Assembly Standing Committee on Communications and Conveyance

Good morning, everyone, and thank you for joining us for the Committee on Communication and Conveyance. My name is Tasha Boerner, and I serve as the chair of the Committee. Joining me on the dais today are some of my colleagues. We have Assembly Member Mia Bonta, as well as Josh Hoover, and I think some of our other colleagues will be coming in and out throughout the hearing today. I also have with us Emilio Perez, chief consultant for communications and conveyance.

And thank you all for being here, and to the members of the public in the room or watching remotely online. The reason we're here today is to get an update from the California Public Utilities Commission and other stakeholders on implementation of new Federal Broadband programs in California. The Broadband Equity Access and Deployment, or BEAD, program is a $42.5 billion Federal Broadband program established by the Biden Administration pursuant to the Infrastructure Investment and Jobs Act.

The funding will be used to fund grants to eligible entities to build broadband infrastructure in unserved areas of the state. There's a great need for this work, as we know from this Committee's work on this topic. Current estimates for California's share of the BEAD funding are estimated to be around $900 million or more.

While additional funding has certainly welcomed development, and we thank the Federal Government for this historic investment, it raises unique questions for California because it raises unique questions for the California because of our existing suite of programs. California has been a leader in securing funding for broadband projects for a state for over a decade now. We've had the California Advanced Services Fund CASF and that's existed for building infrastructure. In 2021, the Legislature passed SB 156, which invested $6 billion into the broadband programs.

No other state has invested this level of funding into broadband like California has. Yet we have challenges of our own, and it's unclear how BEAD will complement our existing programs. While we all share the same goal of connecting the disconnected, there are divergent perspectives on the best strategy here. Over the course of the hearing, we'll hear directly from the PUC and stakeholders who are closely involved in BEAD implementation in California and other states.

My goal for this hearing is for everyone to come away with better understanding of the opportunity we have in front of us and as legislators, how we can best support the process. With that, I'd like to offer any of my colleagues on the dais to make an opening remark. Would you like to make opening remarks?

Just thankful for the opportunity to be here today and look forward to the discussion and learning more about the issue. Thank you.

Okay. And before we begin our oversight hearing, I'd like to take care of some logistical housekeeping. If any member of the public in the room would like to testify during public comment period, I'll invite you to approach the microphone at the appropriate time. I'd ask the public not touch the microphone. You can exit the hearing room once you're done testifying or return to your seat, we're welcome to have you. Now, let's cover the ground rules for inappropriate conduct.

The Assembly has experienced a number of disruptions to Committee and floor proceedings in the last few years. Conduct that disrupts, disturbs or otherwise impedes the orderly conduct of the hearing is prohibited. Such conduct may include talking or making loud noises from the audience, uttering loud, threatening or abusive language, speaking longer than the time allotted, extended discussions on matter not related to the subject of the hearing, and any other disruptive acts.

To address any disruptive conduct, I will take the following steps, if an individual disrupts our hearing process, I will direct them to stop and warn them that continued disruptions may result in removal from the Capitol Building. Also, document on record the individual involved and the nature of the disruptive conduct, and I may temporarily recess the hearing if the conduct does not stop. Also, request assistance from our Sergeants in escorting the individual from the Capitol Building.

Now, with that out of the way, we'll begin our oversight portion of this meeting. For panel one. We have representatives from the California Public Utility Commission. We have Rachel Peterson, Executive Director of the PUC, and Rob Osborn, Director of Communications Division of PUC. If you'd like to come up to Dais. Thank you. And members, I'll ask you to hold your substantive questions until the end of their presentation. Is that okay? Thank you.

Good morning. Chair Boerner. Honorable Members of the Committee. My name is Rachel Peterson. It's very good to be here this morning with you. Thank you for the opportunity to be here to present on our implementation to date of the Broadband Equity Access and Deployment, or BEAD, program. I'm here with Director Rob Osborn from the California Public Utilities Commission as well. I'll provide an overview, and then Director Osborn will turn to more of the details of implementation. Next slide, please.

So, overall, through BEAD, we are building on and advancing and delivering on California's historic investment in broadband for all. I want to emphasize three essential areas of action that are flowing through all of our implementation of BEAD. First, we are actively advocating and looking to deliver on all fronts available to make sure that we are maximizing federal funds for California with a BEAD program that addresses the needs for a state as large and geographically diverse as ours. We have everything in California.

We have diverse communities, large urban areas, remote rural communities. We have 172 federally recognized and non-federally recognized tribes, coastal and inland areas, and a highly diversified economy. But we also know that the digital divide is very real and it is affecting millions of Californians. So we're using every tool in the toolkit to advocate for and develop a BEAD program that is responsive to California's needs.

The tools include the Five Year Action plan, coordination with the Middle Mile network, coordination with the Digital Equity Program, and coordination with the programs in the California Advanced Services Fund. Second, we are working as close partners with the California Department of Technology, GO-Biz and GovOps to conduct a robust statewide engagement process. I'll speak more about that in a moment. And third, we are deploying our people, our caseworkers to meet with counties to ensure that they are aware of all of the programs available alongside BEAD.

We've met with 21 counties so far, and that county by county and local outreach will continue. Next slide, please. And now here I want to focus in on our workshop and public engagement process. This is a real-time update, and as I mentioned, we're executing this process jointly with California Department of Technology, GO-Biz and GovOps. The federal funding opportunity through BEAD requires each state to design its own program rules. And this process is the way we are doing exactly that.

We're engaging people and then incorporating their input into our BEAD Five-Year Strategic Plan. And you can see some of the statistics on this slide. We've had more than 1200 participants so far. We've held 13 out of 20 workshops to date. They range across the state and will continue to be conducted statewide. And we have three tribal consultations planned at the end of June and early July. And I just want to emphasize a little bit about how the engagement is happening.

At each workshop, people break into small groups to discuss barriers, opportunities and outcomes for the groups that are covered by the federal BEAD requirements. I'll give you just a couple of examples. At the workshop in San Jose, I sat with a young man who is still in the foster youth system and who is helping to ensure that other foster youth have both devices and data plans to use as they stay connected with their social workers, stay in school, or perhaps apply for their first jobs.

In Los Angeles my breakout table included staff from the County of Ventura who work with the elderly, who live in public housing and help them use technology to access telehealth and stay connected with their families. These are examples of the direct on-the-ground input about the challenges of closing the digital divide for people all across California. And these same participants are proposing terrific ideas and strategies about how we can achieve that outcome.

The 1200 workshop participants so far come from these communities, work with these communities, and are proposing strategies that BEAD and Digital Equity will be designed to serve. This is how we're preparing to maximize the federal funds for California through this program and design a program that meets California's diversity and needs. And I'll close with the last- next slide, please. This slide has some photos from some of our workshops. You can see Senator Aisha Wahab speaking at our San Jose Workshop.

Chair, your staff attended our San Diego workshop and we were very happy to have them there. And you can see how people are actively discussing speaking in front and then voting to put forward the ideas that they think will be most successful in serving the communities that they work with. Thank you again for the opportunity to be here, and I'll turn it to Director Osborn for additional detail and information.

Thank you. Good morning, Madam Chair and fellow Committee Members. I'm Director of the Communications division, Rob Osborne at the California Public Utilities Commission. I'm going to provide an overview. Next slide, please. I'm going to provide an overview of the broadband infrastructure and technical assistance funding programs, the BEAD Program Rulemaking, the BEAD and Digital Equity Outreach, the Five Year Action Plan, and then finally the implementation timeline for BEAD. Next slide, please.

So the Local Agency Technical Assistance Program is budgeted for $50 million for local and tribal governments to facilitate last-mile broadband infrastructure projects. Eligible costs include preconstruction deliverables such as environmental permits, engineering studies and strategic plans. The CPUC began awarding these grants in October of last year, and to date has received 119 applications totaling 52.5 million, and awarded grants to 82 applicants for a total of 36.4 million. 48 of the 58 counties have applied. There's still several million dollars available for tribes to apply. Next one.

The Loan Loss Reserve Program. So this provides 750,000,000 to enable local governments and nonprofits to secure financing for broadband infrastructure. The CPC published a staff proposal last year and received comments and reply comments in the month of October. In November, the CPC and the California Infrastructure and Economic Development Bank, otherwise known as iBank, signed an inter-agency agreement to work together to develop the loan loss Reserve Fund.

The CPC held a public participation workshop in November last year to provide an opportunity for community organizations to provide feedback on the staff proposal. The CPC is working closely with iBank to develop a revised staff proposal and proposed decision expected in quarter three of this year. Next is the federal funding account.

This is budgeted for 2 billion for last-mile broadband projects for unserved communities, as defined by the program rules of speeds less than 25 megabits per second down and three megabits per second up. Through the broadband for all proceeding the CPC adopted program rules for the Federal Funding Account and has been hiring staff developing a grant application interface system, an eligibility map, and Federal and State funding report formats.

The CPC published a first version of the eligibility map, which showed the location and data about potential last-mile broadband infrastructure grant projects. After publishing a first version of that map, the PUC received valuable feedback from stakeholders and input, and in response to this feedback and input, the CPC updated the map and released a second version in April that removed the predefined priority areas, updated the underlying data to better reflect the number of unserved locations.

Also, we added more socioeconomic indicators to capture measures of poverty and better identify disadvantaged communities using median household income and Senate Bill 535 metrics. The median income layer shows Low-income areas where aggregated household incomes are less than 80% of the county or state median income, whichever is higher. The median income data set comes from the California Department of Finance's five-year estimates based on the 2016 through 2020 American Community Survey.

The application window for the Last Mile federal funding account is planned to open in June and remain open for three months. The California Event Services Fund onto the far right can collect up to 150,000,000 a year and assists with broadband infrastructure deployment and adoption in public housing tribes and unserved areas. And applications for the infrastructure grant program are due by June of this year. Next slide, please. Now I'd like to provide an update on the Broadband Equity Access and Deployment, or BEAD, program.

This is a last mile grant program created by the Bipartisan Infrastructure Investment and Jobs Act, or IIJA of 2021 and administered by the National Telecommunications and Information Administration, or NTIA. Nationally, 42.45 billion is available for BEAD, and the allocations will depend in large part on the FCC's broadband map. The Department of Technology is the administering entity for the Digital Equity planning program, and the PUC is the administering entity for the BEAD program.

In May of last year, the NTI published a Notice to Funding Opportunity, which describes the federal program rules for the BEAD program. In July last year, the California submitted a letter of intent to participate in the program, and I'll go into the details of this timeline later. Next slide, please. This slide, I realize it's a little complicated with a lot of small words, but really summarizes at a high level the various grant programs that I just covered for last-mile grant funding.

Given the statutes and origins of each program, it's difficult to make them all work together in lockstep. But the good news is, with more granular mapping and building off the local agency technical assistance grants and utilizing the experience of the various California Event Services Fund consortia, the regional consortia that we fund, and the caseworkers as Executive Director Peterson mentioned earlier, applicants are better positioned than ever to get funding to close the digital divide.

A few key points to reiterate so the California Event Services Fund Program rules have been updated with the same speed threshold of 253 as the other programs. The mapping has followed the national trend to transition from census block to locations, and this has increased the complexity of the map. But it's also identified locations that were previously masked by the census block approach.

For broadband adoption there's more focus now on funding and training of digital navigators, which is a job that didn't exist at least in name 10 years ago, and we rely on our adoption account grant recipients to help us. We also hope that the new adoption map will help us better target communities that have low connectivity rates. Finally, in looking at unserved communities across the state, there's a concerted focus on providing capacity grants to tribes. Both the CSF Tribal Technical Assistance and the Local Agency Technical Assistance Grants provide these.

Next slide, please. In March of this year, the CPC opened an Order instituting rulemaking to develop rules determining grant funding, eligibility and compliance for BEAD funds distributed to California. More information on the rulemaking is available on the CPC's BEAD website. The rulemaking seeks input on 14 categories of questions described in the rulemaking. Those include determining an extremely high-cost threshold and this is the point at which we decide that it's no longer economic to deploy fiber. And then other technologies would come into play.

Geographic level of applications, overlapping project areas, selection among broadband priority projects, selection among other last-mile broadband deployment projects, the challenge process, match requirement statewide, middle mile ministerial review, grant conditions, grant applications, payment milestones, impacts on environmental and social justice communities, and then finally, additional things that the Commission should implement for which it has discretion. Comments were due on April 17 and reply comments were due on May 8th and a prehearing conference is scheduled for next Wednesday, the 31st of May. Next slide, please. Next slide, please.

So over. As Executive Director Peterson mentioned, over 1200 participants in the first, actually, now we're 13. We had our most recent event on Saturday in Long Beach have been held. Next slide, please. And the upcoming tomorrow we have another event in Santa Ana, followed by Tuolumne, Santa Maria, Seaside, Oakland, Redding, sorry, Redding will begin our three tribal consultations in person and then we end that with a virtual tribal consultation. Actually, that will be at the very end. Next slide, please.

So we included in this slide links to videos that were created from the Mercedes event and the Fresno event. We're not going to play them here, but the URLs are included in the slide deck, so you can watch those later. But basically, as Executive Director Peterson mentioned, there are small breakout sessions with results that are reported out to the larger group. Really, the two main questions we're asking are what are the challenges when it comes to achieving digital equity?

What are the effective strategies for overcoming the digital divide? And this is with regard to the 10 covered populations and then six outcome areas which include education, health care, digital literacy and inclusion, workforce and economic development, essential services, accessibility and civic engagement, and then finally, tribal collaboration. Next slide, please. So the Five-Year Action Plan is the next large deliverable for the BEAD program. This is due in mid-August.

This is a high level strategy document on closing the digital divide and ensuring equity and is due 270 days from the initial planning funds. And I'll talk about that later, the initial planning funds. Central to completing the Five-Year Action Plan is a public engagement which we've just talked about earlier about the 20 events, and the output of those events is being documented and will be included in the record of the CPC's BEAD rulemaking.

This includes the estimated timeline and cost for universal service the planned use of federal, state and local funding sources prioritization of areas for federal support, use of public private partnerships or cooperatives to address California's needs, strategies to address affordability issues such as increasing enrollment in the Affordable Connectivity Program and strategies to ensure an available and highly skilled workforce, including plans to attract, retain or transition the skilled workforce needed to achieve the plan's goals.

Our initial and final proposals will be informed by and complementary to and closely integrated with the Five-Year Action Plan and State Digital Equity Plan to address the goal of universal broadband access. Next slide, please. And this is the final slide, so here's an overview of what the CPUC has been doing to secure funding for the BEAD program. In November last year, the CPC submitted a fabric challenge to the FCC, identifying over 40,000 locations that were either missing or mislabeled.

Following that, the FCC added over 16,000 locations to the FCC's fabric in version two for California. In December, the NTIA awarded 4.9 million in federal funding to the state to do planning activities leading up to a Five-Year Action plan and launching of the BEAD Last Mile subgrantee program. The November version of the FCC's Availability Map had large inaccuracies and suggested California would be getting less than 1 billion of over the 42 billion available nationally.

Between the release of the FCC's November Map and January 11th, the CPC went through 9 million plus records reviewing broadband data for providers and submitted an availability challenge to the FCC. We're still working through that challenge in close partnership with the FCC's Broadband Mapping Team to try to make sure that the FCC's map on which the NTIA will determine how much money California receives is as accurate as possible.

Earlier this month, we filed comments to the NTIA on their proposed model challenge process, which will be central to determining which eligible locations there are for the BEAD program. As discussed earlier, the CPC is coordinating with the Department of Technology and conducting outreach activities and aligning digital equity planning with BEAD as the Department of Technology is the designated entity for the Digital Equity plan. I believe, so, I'll stop there. There's a lot of data here on this timeline slide, and I'll be happy to answer questions.

Thank you.

Thank you for that presentation. There's a lot of data and information to digest there. And before we move on to other members, I have a few remarks and questions. As you know, I've had my concerns with how the PUC has approached the implementation of the other broadband grant programs, especially the mapping process, and delay that it has caused the FFA. I hope we can agree that there are lessons learned. I always say in my office. There's no mistakes.

There's only lessons learned from our past experience, and we shouldn't have them again. When we're looking at the Bead funding, ideally, we would have been awarding grants from the FFA by now so we could have some recent data to turn to for better understanding of what's working and what isn't. As legislators, I think we want to be able to incorporate that experience so that we can make policy changes if necessary to improve the performance in California.

What concerns me most with the BEAD funding and the process is that there isn't a statutory framework for the PUC to follow when it comes to implementing this program. And respectfully, we've not heard from the Governor on his priorities on our suite of broadband programs and how BEAD might change or complement this approach.

Without a clear policy agenda from the Legislature or from the Governor it puts a lot of power in the hands of five unelected commissioners to completely control the entire program and a very, very large sum of funding. I realized it's still early in this process. There are a lot of unanswered questions and I saw even on one of your slides, you had lots of questions that you were asking, and that's why we're having this hearing, right?

It's a chance for us to learn from you and you to hear from us, and I want to start that engagement early and collaborate to make this program work for California. Our needs and broadband and digital equity are large, and I always say whenever we approach any policy issue in California, we're dealing with the inequities of the past, try not to repeat them in the future, and trying to compensate for what has not gone well in the past.

And that makes every policy area that we do in California more challenging, and yet, hopefully, at the end of the day, more rewarding for future generations to come. And as you know, I'm running legislation to address the implementation of BEAD, and I hope through this hearing, we can continue to learn and inform that legislation. With that, I have questions about timelines that I want to turn it over to my colleagues to ask their questions first. So do we have any questions for our Committee Members?

We're joined by Assembly Member Eddie Garcia and Diane Papan, as well as Mia Bonta. Any questions to begin?

So, thank you so much for the presentation. I would like to just get a sense of this integration and coordination between BEAD and Casa, if you spoke a little bit to that. Firstly, we want to just get an understanding of whether the Broadband Infrastructure Grant program, in the suite of programs that the CPUC administers is actually an opportunity for us to have similar funding criteria and rules across all three. So can you highlight what kind of coordination, integration you're doing around that?

Thank you, Assembly Member Bonta, for the question. It's an excellent question, and it's one that we think about and work on daily, essentially because we want the coordination to occur, but we also want to be attentive to the original rules and requirements that are set out by either federal or state rules related to how those different funds can be granted and distributed.

So we want coordination, but we also are trying to make sure that the different programs can cover different needs and gaps out there in the world.

So where one program may or may not cover, say, adoption, for example, and Director Osborn can provide more of these details, we want to make sure that all of our programs, I like to think of it as a jigsaw puzzle that we're in the process of putting together, that we have coverage in order to meet the needs of what we know and what we're hearing about from the workshops. So with that, I'll ask Director Osborn to speak to more detail. Thank you.

Thank you. Yes, thank you for your question, Assembly Marva Bonta. The outline of what I showed earlier showing the eligibility requirements, we're trying as much as possible to align so that we don't have differences when we're evaluating applications. And certainly there's also a timing aspect. So as I said earlier, the California Event Services Fund applications are due in June, so that's pretty soon, the BEAD program won't be opening up probably until next year.

So certainly any applicant that's interested in broadband funding, I would encourage to apply for CSF. And then next we'll be having the Federal Funding Account program.

Do you anticipate how will we as the Legislature essentially know whether or not there's complete coverage in terms of the different criteria or whether there's been that kind of alignment.

So, yeah, there will never be complete alignment with all three programs. Just as an example, the BEAD program has certain requirements regarding prioritization of competing applications that the CSF program doesn't have. And so when you have two applications for BEAD , for instance, for the same area, you need to also look at, and this is because of the federal program rules that require it, affordability requirements and fair labor practices is to what extent is the applicant applying fair labor practices?

And that's not something that's present in the California Event Services Fund application.

And just switching a little bit to the underlying goals of the BEAD Fund. So if the infrastructure grant account the goal of the infrastructure grant account is to connect 98% of households, the goal of the Federal Funding Account is not clearly defined. And I believe this has contributed to some challenges with that specific Fund. Does the CPUC have a specific and measurable goal in mind.

So I think the challenge we have is looking at the total need in the state versus how much funding is available. And this is where we see BEAD as really being complementary to CSF and the Federal Funding account. The last time we estimated the total cost to deploy fiber to all locations in California was in excess of 8 billion if we take into account the fire resiliency requirements for rural areas.

So when we're looking at all of the programs together, we see BEAD as a complementary program to these other two.

Thanks. I'll defer to my colleagues, but I did want to ask a bit about the integration of the statewide digital equity plan, a statute that requires California Department of Technology to develop a statewide digital equity plan, and federal requirements encourage the program to be implemented in a manner that reflects the state's digital equity goals. However, unlike other states, both processes are being implemented by different agencies, in this case in California.

So it's unclear to me what kind of higher level coordination is going to be happening throughout. I'm obviously very committed to making sure that we execute with Fidelity completing the digital equity plan. So can you share with us kind of an overlay of the timeline associated with implementation of the statewide digital equity plan and the relationship to finalizing the BEAD rules?

Certainly. Thank you for that question. So the state digital equity plan is under the purview of the Department of Technology. We are working very closely with Department of Technology on a daily basis and involved in the statewide digital equity planning process. And there are several components to that. There's a state digital equity planning meeting and then subgroups that are focused on the various outcome area working groups that I mentioned earlier that we're also addressing in the public outreach activities. These 20 events that we're doing.

The digital equity plan is part and parcel of this five year action plan, which is something that we'll be putting together. It's due to the NTIA in August. So that digital equity plan, as they say, the E and B is equity without BEAD, BEAD is bad. So the idea is that we have to have equity and the digital equity plan as part of the BEAD plan, and that BEAD plan is then part of the rulemaking.

Appreciate that. I'll defer. I have some other questions.

Yeah, thank you. Going back to it, I understand, and maybe this will be helpful. And we're joined by our appropriations Chair Holden, thank you for joining us. I think it'd be helpful for everybody to understand, the way I understand it is the PUC will need to request budget authorization to deposit the BEAD funding into a state account, and when can the Legislature expect that budget request?

So thanks for the question, Chair. On those budget type of questions, we would defer to our colleagues at the Department of Finance, but I assume we'd be using the standard budgetary tools and budget process.

And I think you've gone through key dates that we need to be aware of. I share the concerns that I think many of us have in the Legislature about the clarity we have about the different program schools and how they're complementary. I think that's really something, I don't know if you can speak to it. It doesn't seem like they're working together. So it's great to hear that. It sounds like you're meeting on a daily basis or a weekly basis to coordinate them.

That's not clear to the public how that coordination is happening and that the Middle Mile Funding, CASF, FFA, the BEAD is all working together. And I think it's great to hear that we have an $8 billion need, but we're not going to have $8 billion. So then there's the question of prioritization and equity, which I think is the center of this conversation.

So I'll open it up to any of my other colleagues if they have any other questions, otherwise I think Assemblymember Bonta and I have tons of questions, but if anybody else has any okay. Diane, did you have a question? Sorry, Assemblymember Papan.

I'm not going to be particularly articulate, but I guess my question is equity. How are you ultimately going to... where will the rules come from to ultimately determine where you're going to cut and where you're going to give.

There's a lot of workshops, a lot of input to create rules. And I guess my question is, when does that happen and what do you anticipate the criteria to be? Not particularly articulate, but I'm not coming away with a clear picture of how you're going to make decisions ultimately.

Thank you for the question. assemblymember. Yes, and I appreciate that. At the moment, there's an extensive public input process, which means that we are letting the process play out and gathering all the input that you saw on some of those slides. There are a couple of different ways that we, the CPUC will establish rules, but there are also rules already established, or at least criteria and guidance established in the federal notice of funding opportunity for BEAD.

So there is a certain amount that is derived already from that federal law and funding opportunity. Then the CPUC will use our rulemaking. As Director Osborn showed, there are a number of issues and questions teed up in that rulemaking. We typically have well over a few hundred participants in our rulemakings.

And so the comments and discussions that we receive there will ultimately inform commissioner decisions that set those rules and criteria about BEAD, for example, they also have the opportunity to continually set rules for programs that we also administer, like the California Advanced Services Fund. So we are midstream in a public process now. That process will flow into the rules that are set by the Commission.

if I may follow up. So it's going to be a combination of what's preordained and then what you're getting from the public?

Yes.

Okay. Because there's always going to be more need than there is money. Yes, I think we can all concur on that. So I guess my question is well, let me put it you indicated that we only got 1 billion so far that we're designated to get from the Feds. And you're trying to increase that amount, is that right?

That was the initial indicator from the FCC map as of last fall. We, as Director Osborn said, we challenged it, and we're continually working with the federal partners in order to increase that as much as possible. But you are correct, the range right now that we know of runs from 900 million to 2 billion. So we're doing everything possible to advocate to maximize that amount. But it is correct. We don't know where the FCC will land.

Do you anticipate that it would be partly based on population and then partly based on where we have a need?

That will be a technical detail I'll turn to Rob for. Thank you.

Thank you for that question. So there's 100 million that goes to every state right off the bat. And then on top of that, it's based on the number of unserved locations in each state as determined by the FCC. So that number of unserved is what we've been challenging with the FCC.

Got it. Okay, then I just had one more follow-up question on the data provided, and that was, on the financial or technical assistance you had indicated that you've received 52 million in apps and 36.4 had been dispersed. When's the rest going out?

Thank you for that question. So we are oversubscribed now for the non-tribal. There was 5 million set aside for Tribal.

Go ahead.

Okay.

So the non Tribal is already oversubscribed. So we'll be issuing grants up to 45 million, and those remaining grant applications will be awarded shortly.

Okay. Just curious. Okay, thank you. Certainly not my area of expertise, but you enlighten me a little bit. Thank you.

If I can go back. So we have three different programs, and they each have, I think as you've explained, they each have unique goals. So when you talk to normal people, not technical people, but when you talk to normal, everyday people, maybe at your outreach sessions, how do you describe what each program is meant to do and how they work together to get to the goal? Because the goal is the same, right?

The goal is to connect unserved or underserved that's actually not even clear, but unserved or underserved households in an equitable way. Right. And so when you describe the three programs, how do you describe that to people? And then how does that relate to the rulemaking that we have? Because each of the programs have different rulemaking around it too. So can you provide clarity on that?

Thanks for that question. I'll start there. So I am in the same shoes. I have to stare at this chart many times in order to try to remember all the pieces of the puzzle that we are trying to put together. The team under Director Osborn is much more technically fluent in all of this. And I fully recognize the challenge of communicating with people about all of these different opportunities and rules and programs.

The way we're approaching it is we are giving a lot of information at the workshops. There are a lot of people who may not ever need to really care about the differences in program rules as long as their digital divide in their community begins to be closed.

But one of the key groups who's participating at these workshops are local government, county government, consortium members, community colleges, technical colleges, providers who are interested in themselves, receiving a grant and beginning to develop those networks that can close the digital divide for their students, communities, populations that they serve.

They are the people that we are then connecting with our caseworkers in order to make sure that they have the technical knowledge that they need, or at least the access to the technical knowledge so that they can begin to submit the applications to the different programs between the caseworkers, and this is actually what the technical assistance grants accomplished as well.

I'll ask how many locations we provided the lot of grants to, but those grants enabled governments and these local providers to hire the network engineers and the people who are able to begin accessing the funding. So completely recognize that this is a very challenging, complicated technical area. We are doing everything we can to create those bridges through people who are providing people across California the ability to access the different programs and the different rules.

And so I get that you have somebody who comes to one of your workshops and they're like, this is my challenge. And then you can direct them. This is the best grant program for you. But when we look at it from the macro policy level, we should be taking a different approach. We should be saying, we have this pot of money. This has this goal with these set of rules. We have the middle mile, we have the FFA, right?

We have all these different things at the end of the day from the macro level. So you're talking about a bottom up process, which is fine. You want a bottom up process, but what's the top down process that we're like? This is how they all work together. It's fine to say we're putting together the jigsaw. It's like we're building the plane while flying it, which is maybe okay, but generally you want to know what the plane looks like before you start.

I should not do analogies before you get off the ground. I should not do this actually in the morning. So when you think about the programs, how do you see that jigsaw puzzle working together? Because it's fine that somebody comes in. I mean, I do have questions. Are we really getting are people in Oceanside coming to the San Diego event for example, I know that community from my old district, and I would guess that nobody from that community was probably at the San Diego event.

So you're going to have gaps when you do the kind of outreach you're doing. It's good that you're doing it. I want to compliment you on that. But my bigger question is, when you talk about putting the puzzle pieces together, how do you see them meshing together? Because if we don't have that vision, then we're going to have gaps and we're probably not going to close the digital divides like the intention is from either the Governor or the Legislature or from yourselves.

Do you want to take that?

Sure. Thank you for your question, Chair. So the way I see it is getting back to the high level, it's broadband for all. I mean, there's no simpler way of stating it. Everyone needs to have broadband. Now the question is how do we get broadband for all? And there's the challenge.

We've tried over many years with traditional approaches of having a map and having companies apply, but ultimately we have areas that doesn't prove out as a business case, which is why we are now providing local agency technical assistance to try and open up the universe of broadband providers. So it's no longer just the Internet service providers, but we're also trying to look at other options like public-private partnerships or a full public model, whatever we can get to close the digital divide.

And it gets back to what places still do not have broadband. Those are the priority. And how do we get funding to bring broadband to those communities? And that's sort of the general approach.

And then how do you see if that's the general approach? How do you see each of the programs complementing each other? Because they all have different rulemaking. So how do you see that working together? That's the macro vision. We want broadband for all. But you said it yourself, it's $8 billion in need and there's not $8 billion. So we're going to be making trade-offs at some point.

And I think ,I don't want to speak for my colleagues, but I would assume the Legislature's intent and I assume the governor's intent is to repair past inequities. You know, when we had the conversation about the FFA funding, about the equity maps that were not equity maps, right?

Like that's where we go back to see when you take it down from this vision of broadband for all, which is I think we all agree on, and you see the different programs feeding into that broadband for all, how would you describe the programs interlocking?

Thank you for that question. I think the way I see it is tools in the toolbox. Rather than trying to make a crescent wrench into a ratchet wrench, we've got different wrenches too. I'm sorry, I'm using metaphors here, but really, so you have different tools that can accomplish very similar things, but they're not the same tool and we can't make them the same tool.

So we really have to work with the tools that we have and try best through the case workers, through the regional consortia to explain and continually have the discussion about which program is more appropriate. How is this program going to help you over this program? As I was mentioning earlier, there's also a time component in terms of when applications are due. So some entities are ready now, some won't be ready for another year.

So it may be appropriate a year later to apply for BEAD, or it might be appropriate to file for the second round of the federal funding account. So those are the sorts of considerations we take into account.

Just I'll switch to the Five Year Action plan process for a moment. Will the CPUC commit to releasing the draft plan before it's submitted to NTIA?

Why don't you go ahead?

Yes, thank you for your question. Yes, we will. We have to release it to the public for public comment and it will be available to everyone well before it's submitted to the NTIA.

And how will you be including feedback from the digital equity plan process?

So feedback from the digital equity plan is managed by the Department of Technology. The digital equity plan itself becomes part of the Five Year Action Plan. It's actually a chapter of that.

All right. And just again, integration. I know that different departments and perhaps we should have had both departments on some of these issues.

If I may, Assembly Member so California Department of Technology and the CPUC are co presenting and co working the workshops. And so that same input that we are gaining from the workshops, CDT is gaining and feeding into their digital Equity plan chapter. As it is, we're using the same workshop so as not to wear everybody out, we're using the same workshop to achieve the input that we need for both documents.

Okay, thank you. I'll switch for a moment to integration with the statewide.

Just one second. We did give the Governor the opportunity to invite who he thought was appropriate to this hearing and we were given the CPUC and not CDT. Just let you know.

Integration with the statewide middle mile, what do you see are advantages and drawbacks of requiring an applicant to connect with the statewide middle mile?

I'll start with that one. Thank you for the question. So the middle mile is a significant investment by the state in a trunk line that then locals across the state will be able to connect to. So that is the major advantage is fiber is being brought closer to the communities that need it more to add.

Yeah, certainly. I think what's happening with the statewide middle mile is potentially a big reduction in cost for providing middle mile services. And traditionally, middle mile has been a barrier for last mile deployment, either lack of availability of middle mile or overly high cost. So it saves the last mile applicant significant money in the application. It means we can use the last mile funding for more locations rather than paying for middle mile.

And do you believe or are you aware of any kind of challenges in terms of determination for coordinating across projects with the statewide middle mile? So in instances where providers are waiting to hear back from CPUC or CDT on the amount of time it takes to be able to ensure that there is that connection with the statewide middle mile, are there any improvements, do you think, that you all can make to make sure that there's more integration in terms of decision making process?

Yes, thank you for your question, and I think what we've seen over time is the Middle Mile locations have become more defined. We now know where the Middle Mile will be going. We have better coordination with Department of Technology. We actually require last mile applicants to consult with Department of Technology if they have a middle mile component in their application so that we're not duplicating funding.

And in a case where we're paying for a middle mile location, middle mile connection, we require that that be open access. So it essentially works as extending the middle mile from where it's already being constructed.

I have like a logistical question. The middle mile won't be built out till 2026. Right? That's the deadline for that. And so our applications are ongoing, and if they connect to the Middle Mile, but it won't be built out to 2026, how are you coordinating that discrepancy and timeline of applications needing to get the funding out the door and the Middle Mile maybe coming in after the fact. Right. In that jigsaw piece, it seems like there may be two different puzzles going on.

Thank you for your question. So I agree it sounds logistically strange. Right. I know that the 2026 is the deadline for liquidation. So it's not that everything will complete on December 31, 2026. We expect the middle mile to be completed leading up to that point. So it's not everything's done on one day. It's over a process of time.

Yeah, but what does that mean in the logistics? I'm doing an application for a last mile. My Middle Mile may be on a map somewhere, but I don't know at what point it's going to be completed. How do you evaluate that? Because then there's a real fear, I think, of building the last mile. Or you have two fears of one, you're building middle mile to nowhere and there's no last mile provider, so you're building broadband to nowhere and you're not serving anybody with those dollars.

And then there's the other fear of you're building the last mile. But maybe that middle mile never actually gets built, never actually gets funded. And so how are you coordinating those two things?

Thank you for your question. The middle mile coordination, I think you raised a really interesting and important point. Ultimately, we have to determine, and this is part of the Bead proceeding, whether and how we require usage of the statewide middle mile with regard to timing. So in a last mile grant application, we have what we call essential middle mile.

So if you're building a last mile program and you don't have a middle mile, then you have essentially an essential middle mile part of that component that needs to be funded.

I think a lot of this is going back to one of the Legislature's priorities. When we passed SB 156, was there to be a broadband Czar and the governor's office to coordinate these broadband efforts across state government. Right. What we're hearing is there's coordination, there's timing, there's different programs. And to what extent is the governor's office giving policy direction on the implementation of the digital equity Plan and Bead?

Thank you for the question, Chair. I would say that we're all working at the direction of the Administration, and this coordination that we're doing is at their direction.

So do we have a broadband Tsar and we just don't know about it?

I would have to let the Administration speak to that.

Can I just ask a few questions about the matching Fund requirement? Does the CPC, other broadband infrastructure grant programs, require matchmaking funds?

So the short answer is no. But there are points awarded in CSF if you have matching funds, but it's not required.

And right now, it's a 25% funding match. Right?

Right. So the notice of funding opportunity for Bead requires a 25% match.

And has the CPUC considered using existing streams of funding, such as Casa funds, to help applicants meet the 25% match requirement?

Thank you for your question. So that has not been decided yet. It's something that we're considering.

And what are some of the barriers to this and what are the considerations that you are factoring in?

I'm not sure. We'd say there are barriers. It's more that there's a live rulemaking and the commissioners would have to be presented with a proposal that they can vote on.

Do you think that the 25 match requirement is going to be a hurdle for some applicants?

Yes, I do think it could be a hurdle for some applicants, yes.

Any creative thinking about how we might be able to decrease that hurdle so that we actually have an opportunity? The way that you get equity is to be able to reduce the barriers and hurdles.

Yes, absolutely. Thanks for the question. And I think, yes, we very much would like to make the opportunities as flexible as possible, and that's the opportunity that we'll have through the rulemaking to allow other streams of funds to be used as that matching Fund.

Madam Chair. Thank you, Senator Bonta, for the line of thinking questions that you've put forward. I'm wondering, on a time frame, right. Have we identified any of the processes that might be able to be accelerated to the extent that we're able to roll out some of this money? And when I say acceleration, I'm not talking about cutting any corners, but just simply looking at the timing and the opportunity to move this money a lot quicker out the door. Any thoughts on that?

Has there been any consideration along the way on where we might be able to condense our timelines to be able to get this money out?

So thank you for the question, Assembly Member. I'll start with what's about to happen with FFA funds, and then maybe Director Osborne, maybe the team has had some thoughts about expediting it, per your question. So late June, early July, our first application management portal will open. We've already been doing tutorials with local governments and local possible providers about using the system and the types of materials they'll have to submit in order to apply so that will open.

So beginning in July, applications can start coming in, and we anticipate as we approve applications, that FFA money will start to go out the door. So there is an initial flow that's on the cusp of beginning as far as moving up timelines and getting other funds out the door faster. I'll turn to Director Osborne.

Yes. Thank you for your question, Assembly Member Garcia. The challenge, I think, comes when we have applications because it is a complicated process. And so I think the degree to which we can facilitate applications at the front end, it saves time down the line when we're evaluating applications and have to go back and ask for more data or more information from the applicant. So I think front loading the application process saves time in the long run.

But are there any timelines that the CPUC is set, the 30 day review, the 45 day review, and I'm just pointing out days numbers hypothetically, but are there any of those review time frames that might be able to be shortened?

No, we appreciate the question. We'll take that back, Assembly Member, and consider it and get back to your office if we can. Thanks.

Well, and I think to Assembly Member Garcia's, .1 of the concerns that I think we've shared in this Committee is around timelines and getting money out. And if we look over the last two years, Casa has issued, I think it's $113,000,000 in grants from $150,000,000 Fund. We're looking at issuing another 2 billion in FFA and potentially over a billion in Bead.

And when you look at the intricacies of wanting to get it right versus the expeditious nature of needing to get the money out the door, I think there's a concern with how long it takes to get these applications through and will we actually end up running out of time, right? I think that's not meant to be a critique. It's meant to be a real concern.

I don't know when I came in this morning, I saw all the construction, or there was a bunch of us came in from San Diego, from the airport yesterday, and we had all this construction through San Diego. And I made a comment like, zero, my goodness, when all the FFA funding goes out right, how are we ever going to get to work? Right? And that's one of the things about staging the money.

And when you look at 113,000,000 has been issued and the billions that still need to be issued, there is a concern about how do we kind of shorten those timelines, how do we have an equitable and informed yet tight process for getting the money out the door? Because what we don't want is in the last year, we're rushing to do that. And we know when we rush we take things that are expeditious, and equity is never expeditious. Equity needs that thoughtfulness, right?

Otherwise, we're just going to redo the errors of the past. So there's a balance to be reached. But one of the concerns, I think, to Assembly Member Garcia's points would be to look at what part of the process can be truncated. So we're getting the dollars out the door sooner because an applicant doesn't know if they're CASF FFA or Bead. Right. So if we're taking a long time to get the FFA funding out and we say, well, you can do Bead later right.

Because you've kind of said you've staged it. Right. And the amount, the longer we push out the FFA, the more we have a problem with bid because people need to get those dollars up door. We need to see how are we doing this? We have the middle mile that needs to get built, because if we don't have the backbone, then you have a problem reaching those equitable areas.

So I think that it's an important kind of thought to have in terms of ensuring that we're getting the dollars out the door, because 113,000,000 versus billions is a lot of zeros. Right. So I don't know if you have a comment on that, on how you're thinking about having a transparent process that's thorough but also expeditious.

I'll respond briefly, Chair. You are very aptly describing the exact tension that we believe in the same thing. Thoughtful, yet expeditious. Careful, yet expeditious. So we very much feel the desire to get the funds out into the world, to begin working in the world. And so we'll take back the question and the comment and really look at our own process of where we can shorten time frames in the coming staff review of applications. Thank you for the point.

Thank you.

Just ask a follow up question for that. So in 2022, the calendar year, how many new applications or awards or any new broadband infrastructure grants did the CPCU award?

Let me see if Director Osborne has that detail at its fingertips.

Yeah. So the California Advanced Services Fund infrastructure grant account rules, we updated those last year, so we did not have an award grant window during the calendar year. 2022, the awards we did make were very few because they were makeup from the previous calendar year.

So no awards in 2022?

No new awards because we didn't have a new application cycle. Correct.

So is it safe to assume, just based on past practice, that it's going to take you that there's going to be a lull year for us to be able to actually have the awarding of even more dollars?

So if I can distinguish between the California Advanced Services Fund, where we have an on which has been in existence for 10 years, we have ongoing cycles of program rules, updates, and then grants being made.

So I don't know if you have any stats about applications for California Advanced Services Fund that might come in this calendar year and then distinguish that from the Federal Funding Account, which is the Fund grant management portal that's about to open, where applicants will begin to apply for that federal and state money. Any other updates?

Yes, Assemblymer, I think you mentioned Lull, and there will be no Lull this year because we've done the rulemakings. So CSF application window is closing this June 1. So applications coming in this year, federal Funding account rules have already been created. That application window will be opening at the end of June, and then bid will be next year. So there's no rulemaking that's holding up grant applications.

And are there any federal guidelines placed on or requirements placed on CPUC to review applications in a particular time frame or in a timely manner, or to open grant cycles at a particular schedule?

No specific dates in the Federal rules.

Would it be helpful if the Legislature helpful or hurtful if the Legislature contributed to some set timelines and schedules that might ensure more regular cadence of application review?

Thanks for the question, Assembly Member. So we're definitely open to dialogue, as we're having today. Since we are about to start reviewing and making grant awards for the Federal Funding account. I hope that we demonstrate to you that we are getting those funds out the door on this same thoughtful yet expeditious timeframe.

Thank you.

I would say we haven't yet opened the FFA funding. You said it's about to open, so you're probably not going to make I can't remember the timeline, but I think you're not planning to make awards till later this year, right?

Correct.

Yes. So I think you're hearing a concern from the Legislature around timelines, which I think we've expressed before. And another concern around the timeline is if legislation is passed, the session that pertains to Bead, will there be enough time to integrate the legislation into your ongoing procedures, notably with AB 2749 of 2022? The governor's veto message was that there was not enough time to implement the Bill without causing further delay, but that was never expressed.

If there's not enough time to implement legislation, how would we best work together with you on Bead implementation? Because I think you're hearing know, I think we share all the same concerns. So if there isn't enough time to work on kind of improving the process for Bead versus FFA, how would we best work together?

So I'll start with just looking ahead to the very near future. As Director Osborne noted, we are submitting our five year strategic plan in mid August to NTIA for.

So when will it be available for public comment? Because you said there was a public comment period yes.

Which will be in front of that before that.

So, like, any day now, we're expecting a five year plan?

No, it'll be in July. It won't be prior to that.

What was the public comment period on the five year plan.

30 days ahead of when we have to submit it. So mid July for a mid August submittal.

So you're going to make it available for public comment, but there would be no process for changing it before so we'll see it, we can comment on it, but if you only have 30 days, then we can't change it.

We'll take the comment in and make appropriate changes. Yes.

Any other questions, Mr. Holden? Assembly Member Holden.

Changing topics for just a moment, I wanted to get your thoughts on in terms of the geography and how areas are selected. So the federal guidelines are fairly flexible in terms of whether soliciting proposals from applicants to identify areas on their own or the state can be more prescriptive in giving direction on what they believe are the areas that should be identified census tracks, blocks, cities, et cetera.

The CBUC have an idea of which direction you might be leaning in terms of how these areas because clearly part of the major issue is with the donut hole and communities kind of getting left out, this seems like an important area to really make sure that that is closed. So what are some of the thoughts that you have in terms of latitude to the proposers or to be very clear about where you'd like to see these areas identified?

So I'll begin, and then I think Director Osborne will have more technical detail. One way we're looking to accomplish that, Assembly Member Holden, is through the criteria that we're setting out for the Grant Awards. So we have used the criteria in order to prioritize unserved and Low income or disadvantaged areas as a way of attempting to get at exactly the areas that you're talking about.

And that is also why this early work that we're doing through the Technical Assistance Grants, I hope has been helpful to those who've received those Technical Assistance Grants because they've been able to look at their communities and understand where those donut holes are, understand where the unserved locations are, and prepare to propose applications that provide coverage. There. Any more technical to add?

Yes. Assembly Member Holden, you mentioned sort of the application unit, I think, location versus area or census block. And that is one of the areas of inquiry we have in the open rulemaking right now asking for parties to comment on.

And I guess to what direction through this process do you think the Legislature could be helpful? Or is there a point in time that you would? And I know the rulemaking process has got a life of its own. But is there value at some point in the process of finalizing a decision that the Legislature should look to weigh in if there's thoughts that we may have? Any initial thoughts?

I mean, I just would echo what Executive Director Peterson said about ongoing dialogue. We'd certainly like to have that conversation with you.

And just real quick, what are the requirements of other programs? And might the Bead rules be different? And if so, why?

All in all, Assembly Member Holden what we're trying to do is ensure that we are closing any potential gaps. So this goes to several questions by the chair at the workshops. I have been thinking back during our conversation and really heard from local participants about kind of three major areas. Affordability of service was a huge one, existence of actual infrastructure, so the fiber reaching the actual locations where there is need.

And then third was a lot of issues around education, adoption, having a device, using a device, understanding how it can be used. Now, we're still midstream on the process, and so I can't speak to how we'll write our strategic plan to cover those. But those are the three major themes that have stood out to me from the workshops that I've attended.

And so my intention would be to make sure that our five year strategic plan and all the other programs are I'm going to return to the jigsaw puzzle metaphor, but are really putting the pieces together to cover those three significant areas that we're hearing from. And we're hearing this from persons who've had contact with the justice system. We're hearing this from foster youth and social workers. We're hearing this from people who work with senior citizens.

Just to give you a few examples of the covered populations that we're working with at these workshops. And so the aim would be to make sure that the programs all do fit together in order to cover those different types of needs that are being expressed.

Okay, I would like zero, do you have one final question? We do have a second panel, too, so we're going to have one final question, then we can wrap up.

I got a comment, and I got a question. I just want to say a program that's been around for 10 years probably already has some existing rules. So the fact that it took a year to update those rules without grants being made does cause me a little consternation. I think we can do better from a bureaucratic standpoint. Appreciate that. If you don't mind the criticism.

Then the other thing is, do you take into account any technical advances like micro trenching, such that it may as we go through this process, which seems to take a long time, are you taking into account that things can get cheaper as we go along? Do you want to speak to that?

Yes, thank you for your question. That's an excellent question. We do take into account technological advances, and that really shows up in the application itself. When we look at the cost per mile. If it's come down because it's become more efficient, that definitely plays a role.

Okay, good. Thank you.

Okay. With that, I want to thank you both for your time. I hope you remain present in the room for the next panel and through the public comment portion of the hearing. If you want to take your seats, we can call up Panel Two to hear from stakeholders whose organizations have been closely involved with the implementation of the B program here in California and across the nation. The following witnesses may approach the dais. Ryan Johnston, policy counsel for next century cities.

Patrick, I'm going to get this wrong. Mazek Mesick, Director of Oakland undivided California Alliance for Digital Equity. Ready. Lynn Follensby, Vice President of US. Telecom, the broadband Association, and Janice Norman, President of California Broadband and Video Association. Sorry.

So we're just going to go from left to right around the room. And again, Members will hold our questions to the end of their presentation, if possible. And with that, Patrick, you may begin.

Today. I am also representing CADE, the California Alliance for Digital Equity, a statewide coalition. We lead with partners including RCRC, NextGen Policy, Common Sense Media, Media Alliance, the Children's Partnership, California Community Foundation, and Mickelson Philanthropies.

Thank you, Madam Chair, and Members of the Committee, for your continued engagement on the critical issue of closing the digital divide. I am Patrick Messac, Director of Oakland Undivided in that role, I lead an equity based collective impact initiative to close Oakland's digital divide for good.

I speak today on behalf of the hundreds of thousands of Californians who remain on the wrong side of the digital divide. Low income Californians immigrants, people of color, people living in city centers, in rural communities, in exurbs and suburbs alike. I speak for Californians who live in communities and neighborhoods that have seen decades of divestment and underinvestments.

For many, dating back to the redlining maps of the 1930s and 40s that deprive them of capital investments and thereby economic, educational, and civic opportunities, the persistence of the digital divide is no accident of history.

Today, the impatient capital of private industry, beholden to $1.0 billion quarterly projection, consistently replicates historical patterns, disproportionate investment in higher income, predominantly white communities, and a resolute avoidance of systemic solutions that may truly change the status quo.

A UC Berkeley study found that the median incomes were $41,000 higher where internet companies chose to build fiber in California. And that's just one of many analyses documenting that companies routinely engage in digital redlining, bypassing low income communities when they build or upgrade infrastructure.

Now for some good news. This is a generational moment in broadband infrastructure funding, and it has the potential to dismantle the digital divide, but only if common sense prevails. In east and West Oakland, 36,000 households are disconnected.

You'll find the vast majority want home internet but lack access because of two inextricably linked factors infrastructure and affordability. Let's begin with this focus solely on infrastructure and what industry jargon would have us call unserved and underserved.

Unserved locations: any can't access the Internet because of there's no Internet connection in their home. There's no technical way to connect at any speed, at any price. This is a pervasive barrier in low income communities, tribal and rural communities alike.

In Oakland, a study conducted by Education Superhighway of over 34,000 Oakland Unified School District student addresses found that 7% of all households had no access whatsoever to any wireline infrastructure. That's over 2000 households. And this is a study only accounts for a fraction of Oakland's overall housing stock. Underserved locations. Countless others can't access the Internet because the options available to them are substandard.

It's old or poorly maintained technology that doesn't meet modern needs, associated with access to essential services like telehealth, remote work, online learning and public benefit. I've surveyed the cabling closets in East Oakland's largest public housing communities and witnessed firsthand archaic telecommunications technology degraded copper cabling from the 1970s, allegedly serving entire communities, both unserved locations, those without any infrastructure, and underserved locations those rely on legacy infrastructure must be served by Bead.

Fortunately, the CPUC has already started mapping these locations in Oakland and across the state on the recently updated Broadband State Interactive Map. But if this map is going to help determine which communities get funding, as is currently proposed, a lot more red dots need to be added to that map. Oakland currently has hundreds. There should be thousands.

The state needs to implement a challenge process that identifies additional locations at scale by using community collected data, sometimes called crowdsourced, something I'm hoping we can get into a little more detail here today. Importantly, service maps, even accurate ones, will only get us so far.

Trying to solve the digital divide by allocating Bead, CASF, and DEA Dollars based solely on where incumbent Internet service providers tell us they do or don't serve makes about as much sense as trying to tackle child hunger by asking Kenmore and GE to tell us which households have a refrigerator. The existence of wiring alone doesn't guarantee home Internet service any more than the presence of a fridge feeds a hungry child. Yet this is what we're doing now.

We're basing critical decisions on an unreliable metric, which is provided by companies with a profit angle on any solution, and we're allocating funding for a solution that will not directly adjust the core problem we're trying to solve. The conversation with Bead can't start and end with infrastructure. Affordability is essential. The single best predictor of whether you have fast, reliable Internet is whether you can afford it.

In survey after survey, the lion's share of people who don't have Internet at home say it's because it's too expensive, and we aren't going to coupon our way out of the digital divide. Funding for the Affordable Connectivity Program will run out in the early months of 2024. Fortunately, Beat includes a mechanism to ensure affordability.

Federal guidelines will empower the CPUC to set a pricing standard for low cost plans, and California should continue to lead the nation's progressive push by establishing a baseline that guarantees access regardless of zip code. Oftentimes, the conversation around infrastructure and affordability are separate. But we have to challenge this notion we cannot have infrastructure without affordability, and we can't talk about affordability without infrastructure. These two barriers are inextricably linked when we talk about broadband for all.

It is at this intersection of affordability and infrastructure that we find the final solution for affordability that we'll discuss today. Competitive Markets today, more than two thirds of Californians have one or no options for high speed Internet access. There have been many studies within the last several months documenting the impact of monopolistic markets in Low income communities. Independent journalists, nonprofits and universities arrive at the same findings time and again.

The lowest income communities were stuck with the worst deals, higher prices for the same speeds as their wealthier neighbors. Importantly, in areas with competition between providers, advertised speeds were more affordable. The link between infrastructure and affordability is clear. Monopolistic markets in low income communities make the Internet unaffordable and inaccessible to hundreds of thousands of Californians. Beads is our best chance to reverse digital redlining.

To connect all Californians, we must build open access, affordable infrastructure that fosters competition and spurs innovation in neighborhoods bearing the brunt of the digital divide. Up until recently, the limited industry provided selfreported data has generally shaped our understanding of the digital divide. However, the data presented in this testimony from reliable third party sources showcases the on the ground reality.

While many an industry may attempt to label any beat investment in an area they purport to serve an overbuild and a waste of public dollars, mountains of research and importantly, common sense shows that investing in the lowest income, least connected communities with a clear eyed understanding of the link between infrastructure and affordability is the only viable path towards universal equitable access.

This time will be different beads once in a generation investment of over $1.0 billion, which took a global pandemic to unlock, has the potential to close the digital divide for decades to come. At Oakland Undivided and at CADE, we are ready to be a resource.

10 seconds.

A bridge between the hallowed halls and the communities with most at stake in the decisions you make, and a partner in charting a path that finally, for generations to come, delivers on the promise of broadband for all. Thank you.

I should have said, I think we have five minutes for each of you.

So thank you, Chairwoman Boerner and other distinguished Members of the Committee, thank you for the opportunity to testify today. My name is Lynn Follansbee, and I'm the Vice President of Strategic Initiatives and Partnerships at US Telecom, a national trade Association representing network providers, technology innovators and suppliers committed to connecting the world through the power of broadband. Our diverse membership includes a range of the largest to the smallest local providers throughout the urban and rural communities of California.

As a collection of the leading broadband providers across the country, us Telecom are experts in the area of broadband deployment and have created a collection of key best practices that will ensure successful implementation of the Bead program. And I'd like to share some of those with you today. First, experience matters. The goal of the program is to deploy high quality broadband as quickly as possible to those who need it.

So state leaders should insist upon partnering with those providers who have a proven track record of success. Broadband deployment of secure networks is very difficult and capital intensive work. But even more importantly, it is not a set it and forget it technological endeavor. In the last five years, alone, US. Telecom Members in California have invested more than 15.6 billion in infrastructure laid 10 million fiber miles, creating a more dynamic and highly competitive market.

Since 2015, download speeds for the most popular tier of service increased nearly 130%, while prices dropped by over 52% from 2021 to 2022, the price of the most popular broadband speed tier fell by 14.7%, compared to the cost of overall goods and services, which rose by eight. The most successful path forward to expand broadband networks that allows governments at all levels to have input while also allowing robust participation by private providers is the public private partnership model.

This will allow broadband deployments to keep up with the pace of technology, frequent network upgrades, ensure cybersecurity protections, and ensure that we do not gamble with this once in a generation opportunity we have before us today. Holistic and Scaled Builds While the Infrastructure Act specifically states that unserved consumers are the priority, it also allows for the funding of underserved areas those without access to service at speeds of 100 over 20 megabits per second.

As such, California should select proposals for Holistic scaled builds builds that cover the widest swath of underserved and unserved locations as possible, leveraging providers who can prove postconstruction stability and maximize efficiency.

This will make the best use of funds, as it will be less expensive for a provider to reach both unserved and underserved locations in a single build. Funding proposals for exclusively unserved locations in isolation will result in fragmented Swiss cheese coverage, which is economically inefficient and creates an unsustainable outcome.

Furthermore, California should not implement caps on the amount of funding for any one project. While this concept may seem like the way to ensure that the Bead allocation given to the state stretches as far as it can, this concept is a remnant of previous state broadband funding efforts that manage much smaller budgets. Following that structure here will work to restrain rather than leverage economies of scale and help to drive deployment efficiencies, and it is simply counter to the entire purpose of Bead.

Set your community up for Success California and its communities should also ensure that their rights of way and permitting processes are as streamlined as possible. This includes coordination with other branches of government and easement holders like railroads.

Whereas some states, like Colorado have implemented a broadband ready program which incentivizes such streamlining, Caltrans, continues to increase permitting requirements and costs, and has failed to seriously consider microtrenching as a viable option available, affordable broadband for all affordability is the key component of universal connectivity and is required as part of the state's Bead program design.

Fortunately, the Infrastructure Act has established the ACP, which gives a discount of up to 30 per month to help qualified households get and stay connected to the life changing possibility of broadband. Nearly 18 million low income households have already participated in Bead, and US. Telecom continues to go on Capitol Hill urging the continuation of this critical program.

California should require broadband grant applicants to participate in the ACP or require applicants to commit to affordability requirements that are consistent with federal requirements and those of already existing similar programs. Any methodology which would seek to set rates would be considered rate regulation, which is not only impermissible under the Infrastructure Act, but would also most certainly deter provider participation.

Additionally, to implement an effective Bead program, the CPUC must steer clear of replicating some of the administrative hurdles that have bogged down the CASF. Implementation of the CASF has been known to place unnecessary and costly requirements on providers.

In one instance, a provider was required to take on the much more expensive effort of boring fiber in a very remote area so as not to disturb animal nesting potentials and flowering areas when ultimately Caltran subsequently came along and graded the entire area.

This lack of interagency coordination is costly. It's these sorts of measures which make the program unappealing to small local providers and takes funding away from connecting the end user. The highest priority for the Legislature and the CPUC should be implementing the use of the existing American Rescue Plan Act in capital Fund dollars and the forthcoming Bead funds without delay.

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Currently, there are many other states which have already awarded these federal programs to last mile projects. Meanwhile, the 2 billion allocated for California's last mile projects remains uncommitted and sitting in the FFA. Thank you for holding this informational hearing today and for the opportunity to share some thoughts with you. US telecom and our Members stand ready to work with the Committee and State and the State of California to connect all communities once and for all and close the digital divide.

Thank you.

We are a nonprofit, nonpartisan organization born of the need to elevate community level perspectives into broadband policymaking at every level of government. Our organization is made up of over 200 Members across 40 states, including 32 here in California.

Chairwoman Boerner and distinguished Members of the Committee. My name is Ryan Johnston, senior policy counsel for federal programs with Next Century Cities. Thank you for inviting NCC to be a thought partner on this important issue.

Over the last four years, Californians have learned the critical role that affordable, high speed Internet plays in completing tasks. Accessing the essential services that we often take for granted education, health care, public safety, economic development, and staying connected to friends and family are now directly related to whether a resident has an affordable, reliable broadband connection and the skills to utilize it.

In California, approximately 10% of the population does not have reliable broadband access. That means that over 2 million individuals and households cannot search for jobs, utilize telehealth, work, learn, or get emergency information from home.

The Broadband Equity Access and Deployment Program will provide an unprecedented funding opportunity to California and its communities to help close their digital divides. California's share of the $42 billion in federal funding will inject almost $1 billion into infrastructure, deployment and digital equity inclusion programs statewide.

For the BEAD program to reach its full potential, the Assembly and the CPUC must work in close collaboration with municipalities across the state. Historically, municipalities have had to address deployment, adoption, and inclusion efforts alone, which makes them key partners now.

For example, the City of Long Beach, California was working close to close its digital divide long before the pandemic struck. In 2017, with the support of the Long Beach Community Foundation, the Long Beach Media Collaborative was formed to help understand the city's digital divide.

Their research found that the City's disparities in broadband Internet access correlated with race. Almost one in five Latin American, Hispanic, black or African American residents did not have a broadband connection at home. To combat this, the City designed and implemented a citywide fiber optic network that connected city facilities delivered a fiber backbone within 2 miles of any location in the city, increasing broadband for both public and private use.

The City also launched a digital inclusion initiative that held workshops and pop ups to better understand residents lived experiences so that they may figure out what was contributing to the City's digital divide. Five years later, almost 90% of the city has a broadband subscription, and 96% of households have a computer. However, the Bead program is not just for the deployment of network infrastructure.

It holds equity and adoption amongst its central tenants and determining how state and digital equity plans should be constructed or how Bead applications could weave in equity considerations. Both the Assembly and the CPUC should look inwards to the California communities that are leading the charge on these issues. Chula Vista is a national leader in civic innovation. In June of 2020, the city released its digital equity and inclusion plan.

Chula Vista's plan took a holistic approach to digital equity, not only looking at who is impacted by the digital divide, but exploring the systemic issues that prolonged disconnectedness. The City learned that the common drivers of its digital divide were affordability, access to devices and the need for digital literacy skills.

The report recommended numerous ways in which data could be continued to be collected, city resources could be leveraged to lead outreach and digital literacy education efforts, and how to connect, equip and train the community.

In addition to these recommendations, the report also suggested potential metrics the City could use to gauge success, including percentage of connected adults, the cost of Internet access, device ownership percentages, and the number of monthly digital literacy courses provided among the city, amongst many others, local leaders didn't just stop there. Just last month, the City began hosting table discussions to inform a new Justice Equity, Diversity and Inclusion program.

With dedicated partners like Chula Vista, the State and CPUC can learn what types of data collections have worked and how to promote participation in many of the digital equity initiatives. The BEAD program is designed to help create finally, communities are natural problem solvers. The City of Gonzalez realized that Unemployment Insurance applications, educational opportunities, and other municipal benefits were migrating online and that many of the city's 10,000 residents would be unable to access them.

As a result, at the beginning of the Pandemic, the city deployed over 2000 WiFi hotspots to keep its residents connected to critical services. Similarly, in San Rafael, when 39% of Canal neighborhood residents didn't have access to broadband at home and 57% of residents didn't own a connected device, local leaders recognized broadband access as a bridge to government services and other benefits, such as education.

They understood that reliable and affordable service would enable residents to access emergency information during power outages, especially when television or radios weren't working or cell towers were down.

In conclusion, local perspectives make state policy more effective. Communities continually find ways to fill in broadband gaps, particularly in areas with low economic returns. State officials should take the Beads requirements to work with communities seriously. Doing so would help this body and the CPUC develop a state grant program that generates new or builds onto existing broadband infrastructure. I thank you all for your time, and I look forward to your questions.

Thank you.

Thank you, Madam Chair. Janice Norman on behalf of Cal Broadband, the California Broadband and Video Association really appreciate the opportunity to participate in the hearing and share with you the thoughts of our membership Cal Broadband's Members. And again, we are the cable broadband providers within California have collectively invested more than 45 billion in California's broadband infrastructure over the last two decades.

And thanks in large part to those investments, more than 96% of California households have access to fixed broadband at at least 100 megabytes download and 20 megabytes per second upload speeds. The BEAD program represents a tremendous opportunity to accelerate California's efforts to bring high speed broadband to the remaining unserved and underserved areas of the state.

If implemented effectively and in partnership with the private sector and in conjunction with the existing state Last Mile Project grant programs, the BEAD funding and its share, California's share of the $42 billion represents an awesome opportunity to close the existing broadband availability gap here in California.

However, when we recognize the historic nature of this BEAD investment, we also have to be realistic that the available funding is simply not enough to connect all unserved households, especially those in less dense and harder to reach rural areas.

So it's vital that BEAD and other broadband grant programs continue to make a primary focus of getting service to the unserved households and that the state does so in partnership with incumbent providers who are able to provide matching funds so that we maximize the availability of state resources. Every dollar from a broadband grant program that goes to an already served area will directly prevent closing the vast majority of the broadband availability gap.

We look forward to working with the Legislature and the PUC to implementing a broadband BEAD program that has fair and reasonable rules that leverage public money and help California's share of federal funds go further to achieving 100% high speed broadband access. Let's just look at some of the numbers and why we believe connecting unserved households has to be the paramount priority. When we look at the PUC's Broadband Investment model it lists, or it states that there are approximately 177,292 unserved locations in California.

We will also know that that number has been updated in the latest Casa report, which would list that number at around 905,866 unserved households. When we think about closing the availability gap, being hyper focused on addressing these unserved areas is key to making sure that that availability map, which is a key component to ensuring California can then utilize its resources to address the affordability gap, is actually paramount. Three steps to eliminating that availability gap.

First and foremost, the Commission should focus on a selection criteria that are mandated by the NOFO and that will effectively and efficiently advance the goals of the BEAD program, including prioritization of unserved and underserved areas requiring matching fund contributions that maximize the impact of public funding and promoting broad participation and robust competition for sub grants.

A successful BEAD program in California should encourage robust participation by experienced providers with track records of deployment and innovating broadband infrastructure by including the following things number one affording the highest priority of proposed projects consisting entirely of unserved locations. Two, affording additional weight to applications that propose connecting a greater number of unserved locations rather than unserved locations and three, affording greater priority to proposals by applicants that provide matching funds in order to maximize and multiply the impact of available BEAD funding.

Again, when we look at the opportunity that the BEAD program represents, it gives us the chance to close the availability gap and recognizing that that opportunity exists, partnering with those individuals that can provide additional matching resources to get us to the 6.3 billion that is estimated in need or actually higher if you include the firing. Hardening is paramount. I look forward to answering any questions from the Committee.

So thank you very much for all of your presentations. Do any Members have any questions before I begin my questions?

Yes. Family Member, Hoover.

Thank you. Let's see here. So just kind of more general question for anyone that wants to answer it. California obviously has been experiencing delays in the Administration of American Recovery plans, broadband funding. So with that in mind, how should the state or what would be the best way for us, the state, to ensure that the Bead funds do not experience the same challenges that we've seen in other programs?

I'm happy to take a stab at that. Thank you for the question, Assemblymember Hoover. I think, as my colleague here noted, the NOFO has set out requirements for what's supposed to be part of the BEAD program. NTIA has also issued a considerable amount of guidance and it's my understanding they continue to do so.

I think in addition to that, the NTIA has actually provided each state and in California's case, two federal program officers that are supposed to be the bridge between the agency implementing the program in the state and NTIA. And so I think that California should make the most of that opportunity and really sort of stick by what's required, as in the NOFO and what's required in the guidance. And also honestly look at other states. There are other states who are further ahead in some of the processes.

And there's no need to reinvent the wheel here. This program was designed, although it's being implemented at the states, it was designed by a federal agency and that there are certain guidelines by which all states are supposed to follow. So there are states that really have been far ahead on this and are good at this. And so there's learning opportunities there. And I think the state should avail themselves of that but most importantly, not create any additional administrative burdens. I talked about that in my statement.

Or costs, right, interagency coordination, ensuring that permitting is streamlined, all of these things will encourage provider participation and it will make the program work so much better.

To your point about what other states are doing, how are other states that are doing this successfully? How are they rolling this out? Can you expand a little more on that?

California is unique in that it is implementing the program through its federal, through its state regulatory agency, through the CPUC. Most other states have broadband offices which report directly to the governor. And so there's not a rulemaking process that's been needed to go done before they've started toward funds. So some of the states fairly have had state broadband programs and so they had experience at grant making.

But even those that haven't, they stood up a broadband office and they're using that to get ARPA dollars out the door, learning from that to get capital projects money out the door, learning from that to build their BEAD programs.

And that's been more efficient in those instances. My last question, and then I'll turn it back over to the chair. What would you say would be some disincentives to participating in the program and how can we better incentivize participation in the BEAD program.

Some of the things I think I mentioned in my statement, this idea of holistic builds is very important. We absolutely have to prioritize the unserved, but allowing those builds to include potentially some underserved areas as well to use economies of know. I think one of the other Assemblymembers asked about whether asked the CPUC whether they should define the service areas or provide flexibility to the providers. Definitely allow flexibility to the providers.

They're in this business, they understand how you can get the most bang for your buck in some of these projects. And that's critically important to make the dollar stretch as much as possible.

Thank you. I appreciate that.

Do any of our other panelists have any other inputs to those questions?

Yeah, I would love to jump in on this. One of the big things that we are constantly working on is trying to make all of these things accessible to the local officials, the nonprofits, the smaller organizations that aren't necessarily at the state, that have kind of the funding resources, the capacity to actually understand how all of these things fit together.

So really, anything that the assembly can do, that the CPUC can do to make all of these programs more accessible to the folks that don't do this on a daily basis and when we go out and talk to a local official, they have a fire department to run, a police station to run. They don't necessarily understand all of the nuanced intricacies about how broadband deployments work.

And so asking them to all of a sudden pick up a 200 page federal notice of funding opportunity, understand that fully, and then apply for it is something that is actually very difficult. Illinois is a great example. The broadband office there is actually working with many of its nonprofits, its educational institutions, places like the Benton Foundation for Broadband and Society, really, just to put as much information out as they can in an easily understandable way.

So that the folks who are going to end up benefiting the most from these programs are actually able to go out and apply for them or provide input in a way that would most meaningfully make the money go the farthest furtherest.

Great, thank you.

And that's a good point. We gave out 50 million in local agency technical assistance exactly for that purpose, as we knew that some smaller jurisdictions, some of the most unserved or underserved areas needed the most help. So it would be interesting, and maybe this is something for the PUC and we can follow up with afterwards is, and we should probably be tracking is, of the 50 million that we gave out and the ladder funds, how many of those actually end up turning into projects? Right.

That would be very interesting to see at the end of the day, how many end up in CASF projects and FFA projects and B projects. So there is that. Anybody else want to chime in before I think we have probably a number of questions, but if anybody wants to chime in Patrick Gina.

I would just say robust participation should be the priority, trying to make sure that you adopt rules that encourage participation. I think the legislature should monitor and watch the level of participation that you see in the next round of CASF applications and who is participating in those and see the willingness to participate in the first round of the FFA and see if there's any level of drop off in participation.

Because you would assume that the providers and those interested in receiving grants would be consistent throughout that process as you had that discussion about thinking about the programs as a continuum and see if there's any adjustments that need to be made to the criteria after you get that experience.

However, I will note the statements from my colleague earlier about the ability to do that easily by utilizing the state regulator versus an office of broadband that would have a less onerous or inflexible administrative process that might be a consideration.

Thank you. Any other, Assemblymember Bonta, before I go into my question.

I did want to just address the issue of mapping. Mr. Messac in particular. I heard that you talked a little bit about some alternative ways to be able to resolve the issue around whether communities are unserved but potentially due to kind of aging infrastructure issues, so to speak a little bit to the idea of crowdsourcing and where that might fit into being able to get more accurate or a broader data set around accessibility.

Absolutely. Thank you so much for the question. Assembly Member Bonta first, I just want to name that the CPUC should really be commended. When we first saw the FCC map released, it showed universal accessibility to broadband service in Oakland, which almost floored us. And so to see the iterations of the CPUC map, adding additional locations and additional specificity, I think there's several hundred unserved locations now identified in Oakland. It's really encouraging to see that progress happening.

That being said, given the centrality of identifying these locations to receiving funding in communities like Oakland, where we have 36,000 households in East and West Oakland without internet, our community stands that they're ready to be involved in the challenge process. And we are anxiously awaiting clarity on what is the burden of proof that's going to fall on us as a community to prove more locations unserved.

Mobilizing an entire community to demonstrate specifically we're hoping through speed tests, that many folks who are paying for 120 service are not getting it, re getting well below it is an all hands on deck kind of effort that will take months. And the ongoing waiting period is making it really difficult for us to mobilize.

I think highest level, what's most important to us is that the burden of proof does not fall on the un or underserved resident to have to prove on their own behalf through some sort of online portal when they don't have consistent access to online access, that they're underserved. So any sort of process that allows municipalities to be actively involved and that can be implemented at scale is really critical to our city. And I know cities and localities across the great state of California.

I think that's really good and I think Dr. Wood has a bill for that.

Love to hear it.

Do we have any other comments from other panelists?

I would just like to say that when we're looking at the requirements that are coming out of NTIA's guidance for speed tests, they are actually woefully inadequate. They are putting restrictions on speed testing for things like you are allowed to collect between seven and 11:00 P.M.So if you're not getting an adequate speed test on peak times, why does that not count as being unserved if you're at an off peak time, but also receiving a speed test that would show that you're unconnected?

So when we're looking at the almost 30,000 folks in Oakland that don't have a computer, how are they even supposed to begin to do that? To start with, they don't have access to Ookla Speedtests or MLABs data. They really just have potentially a wireless signal. Those things are also, while useful for the FCC's mapping process, not useful for the NTIA challenge process the way that the guidance is currently laid out.

So I think determining what technologies we're using and also what the actual restrictions on data collection are is incredibly important.

Well, and to that point, I think there are cities like Oakland that have great advocates. I think there are probably many cities in the State of California who do not have great advocates, who are not organized. I think you mentioned Chula Vista, Oakland. There are some cities, but I don't know anybody in Oceanside doing it. Right. And the City of Oceanside isn't doing it. And so there are many communities that have underserved or unserved areas who don't have great advocates.

And I think that's what we need to think about too, is what's the capacity in the community to be able to access the different funding if they don't have that local capacity right. So with that, Assemblynember Bonta, did you have more questions? Okay, so one of the questions I wanted to ask, because it's something we've grappled with in the committee is we were talking about the affordability issue. And obviously in know I love what Director Osborne said.

If BEAD without equity is just bad, and that's funny, it's going to be one of my takeaways from today. Hashtag. But when we think about it, we do struggle with affordability, right? If you look at Chua Vista, what you described in the issue with Chula Vista is affordability problem. It's a technology problem. Maybe it's an infrastructure problem too. But I think there's been a lot of work done on the infrastructure side in Chula Vista. And so one of the tools we have is the ACP.

And if the ACP federal funding goes away, what do the panels think, what we should do as California that is within federal guidelines? Go ahead.

You want to go first?

Sure. Well, I first like to say that I believe California is certainly leading the charge on this. With the Lifeline program that you all have already in place, you are certainly taking far more steps to tackle the affordability problem than many other states are. As we're looking at the ACP funding beginning to dwindle, as my colleague mentioned, we're looking at the beginning of 2024, maybe the end of the second quarter if we're lucky. The appropriations for that are certainly a topic for highly contentious topic.

But one of the things that as you all are looking at how the grant program comes together, how the oversight of the CPUC and what they're working on via those programs, how the Department of Technology is working on its digital equity plan all of those are opportunities for more input on what exactly affordability programs need to look like. For some folks in California, $1 is going to be too much.

They just don't have the capacity to be able to afford a broadband service when things like food is on the line. So making sure that we have good robust data sets about exactly what poverty looks like, exactly how those metrics play out in not just the major cities but also in rural areas. I think one of the largest things that we overlook is that adoption is not just an urban problem, it's also a rural problem.

Even if infrastructure is there, there are some folks in rural areas that might not necessarily be able to afford it. So just making sure that we're taking a holistic approach to exactly how affordability is tackled. Whether or not we're trying to put in an increase to the California Lifeline Program or just trying to look at what kinds of secondary programs might be able to be set up. Understanding. It starts with understanding where the problems actually exist.

Thank you for that question. I think I mentioned in my statement know we certainly are working very hard, obviously it remains to be seen, but we are working very hard on Capitol Hill to get either more appropriations or a long term source of funding for ACP. So we're hopeful that that will continue.

And should it continue, I think requiring the ACP for participation in BEAD is a great way to do that or require participants in the state's BEAD program to commit to affordability requirements that are similar to some of those that are already existing. There's also things like the Reasonable Comparability Benchmark, which is something that's used in the context of the Federal Universal Service Fund.

You can look at that, to make sure that rates are within a certain level of reasonable comparability across urban and rural areas, or to require providers within their footprint, whether it's BEAD funded or not, to have the same prices. So those are some other ways to help ensure that prices stay reasonable and could contribute to the affordability problem.

And a few things I would just add. So, federal guidelines empowered the CPUC to set a pricing standard for low cost plans. And I would really encourage the CPUC to work with community advocates to determine what is a reasonable price floor for a low-cost plan in California from the regulatory side of things. But as I also named in my testimony, the greatest driver of affordability is competitive access to open-access infrastructure and municipal engagement.

The CPUC recognizes that municipalities operate without the same profit motives as industry, and so municipalities should be actively engaged in this process. Just two specific examples in Oakland, so we are awaiting more clarity on BEAD so that we can connect anchor institutions to bring infrastructure deep into our least connected communities. We already know from a RFI that we released that 20 different innovative providers are interested in serving Oakland if only they can get access to affordable backhaul.

One of those providers said that they tried to launch a community owned network in Oakland, but found that the cost of backhaul was 10 times as expensive as their mesh network that was launched in a more competitive market. And the second, actually listed under the anchor institutions with BEAD are HUD sponsored housing. So we want to bring free Wi-Fi to our public housing because for many folks in public housing, the only affordable option is free.

And BEAD allows us to fund at least five years of service alongside. So getting the infrastructure implemented and five years of service, we think, helps build a bridge to a brighter broadband future in Oakland.

Madam Chair, our Members have had a history of providing low cost programs, I think even before the Pandemic, income eligibility requirements and the like, but have had low-income cost programs availability. We've been first participants in with the ACP and other benefit programs that we're trying to provide lower-cost, nearly free services during the Pandemic and beyond.

I think ensuring that the PUC is having a conversation with industry about the structures of those low-income cost programs and why there is such robust participation in the ACP and why it works, I think is essential. And looking to those experiences for their guidance would be my suggestion for how California should move forward.

Thank you. And the PUC talked about how there's a jigsaw puzzle of programs. Could you each give your perspective on how you think the programs are working together or what could be improved in the clarity between the programs?

I'll go first. I'll take it because I've gone last. The programs are mismatched, and I think the back and forth between the members of this committee and the PUC drew that fact out. When you look at the CASF IGA program, the statutory requirement or goal of that program is clear. It's 98% by consortium region by 2032.

I think when you look at the implementation and the enactment of SB 156, it's also clear that the goal of that program is not necessarily is about connecting unserved and underserved households, but it's also about how do you encourage, recruit incentivize new entrants into the marketplace. Much has been spoken about municipalities and nonprofit participation in becoming internet service providers. I think that experiment has yet to prove we don't have results. An application window has yet to be open.

I think if you're the PUC, you should be confident that that experiment may prove successful by the number and the oversubscription of local assistance grants. But I think the Chairwoman's remarks about seeing how many of those grants turn into actual applications is something that the legislature should be mindful of. The Chairwoman also noted the Middle Mile and the historic investment in the Middle Mile. However, the Middle Mile is not necessarily connected to a last mile project that will connect unserved or underserved homes.

So when you look at the implementation or the enactment of SB 156, the connection of unserved and underserved households is a secondary priority to the encouragement of new entrants into the marketplace. I think the concern that our organization has with the BEAD funding is that we return to a priority of connecting unserved first. Underserved, we think should be second only because from our standpoint, when we think about equity and those individuals that are left out, that is defined as unserved.

And making sure that those individuals in those households that have been left out or are underserved should be our paramount priority and that the BEAD program should be structured in a way that serves that paramount priority.

And I'll certainly say that as we're looking at kind of the spectrum of programs that exists, it is certainly all-encompassing. The Middle Mile program certainly enables all of the other last mile programs to connect the communities that are at the end of those Middle Mile nodes.

But when we're looking at kind of how to do all of these things, what kind of stands out to me the most is how do we ensure that we are building towards the actual goals that communities have set in mind? Many communities deal with how do I allow my residents to age in place? How do I bring folks who want to work remotely into my community? How do I allow telehealth to take over rather than dealing in, well, 15% of my population is unconnected.

They look at the very real world impacts that disconnectedness has. And ensuring that we are looking at all of these programs through a lens of this is how we tackle each of these very real world programs or problems, excuse me, is exactly how we get the kind of collaboration and coherency cogency excuse me that we need to allow all of these programs to actually work to their fullest extent possible.

I would also just add that I think it would be worthwhile, as California moves through the process of making these grants, particularly with the FFA that there should be a unified and sort of coordinated effort amongst agencies and whoever's giving out grants to really get a concept of where have grants been given? So that you know precisely where money's been spent so that you don't resend it somewhere else. I mean, these things are staggered, right? FFA is going to go out the door.

BEAD program allocations are going to come out this year. The funding will probably actually roll in another year or two. So as this happens, there needs to be a careful process of making sure that the state knows where the funds are going and that that process isn't duplicated.

Before. That reminds me of the point which was a question that Assemblywoman Bonta asked, which is about matching funds and the use of existing state grants in order to be utilized for BEAD matching fund requirements. I think that's a key policy decision to make. At the end of the day, the pot of resources is only X big.

And the need, as has been articulated here, especially when you including in the fire hardening requirements of $8 billion, which is, again, based on a lower number of unserved households than the number that the PUC's updated maps are now reporting. Means that for every dollar you use as matching funds for beads, that's a dollar you can't spend connecting an unserved. Or you reduce the number of unserved and underserved households that you can serve in total.

That's why I think the comments from the Chair is really important about the role of the legislature and thinking about the program, the three programs and the state investment at a macro level. I think the macro level must be informed by the communities, by the grassroots. What is it that you're looking to accomplish?

But I think there are some macro level decisions that need to be made by policymakers that represent those communities so that you're able to bring the voices of your communities into that macro decision making.

I'm going to leave putting together the jigsaw of this myriad of policies to the brilliant folks at our state agencies and to the ever so competent oversight of committees like this. What I think I can uplift from a community perspective is we see this as a beautiful problem to have that for the first time, probably ever, the nation has really unified around one of our more intractable structural inequities of bridging the digital divide. For too long, our communities have been asked to solve these problems independently.

So to see this groundswell of both support and funding coming to communities like Oakland is such a welcome sight. I think at the end of the day, what we care about most is that there's a really clear, unifying principle that public dollars serve public benefit. We know which communities have received over the past several decades a lot of private investment. And I can tell you that those communities are not East and West Oakland.

And at the end of this FFA, Last Mile, Middle Mile, I think the question that we're going to ask ourselves is where did all this money go? Did it go to the least connected highest poverty communities or did it go to the communities that have been invested in for decades? And I have the utmost confidence in our friends at the CPUC and CDT and on this committee that we're going to continue to work to direct these funds to where they're needed most.

And this is maybe, well, I guess anybody can answer it, but if I were a community group in Oakland, I would look at this. Let's take a city that doesn't have a lot of capacity. I'd look at this grant application and all these different programs and I'd really struggle. And especially if I didn't get a ladder grant, I don't even know how I would navigate that. Do you think having the multiple programs is helpful because it is like a problem of plenty?

Or do you think it's more confusing for applicants because there are different requirements, different goals? What is your sense from the community that you're hearing.

Briefly? I think there's just still a lot of excitement but some anxiety, just wanting to get more transparency and clarity on what is going to be the timeline for these upcoming grant windows, what are going to be the requirements, and hopefully there's as much overlap as possible.

So for instance, if we apply for an FFA Last Mile grant that we don't receive that we can repurpose that application for BEAD, I know that there's not going to be perfect alignment, but the more alignment possible, many cities don't have a grant writing department, so the more streamlined the process can be. I'm sure that'd be very welcome from our municipal friends across the state.

And thank you for the question. This is one of the things that not just communities in California are grappling with, but communities nationwide with the incredible amount of funding that is just available now. And really what it comes down to is how accessible are these grant programs to a person who does not do grant writing? Like you said, these cities do not grapple with grant reporting, grant writing generally, the grant process in general.

So how are we letting them know, here is what we need from you, here is what your responsibilities under these grants will be, here is what the reporting requirements would look like and here is what's going to happen after that.

So that way we can give them the kind of clearest, most accessible picture to then allow them to say this will meet my needs or this program over here will help if I combine it with this program over there so that way they can apply for the things that they need the most.

Yeah, there's no guarantee if they apply for one over here that they'll actually get the one over there either.

Exactly.

No, I was going to say if we were going around the horn, I'm not going to propose to speak as a community organization. I will state, though, that our organization advocated essentially for the CASF rules to be applied to the FFA program for there to be that kind of consistency in thinking about what the objective should have been.

Okay. Unless there are other questions from our Committeemembers, I want to thank our panelists for your participation. Very insightful. And now we're going to turn to public comment in the room. Members of the public who wish to provide public comment may now approach the mic. Members of the public, I ask you keep your comments to two minutes and please begin with your name and affiliation, if any.

Otherwise it's a traffic jam.

Thank you, Madam Chair and Members, Jonathan Aaron Bell on behalf of CTIA, the trade association for the wireless industry. We've heard a lot of the conversation. There were some concerns, questions, comments on will we be able to do this fast enough? Will we have enough money? There was a comment about using all the tools in the toolbox. We agree. We believe that it should be in all of the above strategy that is crucial. Wireless should be included.

Neglecting this approach is like trying to put together a puzzle without utilizing all the pieces. Doesn't make much sense. It's going to end up resulting in us failing to achieve the comprehensive broadband coverage that we are hoping for. The BEAD program is pretty clear on its objective. It is connecting all Americans to high-speed Internet with the emphasis on those unserved.

There's going to be a lot of areas that wireless may not make sense, but there's also going to be a lot of areas where wireless may be the only option due to timing, due to the cost. A technology neutral approach promotes competition and reduces the risk of delaying broadband deployment to the areas that need it most. Wireless has to be part of the solution for California to reach its goals. Thank you.

Thank you again to all the members who participated in the hearing. I appreciate it. I know there are many other places you could have been and I really appreciate you joining us today. I also want to thank the representatives from the PUC Executive Director Rachel Peterson and Director Rob Osborne. And I'd also like to thank all of our additional witnesses who brought really great insight into, I think, this topic of digital equity and BEAD funding.

As I mentioned at the top of the hearing, this committee will continue to exercise our oversight duties moving. Forward because it's imperative we get this program right. I think the members of this committee have made our perspectives very clear on how to proceed, and I expect the PUC will take all of that into consideration. And with that, this meeting is adjourned.