Regional Consortia Grant Account (Consortia Account)
   3. The Broadband Public Housing Account (PHA)
   4. The Broadband Adoption Account (Adoption Account)
   5. The Federal Funding Account (FFA)
5. Establishes the goal of the IGA to, no later than December 31, 2032, approve funding for infrastructure projects that will provide broadband access to no less than 98 percent of California households in each consortia region, as identified by the commission. (Public Utilities Code §281(b)(1)(A))
   1. Defines an “unserved area” eligible for IGA funds as one for which there is no broadband provider offering service at a speed of at least 25 megabits per second (mbps) downstream and 3 mbps upstream. (Public Utilities Code §281(b)(1)(B))
6. Requires that eligible projects for grant awards from the IGA shall deploy infrastructure capable of providing broadband access at speeds of a minimum of 100 mbps downstream and 20 mbps upstream, or the most current broadband definition standard set by the Federal Communications Commission. (Public Utilities Code §281(f))
7. Appropriates two billion ($2,000,000,000) to the CASF Federal Funding Account (FFA).
8. Requires the CPUC to implement the FFA account to expeditiously connect unserved and underserved communities by applicable federal deadlines. (Public Utilities Code § 281 (n))
9. Provides that projects funded pursuant to the FFA shall be implemented consistent with applicable federal regulations and any condition or guidelines applicable to the one-time federal infrastructure moneys. (Public Utilities Code § 281 (n))

FISCAL EFFECT: Unknown.

COMMENTS:

1. Background on CASF Program. The CASF program was first established in 2008 pursuant to SB 1193 (Padilla. Chapter 393, Statutes of 2008). That legislation authorized the CPUC to develop, implement, and administer the CASF program to encourage the deployment of high-quality advanced services to all Californians in order to promote economic growth, job creation, and societal benefits. Notably, the CASF program consists of several accounts, some of which are described below, focused on different aspects of broadband including broadband infrastructure and broadband adoption.

Since 2008, the CASF program has been revised via multiple bills and CPUC decisions. For example, prior to 2017 prior to AB 1665 (E. Garcia et al. Chapter 851, Statutes of 2017) the CPUC had a statutory $315 million cap. Pursuant to that legislation, the CPUC had authority to collect an additional amount up to $330 million for CASF, in an amount not to exceed $66 million per year, beginning with calendar year 2018 through CY 2022. Due to challenges with properly estimating the size of the billing base, the CPUC has yet to collect the full $330 million authorized in AB 1665. To address the issue the CPUC increased the surcharge rate from 0.56% to 1.019% effective December 1, 2020 to December 31, 2022. Additionally, pursuant to AB 14 (Aguiar-Curry. Chapter 658, Statutes of 2021) and SB 4 (Gonzalez. Chapter 671, Statutes of 2021) the CPUC’s surcharge collection authority and the CASF program goal was extended to December 31, 2022. The annual surcharge collection cap was also increased to $150 million per year.

1. CASF has two accounts focused on broadband infrastructure. The CASF Broadband Infrastructure Grant Account (IGA) and the Federal Funding Account (FFA) both provide grants to fund broadband infrastructure. However, the IGA and FFA are distinct funds with different funding sources, statutory requirements and program goals as summarized below.

The IGA, which existed since the inception of the CASF, is funded through state surcharges collected by the CPUC on telephone bills. The goal of the IGA is to provide broadband access to 98 of households in each consortia region by December 31, 2032. In the 2022-2023 budget year the CPUC allocated about $25-million for the IGA.

The FFA, on the other hand, is a recently created account. The FFA was established in 2021 pursuant to SB 156 (Committee on Budget and Fiscal Review. Chapter 112 of 2021). Pursuant to that legislation and the companion budget agreement, the FFA received $2 billion over three fiscal years, starting in 2021-22, to fund grants for last-mile broadband infrastructure projects. Pursuant to state law under SB 156, the FFA must be spent corresponding with federal rules and requirements. For example, federal guidelines require FFA funds to be encumbered by December 31, 2024 and spent by December 31, 2026. Notably, SB 156 set a state requirement to encumber the funds by June 30, 2023 to ensure the funds are used by the final federal deadline. Besides a strict spending timeline, the federal government also provides guidance on use of the funds regarding eligible projects and affordability requirements.

1. Hundreds of thousands of households are unserved and underserved by broadband service. Unserved households can be defined as areas that do not offer at least one tier of service at 25 mbps downstream and 3 mbps upstream with sufficient low latency to allow real-time interactive applications (such as video conferencing). This definition is consistent with the current federal definition of broadband Internet service set by the FCC. Definitions for underserved households vary, but typically means households that do not have access to service at 100 mbps downstream and at least 20 mbps upstream. The 100/20 threshold is consistent with guidance from the U.S. Department of the Treasury on the use of ARP fiscal relief funds for broadband infrastructure projects

According to recent analysis by the Legislative Analyst Office (LAO), based on data provided by the CPUC, there are 353,494 unserved households in California. This figure represents approximately 3% of the state’s households. Unserved households are located in every county in the state, although most unserved households are located in urban counties. As a percentage of total households though, rural counties have the highest rates of unserved households with the percentage of unserved households being significantly higher too. For example, there are 14 counties where 10% or more of the population are unserved and all are rural counties. The numbers are even worse if the standard is raised to underserved. According to the same LAO report, nearly 750,000 households in California are underserved by broadband service. That figure represents about 6% of the state’s households.

1. CPUC Has Adopted Inconsistent CASF Rules for Wireless Projects. The CPUC has adopted different program rules to govern both the IGA and the FFA, although at their essence both programs have the same purpose of encouraging the deployment of broadband infrastructure in unserved areas of the state. For example, under IGA rules a wireless project would be eligible for funding provided that the proposed system otherwise meets the performance standards adopted by the commission. However, under the FFA rules wireless projects are categorically ineligible to be considered for funding, regardless if that projects otherwise meets the performance criteria adopted in the rules. Notably the funding differential between both programs is also stark – the IGA has budgeted about $25-million for projects but the FFA has budgeted $2-billion.

In public statements made to this committee, the CPUC has defended their reasoning for excluding wireless projects from the FFA. The CPUC’s rationale is that most funding should be reserved for superior technologies, such as projects using fiber optic cables, which reliably provide greater speed capabilities and are much more likely to meet a user’s technological needs in the long run. On the other hand, wireless technologies are the quickest projects to deploy and are much less expensive to build than projects that require direct physical connections to a premises. Indeed there are tradeoffs among different types of technologies: capabilities, time to deployment, cost - and the CPUC ought to exercise discretion when evaluating potential applicants. However, because the CPUC’s rules for the FFA categorically exclude wireless technology, potentially worthy projects using wireless technologies cannot be considered. Ultimately, a technology-inclusive approach that allows any technology that is otherwise capable of meeting the CPUC’s performance criteria to compete for funding is most likely to meet the state’s broadband goals. Towards that end, this bill would make it explicitly clear that those types of projects are eligible for IGA and FFA funds.

1. Arguments in opposition. The Utility Reform Network (TURN), a consumer advocacy organization, opposes the bill because they claim it seeks to expand eligibility to projects that deploy unreliable and inadequate broadband service. They claim that fixed wireless projects suffer from established engineering-capacity limits and are unreliable because they are easily impaired by weather. TURN argues that public investments in subpar technologies will only further exacerbate unequal access to broadband.
2. Related/prior legislation.
   1. AB 1461 (Patterson) strikes existing law requiring the CPUC to initially allocate specified funding levels to rural and urban counties through June 30, 2023 for purposes of administering the CASF FFA. This bill is also under consideration in this committee.
   2. SB 156 (Committee on Budget and Fiscal Review. Chapter 112 of 2021) established the Federal Funding Account and required the CPUC to allocate $1 billion in funding each for rural and urban counties.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

The Utility Reform Network (TURN)

Media Alliance

Analysis Prepared by: Emilio Perez / C. & C. / (916) 319-2637