Assembly Standing Committee on Communications and Conveyance

And thank you for joining us at the Committee of Communications and Conveyances first hearing of the year. Welcome. My name is Tasha Boerner Horvath, and I serve as the Chair of this Committee. Joining me today on the dais or in the room is Vice Chair Patterson and my colleague Luz Rivas. And we have other colleagues from the Committee joining us throughout the hearing. I also have with us Emilio Perez as Chief Consultant for Communications and Conveyance Committee.

As we begin our first hearing, I'd like to thank Speaker Anthony Rendon for appointing me to this important committee, especially at this pivotal time in addressing the digital divide. 30 years ago, I remember sitting with my dad, who was a computer science professor, and he was working on this area of education, equity and technology. 30 years ago, we were at the dinner table talking about the digital divide, and it's really unfortunate that 30 years later we're still having that conversation.

There continues to be a great focus on closing the digital divide and ensuring digital equity, both from this Legislature and the Newman Administration. I'd like to thank my colleagues for your continued support on these issues. With that, I'd like to turn it over to Vice Chair for any introductory comments, followed by any introductory comments by members of the Committee.

Just echoing the Chair here. I've been here for 10 years, and we're still talking about digital divide. I'm going to have some direct questions that go to the heart of all of this, to the PUC, and also let's get this done, because I think if we don't get it done on time, a lot of that money goes away and a lot of the urban and rural tensions come back. So you'll hear from me later.

Thank you. Assemblymember Rivas, would you like to make any comments?

Thank you, Chair Boerner Horvath and Vice Chair Patterson. I'm new to this Committee, excited to learn more about issues related to digital equity, digital divide, and I look forward to serving under your leadership.

Thank you, Members, for your introductory comments. I'd like to refocus our attention on the primary reason we have convened this hearing, which is legislative oversight. As we all know, in 2021, this Legislature, in partnership with the Newsom Administration, made history. A historic $6 billion investment in broadband infrastructure programs through Senate Bill 156. 2 billion was allocated to the California Public Utilities Commission for last mile broadband program.

A significant portion of the money was federal funding with strict timelines and guidelines on how it was to be spent. As the CPUC moves ahead in implementing all the programs that were funded in that legislation, I am committed to having this Committee play a strong oversight role. Today's hearing will focus specifically on the federal funding account, the FFA of the California Advanced Services Fund.

During today's hearing, we'll have an opportunity to hear from the CPUC and to provide and have them provide an update on implementation and answer any questions from our members. We'll also hear from stakeholders who have been involved with this implementation. I imagine a lot of the testimony and questions will be about the recently released priority area maps. There's been a strong reaction from the public and members of this Committee, and there are still unanswered questions about the next steps towards fully opening a funding round.

But before we begin, we have a little bit of housekeeping. If any members of the public in the room would like to comment, I will invite you to approach the microphone at the appropriate time. I'd like to ask that the public not touch the microphone. You can exit the hearing room once you are done commenting or return to your seat.

Thank you for your cooperation as we implement methods to continue to serve the people of California while also being mindful and respectful of public health concerns we all should face. Personally, I don't want to get sick, so thanks. Now let's cover the ground rules for appropriate comment. I don't think we're going to all get riled up today, but you never know. 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 this 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 of matters not related to the subject of this hearing, and any other disruptive acts. To address the disruptive conduct, I will take the following steps.

If any 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. I will also document on record the individual involved and the nature of the disruptive conduct. I may temporarily recess the hearing, and if the conduct does not stop, I will request the assistance of the sergeants in escorting the individual from the Capitol building. So with that, we'll now begin the oversight portion of the hearing.

For panel one, we have representatives from the California Public Utilities Commission. Present here today are Alice Reynolds, President of the CPUC, and Rob Osborn, Director of the Communications division of the CPUC. Members, I'll ask you to hold your substantive questions until the end of your presentations. So I'd like to invite up President Reynolds and Director Osborn at this time. Thank you very much, and you may begin.

Thank you. Good morning, Chair Boerner Horvath and Committee Members. Thank you very much for inviting me here today to provide an update on the CPUC's implementation of the California Advanced Services Fund federal funding account. I'm joined by Robert Osborn, the Director of CPUC's Communications division, who will be describing our implementation efforts in more detail.

As you noted, Madam Chair, in 2021, the Legislature and the Governor committed to a historic $6 billion investment in broadband for all, including funding for the deployment of infrastructure to address accessibility gaps through the California Advanced Services Fund federal funding sub account. This investment is the single largest public investment in broadband infrastructure in the state's history.

Specific to the CPUC, the Legislature allocated $2 billion toward last-mile broadband infrastructure, the federal funding account that we are here to talk about today, coupled with an additional $2 billion for other programs, including a new Loan Loss Reserve Fund, an extension of the existing traditional California Advanced Services Fund for broadband adoption infrastructure, and digital equity. The intent of these programs is clear. For too long, many communities have had no or inadequate broadband service, and they will continue to be overlooked if left solely to market forces without state support.

You mentioned, Madam Chair, the long term nature of this problem. We recognize that attempts to bridge the digital divide have been undertaken in the past, but we always seem to be playing catch up. Some communities have historically been left out of broadband infrastructure projects, and usually these communities are low income, disadvantaged communities or rural areas that are less profitable to serve.

Although the CPUC's programs, along with the efforts of our sister agency, the California Department of Technology, will go a long way in addressing the digital divide, we also recognize that these programs on their own won't be enough to fully address the significant broadband access needs throughout the state, which makes the careful management of available funds even more critical.

With the Legislature's support and direction in SB 156, the CPUC is targeting this new generational investment towards households that are not served at minimum speeds and charting a new path for the state's broadband programs. We are doing that through several efforts. First, we're collecting and using more accurate and granular information. Second, we're incorporating lessons learned to avoid the pitfalls of past broadband programs. Third, we're increasing staff capacity, including broadband caseworkers, to do direct outreach to communities.

Fourth, we're deploying technical assistance grants to help communities design networks that they know they need based on unique circumstances of each local area. And fifth, we're developing a modern online management platform to receive and evaluate broadband project applications. These preparations are vital to ensuring the effective and efficient distribution of public funds that will be used to fund up to 100% of broadband infrastructure costs to connect those Californians most in need of broadband access.

You'll be hearing from Mr. Osborn regarding specific steps the CPUC has taken to stand up the Federal Funding Account Grant program. But I did want to address one of the elements of the program, and that's the element that you mentioned previously, Madam Chair. I want to recognize that CPUC has recently released a map showing what is known as priority areas, and I'd like to start by clarifying a few points that I believe have caused recent confusion.

First, the map that identifies priority areas is a draft that is subject to further changes, which I will address in more detail in a moment. But it's also important to emphasize upfront that this is not a final map. Second, the areas marked on the map are not the only areas eligible for funding in the CPUC's program.

On this point, I recognize that the term priority areas may be a bit of a misnomer, and these are not the only areas that will be funded, and they're not even the areas that will be necessarily funded first. Instead, what priority areas means is that once the process to identify these areas is complete, they will determine whether an applicant receives points in one of the 10 scoring categories in the grant application process. Specifically, they will be eligible to receive 20 additional points.

And third, this iteration of the map does not include the second element of this funding category under the CPUC's program rules, which is extremely important. The second element is that projects proposing to serve disadvantaged communities are also eligible for the points in this category, and I want to be clear that the current version of the priority areas, the eligibility for this 20 points out of 130, needs work, and we welcome input to inform our further progress process.

Each priority area was designed to model a reasonably engineered broadband network, and it also was designed to estimate construction costs and ensure sustainable revenue and operating costs for a standalone project. As you will hear from Director Osborn, we developed and released an initial draft of the map and are soliciting public feedback, recognizing that the map is far from complete. In the interest of transparency, we thought it would be best to invite public feedback on an initial iteration with initial data.

So far, we've received helpful feedback from your constituents and many stakeholder groups that have identified data discrepancies, and we recognize that the rollout of the map omits full incorporation and clear incorporation of the critical component I mentioned previously. The element in our own guidelines that incorporates disadvantaged communities into the priority areas application scoring category.

With respect to accuracy of unserved locations, while the priority areas map was developed with the best available data at the time of its initial development, we expect that many of the issues to be resolved with updated data will be resolved when we add data collected in late 2022 pursuant to a CPUC data request, Assembly Bill 2752 and ultimately CPUC's issuance of administrative subpoenas to Internet service providers. CPUC staff are currently working to process and validate the data received, and it will be reflected on the next version of the priority area map.

Moving forward, the CPUC will correct the issues that have been identified to date. We'll integrate the broadband data received in the late 2022 data requests, and we'll integrate broadband equity information into the application process for the priority area scoring category. Finally, I'd like to clarify the scope of the federal funding account. This grant fund was created by the Legislature to fund infrastructure in areas where sufficient infrastructure currently does not exist.

It was intentionally paired with funding for a state-owned middle-mile network implemented by the California Department of Technology. Together, these programs give California the opportunity to build a broadband infrastructure of tomorrow to serve communities that currently have no ability to access Internet services at speeds of 253 or above. What this particular fund does not do is assist with communities that are struggling with low adoption rates. Where infrastructure exists but individuals are not able to access services, primarily due to cost barriers.

People in those areas are also disconnected, and addressing that problem is a critical component of the state's broadband for all efforts. There's a suite of state and federal programs aimed at those areas.

These broadband affordability programs include the Federal Affordable Connectivity Program, the California Lifeline Program, and various grant programs, including the Broadband Adoption Account, Broadband Public Housing Account, the Broadband Loan Loss Reserve Fund, and importantly, we also expect the Department of Technology's middle mile project will be transformational in reducing the cost of service in many areas of the state.

In closing, I would like to thank you, Chair Boerner Horvath, for the opportunity to be here today, and I will now turn to Communications Division Director Robert Osborn to provide more detail on the implementation of the CPUC's federal funding account.

Thank you. Good morning, Chair, Madame Chair, and Vice Chair Patterson and Committee Members. My name is Robert Osborn. I'm Director of the Communications Division at the California Public Utilities Commission. Thank you for allowing me to provide an update on the various last mile broadband programs that were enacted with Senate Bill 156. You have with you, I believe, some slides.

So I'm going to go to slide two, which says 'Last-Mile Broadband Initiative' at the top. The CPUC is actively implementing several new broadband funding grant funding programs as well as updating existing programs pursuant to Senate Bill SB 156, Assembly Bill 14, and Senate Bill 4. This includes Local Agency Technical Assistance Grant program. This program assists local governments and tribes to prepare for broadband infrastructure investment.

Since opening applications last August, the CPUC has received 116 applications worth over $52 million and approved 82 applications worth over $36 million. The fund has $50 million allocated to it, and due to its immense popularity, we are working with the Administration to see how to augment that allocation to support all counties. To date, 43 counties have applied for grants. The federal funding account, which funds last-mile infrastructure broadband projects.

The CPUC issued a decision on program rules in April of last year and has been developing program materials and systems to support opening up applications in June. The Loan Loss Reserve program, which enables local governments and nonprofits to secure financing for broadband infrastructure. The CPUC is targeting a proposed decision in the first half of 2023. Recent actions on the Loan Loss Reserve program include comments and replies on the Loan Loss Reserve proposal in October of last year.

CPUC and the California Infrastructure and Economic Development bank signed an interagency agreement in November last year to work together to develop the Loan Loss Reserve Fund. The CPUC held a public participation workshop in November to provide an opportunity for community organizations to provide feedback on the staff proposal. Finally, the California Advanced Services Fund, which includes Broadband Public Housing Account, Broadband Adoption Account, Rural and Urban Regional Broadband Consortium Account, Broadband Infrastructure Grant Account Line Extension Program, and tribal technical assistance.

In 2022, the CPUC issued two CASF decisions. One expands the eligibility as required under Senate Bill 156 for Broadband Public Housing Account Grant and modifies the Broadband Adoption Account and Broadband Urban and Rural Consortia Account Grants Program. It also adopted the CASF program budget and sub-account budget for fiscal year 22-23. The second decision modifies the Broadband Infrastructure Grant Account Program rules to implement the recent legislation, which Senate Bill 4 and Assembly Bill 41, which changed the project eligibility and performance criteria.

Finally, in July 2022, the CPUC opened grant applications for the Broadband Public Housing Account and received 19 applications for a total of 1.4 million. Broadband Adoption Account, we received 99 applications requesting a total of 28.5 million. Broadband Urban and Rural Consortium Account, we received 15 applications and have made awards. The CPUC is also supporting the California Department of Technology with the Middle-Mile Broadband Initiative and providing publicly vetted and comprehensive data analysis and maps to assist with the middle-mile deployment.

These efforts help guide the deployment of the state owned open access middle-mile network that will serve as the backbone for the statewide infrastructure to enable last-mile broadband connections. In addition, the CPUC was awarded 4.9 million in federal funding from the Infrastructure Investment and Jobs Act of 2021 through the National Telecommunications and Information Administration Broadband Equity Access and Deployment, otherwise known as BEAD program, to do planning activities related to the BEAD Last-Mile Sub-Grantee Program, which will be administered by the CPUC.

The CPUC is coordinating with the Department of Technology and Planning outreach activities in aligning digital equity planning with the BEAD. As the Department of Technology received the Digital Equity Planning Grant from the NTIA and as the designated state entity for digital equity. I'll speak more about this later in my presentation, so we'll move on to the next slide. So this slide shows the implementation timeline for the Federal Funding Account program.

The area on the left summarizes some of the work that was done prior to the first local agency technical assistance grants made in October, and this includes, as I mentioned earlier, adopting the Federal Funding Account rules in April, hiring 25 staff, developing the grant management platform, doing the broadband provider data request, opening the first ladder grant, the local agency technical assistance grant window, which is on a rolling basis.

We're accepting applications every month, the broadband data subpoena and receiving the data in December, and then continued coordination with the Middle-Mile Broadband initiative. So getting to the timeline, working from left to right, in October we made the first local agency technical assistance awards. In November we began briefings on the priority areas, and in December we did a soft launch to work out some of the major technical bugs, such as layer display, data labeling and web hosting.

We've begun internal training on our caseworker staff, and in May we plan to launch the grants management platform and in June begin accepting applications for the Federal Funding Account. We'll move on to slide four.

So this slide is an illustration of where we are in the development process of the tools that will make up the support structure for the FFA federal funding account applicants. Map development on the left produced version one of the priority maps, which is what we have available today. We've published that map and now we're in the feedback stage, which is highlighted in the square.

We'll be incorporating the feedback and updating the underlying data and the priority area model to release version two, which will then be used as the basis for the applications. Next slide, please. Slide five. So this is an example of where priority areas appear on the current map today, and where we find clusters of unserved locations that are not included in priority areas.

These are areas of great need, as evidenced by incorporating metrics for disadvantaged communities, such as those in the CPUC's Environmental Social Justice Action Plan and in the Socioeconomic Vulnerability Index, otherwise known as the SVI. The data sets used to model the priority areas were what we had the best granular data at the time. The CPUC will be updating the underlying data and the most recent data collection we received in December, and updating the priority areas based on the feedback that we're receiving right now.

Move on to the next slide. Slide six. So, with regard to concerns about the funding for the federal funding account, this is an outline of the plan for applications, reviewing applications, and awarding applications. So application round one, as I mentioned earlier, we're planning to begin accepting applications in June of this year. That review process will go through August. We plan to make the first round one awards in January of 2024. Project construction would then go from February 2024 up through December 2026.

The next row down is application round two. Expect to have the window open for round two in January of 2024, reviewing those applications between March and November, and then making the second round awards by the end of November, or, sorry, the end of December of 2024, with project construction going for about 24 months. Third, if necessary, we can open a third application window, but that is something that we'll still need to look at based on how many applications we've received to date.

Let's move on to the next slide, please. And this is the last slide. So this is regarding the Broadband Equity Access and Deployment Program, otherwise known as the BEAD. This is a federal grant program that aims to get all Americans online by funding partnerships between states or territories, communities and stakeholders to build infrastructure where no Internet access exists at 25-3 and underserved locations, have access that's below 100 megabits per second down and 20 megabits per second up.

The initial planning funds letter of intent, we submitted that to the NTI on July 1 and that designated the CPUC as the administering entity. The initial planning funds application we submitted on August twelveth. We did our first kickoff meeting in cooperation with the Department of Technology in October of last year. And then the FCC opened its first challenge round for the fabric. So there's two parts of the FCC map. There's something called the fabric, which is a list of all the locations across the state.

And then there's the availability challenge, which is the presence of broadband. So the CPC went through the fabric that the FCC has as the basis for their map, and we submitted a fabric challenge. We basically identified 42,000 locations that were not correctly labeled in the FCC's fabric. Of that, the FCC determined about 16,000 were missing from the California map. So those have been added in version two of the FCC's map. So that's the result of the fabric challenge.

In the end of November, we had planned to get the initial planning funds. In fact, we got the award notification for initial planning funds, as I mentioned earlier, 4.9 million in December, on December 7. Following that, the FCC published their second version of the fabric, which I mentioned earlier with the broadband data added to it. So that broadband data was the basis for the availability challenge. This is the second challenge that the FCC opened up.

The availability challenge period was from November 18 through January 13 of this year. So the FCC availability data, we found some major problems with that, and so we've gone through as much as we could in the time given. Keep in mind, it was from November 18 all the way through January 13. There's over 10 million locations in California. There's 160 providers that we collect data for.

So we really had to do triage to try and do the best we could with the time given to challenge the data. We're in the process of talking with the FCC and NTI. We did file an availability challenge, and we're working with them to try and improve the map so that we have the largest amount of BEAD allocation possible for California. Following on the timeline additional things that are coming up. So we have a BEAD rule-making that we're aiming for the end of February voting meeting.

So that will go into creating the program rules for the BEAD program for the sub grantee program. The FCC will be publishing their final version of the map in mid-May of this year, and that will be the basis for the NTI's allocation, which we're expecting before the end of June. The five year action plan is something that we will be funding through the initial planning funds that I mentioned earlier, and that's due before the end of August. And that concludes my presentation. Thank you for allowing me to present to you today.

Thank you for your remarks, President Reynolds. I really appreciate you opening up this first part of the oversight hearing with saying how the feedback loop will happen, acknowledging that there is missing information, acknowledging how we're going to go forward. I want to also acknowledge that we have Assembly Member Papan, Bonta, and Hoover who have joined us today. Before I open it up to other Members for questions, I have a few remarks and questions. I'm very concerned. If we go back one slide, I think it's slide six.

Slide six. I'm concerned about the timelines and the spending. My understanding is that the money has to be spent by the end of 2026 for the 2 billion FFA funding. Is that correct?

The federal rules say liquidate by the end of 2026, which is essentially spent, yes.

So when I look at your plan, round one awards, you're looking at 1 billion in round one, 1 billion in round two. You're giving basically a year for the round two funding to be spent. That's not to be allocated, that's to be spent. That's a lot of money and a lot of time and a lot of permitting that still needs to go on to be spent. And there's a fundamental question. I think many of my colleagues would agree that it's very concerning that because we're spending all this time on the front end that that money is not getting out, there's a real risk here that $1 billion will not be spent and have to be returned to the Federal Government.

And I think we need to all be very cognizant of every single moment going forward, of every single step that is not necessary is a step that could be returning billions of dollars to the Federal Government instead of investing in the people and families of California. I was concerned about that before this hearing, and I see this timeline, and we will provide a link to this on our Committee website for those who are watching us on TV.

But there's a huge concern that I have around that, and when I look at that, and I'm sure my colleagues will have questions around the mapping process, but every time we have and spend fixing mistakes, it's time that we're not going to be building infrastructure. These dollars are infrastructure dollars. And so we're going to need to figure out.

And if you said you're open for feedback, that would be my key feedback area is please stop doing things that we don't need to do, because I would be very disappointed if we spent or we send back $1 billion to the Federal Government. And your risk is very high right now for that. And I'm also concerned about the priority map areas moving forward with any changes to the map. And the metrics risk further institutionalization of flawed metrics. And we've seen this time and time again.

My colleague Luz Rivas has been trying to fix CalEnviroScreen since I think she got in the Legislature. Once we institutionalize flawed metrics, they're nearly impossible to fix. And so I appreciate that you showed us the feedback loop and you want to do this. However, my dad used to have this. He was a behavioral psychologist and he used to have this test. He said it's the inner ocular eye trauma test. If it hits you smack between the eyes, you know you've got it.

And when you look at the priority map areas, there's nothing around equity in them. And you use the Internet ocular eye trauma test. And that's what I think has caused so much concern, is because you look at it and they're clearly not areas where we have underserved population or disadvantaged people. Like I look at the map that I was provided for my district. That's absolutely not the places where we need to be helping people.

And so I have some huge concerns around those two things. And the problem is the mapping process that you have instituted is delaying the funding getting out, and it's flawed. And so I appreciate that you have a feedback mechanism to try to fix it. But every single day you spend fixing it and delaying a date by which that funding gets out is a risk to the people of California. And I don't think that's your goal, and that's certainly not my goal.

And lastly, I continue to be disappointed that the CPC will not be administering the FFA on a technology neutral basis. When you look at per dollar funding for different technologies, there are places where if we were more technology neutral, we'd be deploying faster and getting more access to Californians. And I have to say, I think when we had our conversation, President Reynolds, on Friday, I was very clear about that there's more technologies out there than we're considering in the FFA.

Wireless technologies are the quickest to deploy. And to the extent that some can meet the performance metrics, they should be categorically allowed. So with that, I do have a question. President Reynolds, you did say in your comments, and I want to see if I understood that correctly. You said that you'll add equity in the priority areas going forward in the next iteration of the map, should you continue to move forward with these maps. Is that correct? Did I understand that correctly?

Yes, you did. We have the socioeconomic vulnerability index on the maps, but it's a separate layer. And so what we'll be working on is that tie between the priority areas that are marked and the socioeconomic data. So the identity of disadvantaged communities to incorporate those two things.

And if they don't overlap, because in my district, they don't overlap?

We will also, adding in the other layer, which is the unserved areas. And you may have noticed there are smaller dots on the map with unserved areas. So those will also be brought in. Everything will be brought in together.

And I can't speak to how staff will actually make this happen, what the final product, but the concept is that we'll be able to look at the unserved areas, vulnerability index, and priority areas as all fitting in that 20 point category so that we will be able to address more of those unserved areas that aren't marked in priority areas. You're correct. And your district is a good example of where it doesn't come together to match in the priority areas.

Can I ask how you define equity and how you intend--you described how you intend to do that. Can you just define equity first? Because I think we spend a lot of time talking about what equity means, and I think that's an important distinction for not only our stakeholders, but for Members here.

So maybe I'll turn to Director Osborn to talk about what goes into the socioeconomic index. If you notice the unserved areas, I think in distinction from the priority areas, if you look at all of the unserved areas, that better captures some of our low income communities, communities that are ranked high on the CalEnviroScreen tool. But let me turn to Director Osborn to talk about the socioeconomic index.

Yeah. So we're looking at demographic data that is looking at incomes, looking at disparities, and getting back to the Environmental Social Justice Action Plan. We're also looking at communities that are affected by pollution. That's something we've been in discussion with. Some of the stakeholder organizations we've gotten feedback from is looking at the most impacted communities in California and how to get broadband to them.

Okay. Thank you. Yeah. I'll turn over to my Vice Chair and then Ms. Rivas or then Assembly Member Rivas, and then Assembly Member Bonta.

Thank you, Madam Chair. I appreciate it. I want to align my questions and remarks with the Chair. I appreciate it. Did you read my notes? I'm just going to get directly into three areas. The program currently has a requirement to divide funding equally between projects in urban and rural counties, but it does not apply if that money is not allocated by June 30, 2023.

My concern is that money not allocated by June 30, 2023 is no longer bound by the urban rural split and can be spent anywhere in the state. So question number one, do you anticipate the money will be allocated by June 30, 2023?

No, but we do intend to carry forward that requirement of the urban rural split.

That was my final question. Will you commit on the record to maintain the 50/50 split between urban and rural counties even after the June 30 deadline?

Yes, I believe that's already been done in our program rules.

Touching on the Chair's concern about technology neutral. Obviously, the program excludes applications from wireless broadband providers even if they can meet the required speeds. It looks like the PUC's analysis for this program estimate would be 8.5 billion to reach all of the priority areas with a wired connection. But that's despite the fact that there's only $2 billion in the program. Doesn't it make sense to at least consider applications from wireless providers to serve these households if more households could be served at lower cost?

So this is a question that we have thought about a lot and talked to providers and stakeholders. It's a very good question, and we're thinking about, and the way that our decision came down on this question is that we have other programs that are available for fixed wireless providers. You're right, those projects can generally be implemented more quickly, and we are getting money out. We have open application processes on an ongoing basis that those projects would be eligible for.

So I agree in certain areas that the fixed wireless is a good solution, and we do have money available for those projects, and we want to move on those concurrently with the development of the federal funding account, which is consistent with federal guidelines which emphasize the places where wireline connection can be built and is a good solution. So it's kind of a mix of both. For instance, we have a public housing account where fixed wireless can be a good solution. We have other areas where fixed wireless projects can be supported and funded, including the infrastructure for those fixed wireless projects.

Go ahead. I'd like to follow up. Just reapportionment placed me in Assembly District Eight. If you take a look at that district, it is huge. It goes across the San Joaquin River, Madera County, all the way up to Sonora, goes across the Sierra Nevadas to the eastern side, down the 395 corridor, takes in Fresno County. But the fact of the matter remains that if we're going to actualize this, you're going to have to use this wireless technology. You don't have enough money to do it hardwired.

That's plain and simple. But I think you may hear from others here with respect to the access to what you have said are these other funds may have some comment about how realistic that might be. So I just want to echo, if we can reach those speeds and we can do it at cost, well below that will provide the service. But if you have limited money and you can do the same kind of thing with other technology, you can actually cover more people.

Isn't that the goal? And to excise out of this plan that technology, I think, is a mistake. And I join the Chair in saying please reconsider that because there are lots of providers that are ready to go to work on this. And again, I focus on large districts like mine that have mountain folks that don't have connection, that have valley folks that don't have connection, school districts that don't. And agriculture. Agriculture is using technology like you wouldn't believe.

Well, it's not cost effective out in West Fresno to run without the choice of being able to do these wireless connections. They can meet the speeds and they can do it affordably, and they should be a part of the overall mix, particularly if it presses forward the ultimate goal of getting more people at less cost. I'm done then. Do you think that you can meet the deadline of December 31, 2026 to spend the $1 billion in federal money?

And this is in keeping with some of the other comments. How can we rely on the clarity of the PUC priority area maps regarding unserved areas, will be served, when you don't know ultimately where the Middle Mile will be constructed? Can you meet this December 30, 2026 deadline? And what happens if the delay in making these decisions results in the money having been allocated, not fully spent? The question is, if that takes place, is it possible to seek an extension or not?

So starting with the first part that we do believe that we will meet the deadlines. We have the schedule to meet the deadlines. Part of the reason we're doing the work up front is to help with the application process. We've issued planning grants in all of the counties of the state, and so there's a lot of work being undertaken to get applications in order to process and be able to effectively build projects with the funding. With respect to the extension, Director Osborn, do you want to talk a little bit about what options we have?

Yeah. So the funding is not 100% federal funding at this point. There's about 540,000,000 that's capital projects fund, the rest General Fund. So I think with regard to the ability to extend the deadline, some of that is under our control within the state.

Again, I echo the concerns here with respect to the map. I mean, you got the map sticks in the way of getting out and getting into the field and getting constructed. All right, so you got a map problem, you got some funding issues, and you've got some real suspicion about whether or not you can actually do what you're telling us you can do.

So please understand that there is a certain degree of skepticism here that we're loading up, as the Chair said, on the front end, to do stuff that is holding up, making the timeline work, getting out into the field, and utilizing technology that can, in fact, help us, like the wireless. So again, I'm finished. This is important to me because of the district in Central California. I have a lot of geography with limited population, but then I got a big city like Fresno.

So you got to get the map straight and get the money out, all right? Or you're going to be back in front of us and we're going to be talking about this again, pure and simple.

I just want to point out the funding amount discrepancies for fixed wireless. Yes, there's amounts available. I believe it's 150,000,000, of which only 25 million has been allocated for fixed wireless versus 2 billion. It's a lot of zeros difference, and I don't think when we look at rural provision of broadband, if they meet the speed requirement, it's an artificial barrier to effectively using funds and effectively improving the lives of people. So I would ask you to reconsider that because you can't say 150,000,000 is somehow equivalent to 2 billion. With that, I'll go to Assembly Member Rivas.

Thank you, Chair. I want to thank the Chair and the Vice Chair for already asking or bringing up their concerns, which I share and also align with your concerns. Last week I sent you a letter. I'm the Chair of the Los Angeles County Delegation, which is a group of 39 members that represent Los Angeles County here in the Legislature. We have significant concern that our communities in Los Angeles County were not on that map on your priority map. Right.

Our most disadvantaged and highest need are not qualified for this funding. And so I just want to just share our concerns for our county and how will this process change to include our highest need communities of Los Angeles?

Yeah. Thank you for that. And thank you for your letter. And we will be providing a response. Let me just also state that the priority areas, which are those larger areas marked on the map, are one part of the map and the other part is the unserved areas. And so I encourage you to look at also the unserved areas. Those are eligible for funding in this program, even if they're not part of the priority area layer of the map.

So those unserved areas, I believe, show then those are areas where there is no existing infrastructure that serves, available to serve at 25-3 speeds. And those areas would be eligible for this funding.

Okay. But the map will be updated. And when will we have the next draft? I know it's in your timeline, but I just want to know when you think we'll have the next draft.

That's great. Let me turn to Director Osborn for an estimate.

Yeah. So we will be updating the map based on feedback from stakeholders. And with our June application window, we'll be having the map prior to that. I can't say if it's exactly a month before, but we'd like to have it well before the people having a chance to look at it and understand and then be able to use that as a basis for applying.

Okay. Well, I look forward to your response to our delegation, and we'll just be keeping an eye on the areas for Los Angeles County.

Absolutely. Thank you.

It's more in the neighborhood of absolute outrage for our community. In East Oakland and in these areas that are not covered in the urban core component around unserved, we have 75% of people who are unconnected living in those areas, in that urban core. And because of the way that these maps have been drawn, it is possible that these areas will receive 20, will receive 20 additional points for being able to be qualified as priority areas.

That is not going to happen for people in Oakland, for communities in Oakland where 12% of our children did not have connectivity and we had to work to have 97% of them do that, and we did that on our own, without state intervention, and without support, and that should not be the way.

And so I'm seriously concerned, skeptical, outraged, and really questioning whether these maps are the maps that we should actually be using, because this is antithetical to what we're trying to achieve and actually ingrains into our statewide funding allocation, the historic racism and systemic essentially kind of ignoring of the demographics within our urban core communities.

And so while I appreciate that we have an intention to redraw the maps with additional stakeholder information come second round of funding, I'm very concerned about being able to reach the timeline that has been afforded to us with these federal dollars in a way that is inclusive of the communities that this funding is supposed to be for.

And I agree with Mr. Patterson that we need to consider, obviously, the 50/50 split moving forward, so that our rural communities and our urban core communities are continued to be considered. But I have a problem when East Oakland is not considered in that area, but places like Piedmont in my district are. And that's what happened.

So I don't know if it was the metrics that were used, the overlay that was not applied, where we just have a complete failure to actually be able to capture the need, and I am seriously just from a set of oversight, it would be, for me, $2 billion ill-spent. So I would love to be able to hear how, in this point in time, CPUC intends to address the ills that we would essentially perpetuate should we be moving forward in the way that we are?

Thank you for that question and your comments. I absolutely agree and hear you and understand the concern. I think part of what you're saying reflects, and also Assembly Member Patterson's comments reflects the diversity of the state and the diversity of the nature of the problems that we're facing in addressing the digital divide. And we don't have a one size fits all solution. And I think we all recognize that we need many, many tools to come at this problem.

I apologize for the description of the bigger areas on our map, which represent standalone network areas being termed priority. I think that's caused, it was not what we intended to say that those maps would be our priority and funding. It was meant to be a tool for those areas where the applicant needs assistance in developing and getting the information on how to design a standalone network. The other layer in our map is the unserved areas.

And I think for the urban core and the problems in urban areas, the unserved areas is the place to go to look for the areas where we would be focusing the funding. And so those are the smaller indications on our map that show, according to the data that we have, every place in California where there is not infrastructure. And so those areas include a lot of places in Oakland, in Los Angeles, in the urban areas.

In those areas, it's usually a smaller, these are the urban donut holes that we talk about. So they're usually infrastructure surrounding people who have been overlooked from deployment of infrastructure. And so we do intend to deploy funding into those areas to make sure that that infrastructure is completed in the urban areas. Unlike rural areas, where there's just no infrastructure at all, and we would be looking at a solution there that's a standalone, sustainable network.

So it's kind of two different problems that we didn't depict well in our rollout. But we do intend to address both with this funding and, in fact, prioritize the most disadvantaged communities and the ones that have been overlooked for so long. In addition, I recognize that a lot of the problems here are not just limited to infrastructure. In some places, there is infrastructure available, but it's not accessible to residents. And that's where we deploy different tools.

And we do have funding for subsidies for adoption, as well as digital literacy and lots of other things that we also need to work on at the same time so that we address all of the needs of community members, especially those disadvantaged areas in our urban communities.

I just want to make sure that we are applying a level of granularity that I don't think has been demonstrated in the maps with clarity. So, just to be clear, priority areas of East Berkeley, Hayward, Pleasanton, Livermore, Newark, have all been identified as these priority areas. And that might be the level of granularity that you're talking about in Alameda County. It excludes the flatlands of Oakland, where there are connectivity issues.

I know that because I sat on a Committee where we had an individual running around while we were with Oakland Undivided, going to different parts of our city, the entirety of Oakland, holding up their phones to see if they would work, seeing if there were actually consistent wireless connections, seeing if there were consistent broadband connections. And they were not consistent.

So while I understand that this might be kind of like a gross kind of gross motor function kind of application at the level of granularity that you are talking about, looking at, but I guarantee you, based on the information that you have provided so far, that the most unserved and underserved parts of the urban core have been left out.

And we'd be happy to follow up with you about specific areas. But I also encourage you to look at the unserved layer of the map. Not the priority areas map, but the unserved. And that's where we really need to dig in to make sure our information is accurate about the availability of infrastructure in those unserved areas.

Thank you.

Thank you.

Thanks, Madam Chair. I would concur. I have some questions as we follow up with these definitions. So you're married to unserved, and you can't be a priority unless you're in an unserved area, right? Because of what I read on your report, it says the priority areas are a subset of all of the unserved areas. I got that right?

That's right.

So you got to be unserved before you can be a priority.

According to SB 156.

Okay.

That's for eligibility for the funding.

Okay. So that's where the disconnect, I think, is.

And the disconnect is in the labeling of priority areas, which were meant to be a tool for certain areas that needed a standalone infrastructure and information for that. It wasn't meant to define where we're necessarily going to give the funding. It's a subset, as you said. That's very accurate.

When you're saying priority, you're referring to infrastructure. And a lot of folks here think priority means those that are underserved and those where equity needs to overlay. And so it gets very confusing because I listened when you talked to begin with, and I keep listening keep going back and forth, and you keep interchanging infrastructure, and these folks keep talking about equity. And so I guess I just don't know. If there are areas that are unserved already have some infrastructure in place that you can connect to or you can enhance to make it work, then where does the equity come in? When do you roll that part into the equation?

And really well put. I think you're pointing to an important distinction here, that the unserved areas are the areas that are eligible for funding under SB 156. We have those marked on the map. But if you don't activate that part of the map, if you only look at the priority areas, the unserved areas won't show up. And so if you're looking at the map of just priority areas, which is actually, it's not necessarily priority areas.

It's those areas where there's no infrastructure to hook up to, as you said, where you really need a standalone network. And locals are working on these, lots of entities who are designing networks to be ready to apply for those larger areas where you need to design a network. We've provided help with funding and support for them so they can come in with a standalone application. That's different than the unserved. So that's one type of application we expect to get. We also hope to get applications to serve the unserved areas that are marked on the different layer of the map, including the areas in the urban core that are unserved.

But as I understand it, anything that's in the priority is in an unserved area because it's a subset of unserved. Correct?

The priority areas all serve unserved areas. That's right.

So when I click on and I'll see priority, it's got to be in one of your unserved areas.

So that's a good question, that the unserved areas are smaller. It's a patchwork throughout the state. The priority areas are larger. And it's guidance for an applicant who could say, you can serve these unserved areas by coming forward with a proposal to build a network in a broader area. And I believe that we wouldn't provide funding for the whole project, so we would only fund the unserved parts. But a new entrant could come in and say, I have this project. I'm going to serve it.

I'm going to serve this whole area. Rural areas are a better example where there's no infrastructure here. We want to serve everyone. There are these unserved customers that we need to get to. But this is a viable project moving forward into the future that can be sustainably funded through the customer base.

Yes, but to Ms. Bonta's point, she's got people that are served, but this is not good service. How does she get to be a priority then? Because she doesn't fall. You've got unserved, right. And you tell me that priority is a subset within unserved. She's got people that are served, but they're not getting good service.

That's right. And so those areas that have infrastructure to serve above at 25-3 or above would not be eligible for the funding in this program pursuant to the statute.

And just to interject a little bit, that's exactly the problem. So there are places in West Oakland and East Oakland that are unserved, grid by grid, who would not be eligible for funding right now because of the way that these maps have been drawn.

The requirement on served versus unserved is a statutory requirement.

They are unserved.

Okay. If they don't have infrastructure at that speed, then they would be eligible for funding in the program. They are eligible and someone could come forward, a provider could come forward with an application for funding under the program.

Because they have service, but they don't have good service?

Because they don't have infrastructure at the speed. They've been left out of the infrastructure. Infrastructure has not been built in those areas. Even if there's infrastructure around, if there are certain areas in the Assembly Members' district that actually don't have infrastructure because they've been left out, those would be eligible for funding.

So I just want to clarify for all those watching, it's the red dots that are the unserved. And what I would suggest is part of the problem that I think has been created by the map. I think you should throw out the maps and get the funding out the door. That's what I think you should do. Because I think if you continue down this path, your feedback loop will be another feedback loop, and there'll be distrust in the process.

It will delay it further. So if I were the CPUC, which I'm not, I'm a Legislator, I would throw out the maps, get the money out the door. You know what's unserved. Give the money to the like, just let people go build it. That's what I would do. If you're not going to do that, what I would say is part of the problem you have, you have identified several times, and I think I've understood it correctly.

Where you've said, we created the priority maps because we said, if you do this, it's profitable and you're going to serve the unserved. If your goal was just to give people a good roadmap, which I think that's what you meant by priority area, you're like, oh, this is an area that might work and serve the unserved, then don't give them 20 extra points. If your point is just to give some municipality a roadmap, you don't have to give them extra points.

Give 40 points to disadvantaged communities, and don't give these priority areas, which you look in the urban areas where the priority areas are, it's Rancho Santa Fe, it's Piedmont, it's Malibu. Remember, if it hits you right between the eyes, I mean, that's crazy.

Going back, though, to your point of the wireless versus the wired, and you were speaking, Madam President, about whether or not there's infrastructure there. If we're not so hung up on the wired versus wireless, then we shouldn't care so much about whether the infrastructure is there to provide the service. Right. Because you can do a whole lot more with the wireless. Right. And so I guess I just don't understand why you're so married to that either.

You got money elsewhere for wireless, like, I get it, and you have some money you want to use for wired, but I think you should be more agnostic as it relates to the wired or the wireless, because you say some of it's based on infrastructure. Do we care as much about infrastructure if it's wireless?

There's still infrastructure required for fixed wireless. This is not wireless. This is not your AT&T and Verizon cell phone. This is not cell phone service that we're talking about. This is broadband to the home. And so this is having the ability to access the Internet for learning, for doing Zoom meetings, for medical appointments in your home. And so this really is, we're trying to provide. The money is meant, according to the statutory direction, to provide reliable service well into the future.

And the federal portion of the money is consistent, being allocated, consistent with federal guidelines which do emphasize wireline for that service to the home to provide high quality Internet service well into the future. Again, we have programs for fixed wireless service providers, and that's a good fit in many areas. It requires line of sight. Normally, it's a different type of technology, and it is a good fit.

And we have money that is going out and that those projects can be designed quickly, they can be deployed quickly. We're getting money out the door to fund those projects now. This wireline program is meant to be a thoughtful approach to give every community in California what many communities currently have now, which is a wire that is able to come to their house and provide reliable service into the future at low costs and high speeds.

And so it's that low cost, high speed that you can get when you have we'll help to pair some of these projects with middle mile when you have a wire line to the home and it lasts well into the future. But I absolutely agree that we should be funding some fixed wireless projects. They can be done quickly and we are getting money out the door for those as well.

But I do want to point out again the funding discrepancy between fixed wireless and fiber to the home is massively different. And at the end day, all we care about is the speed and quality of the network, we should be technology neutral. It is cheaper to do fixed wireless in many rural communities. And when you look at the dollars that are going to be left out, we're doing this weird trade off. It boggles my mind that we are complicating something.

And if we do something complicated and we actually get at equity, I'm fine, but we're complicating this and we're not getting at equity. So we're not technology neutral. And 25 million versus 2 billion is not something you can say we're getting money out the door now. Yes, you're getting money out the door now. That's an accurate statement. It's just so disparate that I think that's misleading.

And two, I also want to point out with your priority areas, we have a letter from TURN and I'm just going to read it because I think it's a really important thing. The cost-quest methodology crafted priority map areas that uses methods to identify where Internet providers may find profitable communities to serve instead of identifying unserved areas that would substantially contribute to meeting the state's broadband objectives. This deviation can be seen in the cost-quest map results.

Only 25% of the cost-quest map's identified priority areas are currently unserved. I know what you're doing. You're trying to create a business case for continued maintenance of fiber to the home. It's expensive. It's expensive to build, it's expensive to maintain. I understand what you're trying to do. I just don't think you should be giving them 20 extra points if it's already profitable.

Can I just ask a question? So I think part of the issue is the nature of the infrastructure that we have right now in parts of the deep core. And there are definitely areas in west Alameda, East Oakland, West Oakland that are relying on 1970s copper wiring. So I'm just going to ask a question for clarity's sake, which is will the unserved areas, like the apartment in East Oakland, that is using copper DSL from the 1970s? So that's infrastructure, right. That's kind of outside of the priority areas as indicated right now in the current map, will they be able to apply for this funding without the 20 point deficit?

Yes, they would be able to apply.

Would they be competitive for that funding with a 20 point deficit?

The 20 points also gives, that category, gives points to disadvantaged areas, and so we need to do a better job at clarifying that. But the idea is that an applicant could come in to serve that area and get those 20 points the same as the priority 20 points by showing that they're in a disadvantaged community. So, yes, and with respect to the eligibility, a copper DSL wireline, I would assume that would not provide 25-3 under the federal rules for the funding.

For the federal portion of the funding an unserved area is not served with a wireline at 25-3. Is that right? And so that means even if we had a fixed wireless project in the area, it would still be considered unserved under the federal rules.

Thank you.

Yeah, we can do one last question, and then we need to move on to the next panel.

Well, then I'll just echo then, my colleagues, on the wireless issue. I think we acknowledge that it's prohibitively expensive in certain parts of the state to do a wired connection. And I think the goal, obviously, I understand the rules, but the goal should be to maximize connection for the most amount of our constituents. The goal isn't necessarily to get a wired connection to everyone.

It's to maximize how many people have a real connection that is reliable, that is fast. And so I'll just echo and just ask a different question then. But thank you to my colleagues for that. Just two very brief questions. The California Broadband Investment model talks about mentions the CPUC contracted with CostQuest Associates. Was there an RFP issued for this? And what were the parameters of that RFP?

So, we, the PUC had contracted with CostQuest prior with the initial California Broadband cost model that we used in 2020. So we amended that contract to move on to do the next round, which was the California investment model.

Okay. And in the creation of these priority maps that have been pretty thoroughly discussed right now in determination of what the application process should look like, were there any industry partners included in that process? Were there any workshops with public comment? Was anyone else invited into those discussions?

Yes. Through the rule-making, where we created the rules for the program, which were published in April, we went through the public process, deliberative process that's part of the PUC's rule-making.

Including industry.

Yes, including industry. Yes. We received comments from industry as well as non-industry stakeholders.

Okay. I appreciate that. Again, I know we got to move on, I just want to echo the Chair's comments as well about getting this funding out. It's really critical that we do that. Thank you.

To address your first comment as well, broadband is an essential service. We need to provide broadband to every Californian, and that is at speeds of 253 minimum. The projects that are eligible for this money would come forward to provide 100 up and 100 down for this program. There are other-- I acknowledge your comment that a wireline might not make sense for every structure household in California, but we do need to provide service far into the future for every Californian.

And this is not one size fits all, as I said, there are other different tools that we need to use, but we need to focus on reliable service, affordable service, and service that lasts into the future. So there's a lot kind of to unpack in all of that. There's a lot to balance in all of our different programs, but those are the things that we're trying to achieve.

And we also intend to focus funding on our disadvantaged and equity communities first and really prioritize those.

Would you agree that a wireless technology could meet those requirements, though?

I believe some of them do, yes.

Okay. Thank you.

So thank you very much, President Reynolds and Director Osborn. I hope you will remain present for the second panel. And through public comment, you may now go back to your seats in the audience, and we are going to move to our next panel. Thank you. So we'll continue to panel two to hear from two stakeholders whose organizations have been closely involved in implementing the FFA.

The following witnesses may approach the dais: Shayna Englin, Director, Digital Equity Initiative at the California Community Foundation and we have Tracy Rhine, Senior Policy Advocate for Rural County Representatives of California. Members, I'll ask you again that will hold our questions to the end of their presentation. And with that, I'd like to ask you to begin.

Thank you, Madam Chair and Members of the Committee for your interest and attention to this important and highly technical issue. I'm Shayna Englin, again, Director of the California Community Foundation Digital Equity Initiative. In that role, I lead the Digital Equity LA Coalition, a partnership of more than 40 community based organizations serving communities across LA County and beyond. We partner frequently with Oakland Undivided and are delighted to do so.

The coalition includes organizations working to provide vital education, healthcare, housing, immigration, civic engagement, arts, and climate resilience services, among many others. And these organizations have come to digital equity work as a consequence of encountering a consistent barrier to the progress, equity, and justice they work towards. And that's the digital divide.

So I speak today on behalf of the hundreds and thousands of unserved Californians and the hundreds of thousands more underserved who remain stuck on the wrong side of the digital divide and are marginalized in myriad other ways, low income Californians, immigrants, people of color, Californians who live in communities and neighborhoods that have seen decades of disinvestment and underinvestment, and for many, dating back to the redlining maps of the 1930s and 40s that deprived them of capital investments and thereby economic, educational, and civic opportunities.

And I want to pause for a moment to note that Senate Bill 156 was actually intended, and it says in the statute that this last-mile money is intended for both unserved and underserved. I'll quote from the decision, actually, "use state or federal infrastructure monies deposited into the federal funding account to implement a program to expeditiously connect unserved and underserved communities by applicable federal deadlines". So we aren't just talking about the unserved.

So, in short, I speak today on behalf of the people and communities that have yet again been excluded and deprioritized in the federal funding account priority areas map, and thus severely disadvantaged in the upcoming competition for billions of dollars in public investment. I'm here to raise three critical areas of concern about this map and how it was developed and how it is, at least in public communication and guidance, going to be utilized, and to suggest a remedy.

First, the priority areas map is weighted overwhelmingly, as we've heard, toward the wealthiest, most advantaged, best connected communities in the state, and leaves out the most disadvantaged, least connected Californians. This is clear from a 30,000 foot vantage point. You just nearly need to apply the equity layer on the map, which color codes the priority areas on the basis of their score on this socioeconomic vulnerability index. Green is least vulnerable, red is most disadvantaged. The priority areas map is a sea of green.

It also comes into sharper relief with spending more time in the details of the map, and I'm going to give you some egregious examples of what this looked like. These are by no means exhaustive. A sprawling CPUC priority area includes Pebble Beach golf clubs. The initiation fee for membership there is $47,500. This area includes all three courses used for the AT&T Pebble Beach Pro-Am tournament.

According to the map, this priority includes vanishingly few unserved locations, but it still needs $14.4 million in public subsidies to cover them. Montecito Country Club, which counts Oprah Winfrey as a Member and neighbor, that's fun, And surrounding homes, is included in a CPUC priority area, and the map indicates it needs more than a million dollars in subsidy.

Among the communities, those red dots that we were just hearing about that the map alleges is unserved, is an enclave of five homes, one of which recently sold for nearly $7 million. Rancho Santa Fe in San Diego county is in a priority area. In 2021, per the US Census, the median household income of Rancho Santa Fe was $196,500, and 0% of Rancho Santa Fe families live in poverty.

The California Broadband Interactive map indicates the area is fully covered by either Charter or Cox service, that both opt for gigabit service in the area, and that adoption tops 80%. Yet the map indicates the area needs nearly $4.9 million of federal funding account subsidies. And in Los Angeles County, the priority areas map includes most of Rancho Palos Verdes. In RPV, as is known locally, the homeownership rate is 78%, the median household income is just under 150,000 a year, nearly twice the California median.

And again, per the California Broadband interactive map, the area is covered by both Cox cable service and Frontier fiber service, both of which advertise speeds up to a gigabit, and the area has adoption rates of 80% plus for those services. Nearly everyone in RPV currently has fast, reliable service they can easily afford.

Calabasas and Malibu Hills are also prioritized, and I like to picture the Kardashians in Calabasas celebrating, like 'lip fillers for all we get publicly subsidized broadband finally', and Glenn Close maybe in Malibu Hills, taking comfort that she's a CPUC priority as she processes her Oscar snubs. Meanwhile, the priority areas map excludes every single community in the heart of LA County.

All of the neighborhoods and cities with the highest percentage and largest numbers of disconnected people in the most populous county in the state have been left out, including nearly all of its most disadvantaged communities and all of Los Angeles' historically redline neighborhoods. Which brings me to our second concern. If spending is allocated as indicated in that priority areas map, and again, we've heard some different commentary here than we have in public documentation and in public comment as recently as last week.

We're at risk of squandering this historic opportunity to make investments that meaningfully, sustainably close the digital divide. The single best predictor of whether you have fast and reliable Internet is whether you can afford it. Statewide, even as access at the slowest speeds has increased for everyone, the gap in access between the poor and wealthy Californians persists largely unchanged in 20 years.

By releasing a prioritization scheme that almost entirely excludes the most disadvantaged communities from consideration, the Commission has positioned the federal funding account deployment to double down on the divide and not close it. So our third and final concern, last week-- I shouldn't say final, the third concern we'll talk about today. Last week, a member of the Digital Equity LA coalition, in conversation with the CPUC staff member, summarized it as GIGO, garbage in garbage out. The priority areas map reflects a possible GIGO situation in two ways.

First, rather than relying on deployment and subscriber data provided directly to the PUC underseal at a level of granularity required by statute in developing the priority areas and associated cost, profitability and subsidy modeling, the Commission relied on a combination of, we've heard, CostQuest data and modeling on Form 477 data, which is notoriously inaccurate data provided by SPs to the FCC with no validation and a set of vaguely defined, or actually not defined at all, block level CPUC data.

And second, in developing the priority areas, Commission staff leveraged only this mix of census block level availability data. There was no service quality data included, no speed test data beyond that which may have been included in whatever that block level CPUC data was, no adoption data, and, most egregiously, no data around need. The socioeconomic vulnerability index was applied to the priority areas after they were developed, not as a part of developing them.

Indeed, the 22 page report documenting the process and methods utilized to develop the priority areas does not include even one instance of the phrase disadvantaged communities. These three concerns sit atop some real bafflement on our part that the priority areas map seems to have been developed without reference to the Commission's own guidance, guidance that we participated in the proceeding, and we really supported that decision.

Quoted from that relevant decision, again, page six, "the program will use state or federal infrastructure monies deposited into the federal funding account to implement a program to expeditiously connect unserved and underserved communities". Page 101, "require communications division to include demographic information, such as the number of low income households or disadvantaged community status in developing priority areas".

And on page eight of the appendix, "the Commission will rely on data from a variety of services, including broadband deployment data, subscriber data, crowdsource data, service quality data, and qualitative data". Which brings me to our suggested remedy. And on this, we're with the Chair, ditch the maps. Given the rapidly approaching deadlines affixed to federal dollars allocated to last-mile deployment, as we've heard a lot about today, we're not asking that the map be revised for use in implementing the Federal Funding Account.

That ship seems to have sailed. Instead, we respectfully and humbly suggest that the Commission make minor revisions to the decision to rename the priority areas to 'business opportunity areas' or something similar, revise the application scoring rubric to remove or at least dramatically reduce the 20 points awarded for proposing to build in one of those areas and remove the direction to the communications develop priority areas, because there just isn't time.

All changes fully in compliance with the letter of SB 156 and changes that will bring Federal Funding Account implementation more fully in alignment with the spirit and intent of Senate Bill 156. Thank you so much for your time.

Good-- I think it's still morning. Good morning, Chair and Members Tracy Rhine with the Rural County Representatives of California. We represent 40 rural counties where a large majority of those unserved in rural areas live.

I want to begin with a conclusion and that is we are both confused and concerned about the priority maps. I think that's what I'm hearing from this membership as well. From a high level, the priority maps, we need to understand what is the purpose? Are they just a guide to help with a business case or are they a building requirement? And in the documentation, the CPUC's documentation on their website, it really isn't clear. And I'll go through that a little bit later.

Why are some areas excluded? And we've talked about that, Shayna's talked about that. And I'll give you a couple of examples from the rural communities as well. And how does this fit with the band aid and SB 156 and the FFA program to serve those in need? And lastly, can we fix it with the time constraints? So maps appear to be important element of the process. Newly released documentation states that eligible projects must be in the priority areas.

Now there's a process to augment the priority area so an applicant can say, 'oh, there's this unserved area, I want to add to it', but you actually have to go through a process to add to that priority area as part of the application. Or this is what I'm getting from the user guide. And that becomes problematic because there's a process that you have to do.

And part of the process is to say if there are served areas within the new area that you would like to add to the priority project area, you have to have rationale for why you are including served areas. Well, I think that's interesting in that, and I'll go into this a little bit more later in my testimony, a lot of the locations in the priority areas are actually served. And I'll tell you about one of our counties and what they're looking at.

And so it seems to be, again, I would say seems very confusing about how do the maps really work? How do the priority areas influence where you're going to build and how much is the funding? And that's the other part of it is the priority areas have a funding allocation attached to them. So if you look the priority area, it will say this is the amount for the estimate for the projects in that area. And we don't understand exactly how that works.

Is that a hard line, that's what you will get funded for? Or is it just a guideline because the estimated allocation doesn't account for a number of factors on the ground? And let me give you some examples. So in Alpine County, cost estimates seem to be excessively low for very heavily forested areas and fire prone areas that need to be extensively fire hardened. Another project area in Alpine has very large parcels and that means you're going to need additional extended connections, which is an additional cost.

In Alpine County as well, Bear Valley has about 500 locations that are unserved completely and is 5 miles from a priority area that stops on the county line of Calaveras. Yet that's not considered in a priority area. And those are 500 locations that are completely unserved. In the Kirkwood area, which straddles three counties and shows as unserved on the FCC map, are not included in a priority area. And some might say it's a Kirkwood, it's a ski resort.

But the reality is there's a workforce there, there's a community there, and it's economic development to be able to have the broadband when you have the tourism in that area. Another county quickly that I want to reference is Tuolumne County. And looking at their map, 77% of the locations in the priority areas are served. The priority areas with a minimum of 50% unserved make up only 7% of the priority area locations.

7.9 million is targeted for a priority area where 89% of the locations are served, a majority with gigabit speed. Further, the central region contains 45% of all priority area locations with only 27% of those unserved. It seems to us that the PUC has kind of taken a top down approach to putting together the priority areas. And I think that that counters a lot of the efforts that the state is taking with broadband.

The California Department of Technology is having numerous working groups, state strategy planning groups, National Telecommunication Information Agency has planning workshops for BEAD and the sheer existence of broadband consortium. I mean, this has been a community up process until now. And that's because we know the literal lay of the land. We know what the topography is, we know where the forests are, we know what kind of barriers there are to actual deployment.

So what we are asking for, specifically looking for here is that there's a clearer message on timeline and process, including how we can help them. We want to be a partner with the PUC and this body to make sure that we are able to get this money out in a timely manner. Second, we want to see the underlying data.

If we are going to build in these priority areas, we need to look at the underlying data and to understand how they came up with the cost estimates and the priority areas themselves. Lastly, addressing our concerns and having a process for that, and you talked about a feedback loop and that's what we would like to see that's a little more open. And I was heartened to hear the things that President Reynolds said in her opening and talking about how they're going to have community case workers.

I think that's a great idea. And so I think that this is an unprecedented undertaking by the PUC and we understand that and we just want to be able to partner with them and our urban counterparts because really we're more similar than we're dissimilar to get our unserved folks served. Thank you.

And thank you both for your presentations. I appreciate that you both bring the rural and urban perspectives and take away from the map. I think sometimes, I think you just said it best, Ms. Rhine, that there's actually more similarities than differences and that's not always the case. And so I have a few questions and I'll open up to my fellow Committee Members. And I want to thank Assemblymember Garcia for joining us. For the counties you represent, Tracy, this is for you, how much is this map having effect on how those counties are approaching the planning for the last-mile?

I think we are receiving a lot of questions about the map and how, I mean, going back to exactly what I said, we don't understand how it works. And that's the problem is the county is like, well, can we build other places? Can we put that as part of a project? How does that actually work? Because they're unserved areas. And in other parts of the decision, it says that you can build out to unserved areas.

So I think it is impeding our ability to plan six months out for using this funding and for the other funding that will be coming down.

Okay. And thank you. And Sharon, I think you integrated into your comments, but I'd like you to repeat it because I think you had a very good idea and maybe that would be a guide for the CPUC, should they continue with the maps, which again, I would throw them out, but if we're going to continue, what would be alternative metrics that could be used for integrating equity into the programs?

So the decision actually already includes a fair amount of that. So if we were to just sort of remove this 20 point category, which as of right now seems to only address the priority areas maps and then has like a sentence, I don't have it in front of me, so I can't remember the exact details, but it says something like factors like disadvantaged communities will be considered with no details. We have no idea what that actually means.

So I would suggest that the alternative would be to maybe add some details if that's like a percentage of adoption compared to alleged service. There's any number of ways you could contemplate it, maybe actually kind of define that and make that the points basis instead, or ditch that 20 points altogether. And there are, in fact, within the other kind of points in the other pieces in that rubric, I think they do largely cover it.

Again, in terms of kind of requirements for low income service, requirements for pricing or incentives for pricing, I should say, kind of incentives for covering a whole area, all of that.

And a final question, I hope one of the things we can take away from this oversight hearing is not only having our questions answered, but also to provide some verbal guidance. One of the problems that we have is to revise the process that the CPUC has already undertaken. It's a minimum of 30 days, and if we're concerned about the timeline, what would be, from each of your perspectives, the best way to remedy the current situation?

I mean, I know what I would do, but I'm not sure they're going to do that. So what are other options?

I might need more time to think about what that specifics are, but I do think there is actually precedent, even kind of within this decision of the Commission making kind of minor changes on a fairly fast timeline.

And not all of those changes, and our Commission friends will, I'm sure, correct me when I'm wrong, not all sets of changes actually do require the 30 days and the whole comment and reply period and all of that sort of, there are sets of changes that they can make that don't require that process.

And I do actually think that, again, the decision as a whole and the rubric and kind of how this whole thing was approached, in part due to a very thorough proceeding with lots and lots of parties, including industry, which is always a party at the PUC, and lots of community stakeholders and localities that had never participated before. So it was a very robust proceeding. And I think the Commission decision ultimately really reflected that.

It's in this implementation of this one thing that I think they've gone awry, and I think there can be very minor changes that maybe don't trigger the whole process. And either way, even if we said we needed 30 days to make these small fixes, that is a fraction of the time that would be necessary to go back and actually get to a place where some version of this priority map is going to be useful.

I don't think I have anything to add. I think she said it well.

You might have said it, but it's a little unclear to me, how would you incorporate the underserved element that you say is definitely in the bill?

So there are a number of different ways that you could define underserved. I think one thing that's helpful to maybe take a step back is when we talk about these unserved locations, and even I think we've done it. And as advocates, we do this on the regular, we are pretending at a level of certainty and specificity that does not exist and will never exist.

If our contention is that we can't get this right until we have an absolute certainty of every serviceable location, including, say, apartment units and apartment buildings, which is a huge part of the issue in urban areas, including, say, second and third dwellings and rural areas, ADUs. There is not a universe where we're going to get at a perfect understanding of every location that should get served and whether or not someone actually serves it with fast, reliable service.

So what we have to get comfortable with is a kind of set of data that together paints our picture. And so there is what the ISPs have say they do and what they say they offers at what locations there is, whatever is going to happen at the federal level and at the state level of getting a handle, we think, on the locations and trying to answer the MDU question.

But then there's, look, if you have an area and the PUC does this, in some things, I think in particular, like around fixed wireless, where they say, all right, if a service provider says, we provide gigabit service to everyone in this area, and yet they have 10 subscribers, that's a question, right? And then the census says, actually 50% of households in this community do not have an Internet subscription.

Those three sets of data probably paint a much more accurate picture of the community in question than if we were to grind ourselves and the PUC Communications Division staff were to grind itself trying to get to a level of specificity and accuracy at the location level that they can't.

And so I think that's how we get to this underserved is you can actually provide points, you can provide an analysis of a given project that takes that kind of totality of what's actually happening in a community into account.

If may ask one, you can have underserved.

And not unserved.

Yes.

You can. According to the statute, you can.

And that will exist in the world is my question, right? So that's where we might be missing, folks, because the way that was presented earlier was it's unserved. And then you have a subset of priority within the unserved. And that's the only way that we're doing this here. But what I want to know from you is you can have underserved outside of the unserved. And we might be missing those folks.

We absolutely are missing those folks. I just got done saying you can't be certain about anything. I think my rural friend and I can totally agree on this. We can be certain that that is absolutely true.

Okay. And you say you're never going to drill down 110% on it, but nonetheless, we can get a little closer than what we're--

We have to be comfortable acting with imperfect information because we will never have it.

Understood. Thank you.

Ok, Eddie, did you want to make a comment or-- No, you're good?

And it may have been touched on and apologize for arriving late. We have received quite a bit of feedback on the maps that were just rolled out and the weight that these maps will carry as it relates to the prioritization. We serve Imperial county, very rural, eastern Riverside County, also components of some rurality, but some metropolitan-like communities as well.

What type of feedback have you received about the maps and whether or not it's encompassing? Kind of piggybacking off of the conversation here. Unserved or underserved, what type of feedback have you received from your members of your associations, and have they raised concerns about how much weight the maps will carry to determine funding priorities?

Yeah, absolutely. I think it's very easy to answer. Yes, we are concerned about how the priority maps were drawn, the number of served in some of those areas and the number of unserved that are not in those areas for rural areas. And so I'll let Shayna talk a little bit more about the urban areas.

I would describe the feedback we're getting as alarm, and it's a weird context to use this word, but and kind of hurt, I guess.

And I would say that kind of in two ways. One is that these communities have been engaged in this process. The community organizations, the smaller cities, the education organizations. We have a school district in the County of LA that has been doing everything it can to figure out public private partnerships and how to be able to serve its unserved kids.

And this map comes out that says priority on top of, you know, whether it was intentional or not, what has happened now is the State of California has published a map that says priority on the top of it that excludes all of these communities.

And so there is kind of alarm at what the implications are going to be for their work to serve their communities and there is, I guess, kind of some hurt that yet again, these communities, which are, again, mostly black and brown, our low income, our immigrant communities, have been excluded.

For the chair, with your permission, if maybe we can have President Reynolds or member of her team respond to the question, if not already responded to prior panel.

I think it was covered in the first panel.

Okay. Can I assume that there is some remedial course of action that has been discussed?

I think what we were given at the beginning was it's in the presentation about what the feedback loop would be.

And I think there's been concern expressed by, I think, every member of those present here today about the time it will take to remedy the situation and the timeline of getting the dollars out. And I think there's been some proposals made. I think somebody suggested removing the points of the priority areas. I don't think it remedies the hurt, and I think that's a great word to use. I think one of the most important jobs that we have as legislators is creating trust in government.

And the process was robust and had the potential to create that trust. And when that priority area map came out, it felt like that trust might have been broken. And recreating trust in the process and in a timely manner will be challenging. I don't know if that's the summary. That's like a very emotional position.

I'll watch the tape and I'll also apologize again for arriving late.

Well, I want to thank you, Ms. Englin and Ms. Rhine, for participating in the hearing.

If you want to-- We're going to move to public comment. So if you want to take your seats again. So we'll now turn to public comment in the room. Members of the public who that may wish to provide public comment may now approach the mic. The Committee will also receive written public comments that were shared with each member's office in advance. And members of the public, I ask you keep your comments to two minutes each. Please begin with your name and affiliation.

Madam Chair, I'm here today representing the California Emerging Technology Fund. My name is Richard Polanco. I had the honor of serving in this great institution for 16 years. I'm here on behalf of the California Emerging Technology Fund. We've provided each Member with a three page letter with our recommendations. I do want to go on record publicly. We recommend that all the maps, both federal and California maps, be thrown out.

All public investments in Internet infrastructure should be based on performance to accelerate deployment to the hardest to reach unserved areas. Those unserved areas, one rural and remote communities including all tribal lands. Second, high priority urban areas, maps should only be used for information and not to control the grants. Let me very quickly go through the points on the recommendations. Set aside all maps as a deciding factor in grants for the last-mile projects. Declare that any home or location should be by actual data.

The underserved shall be eligible to be included in the application for the Last-Mile Project Grant from the California Advanced Services Fund. Prioritize grants to deploy to the hardest to reach unserved areas. Do not consider other applications until all applications for hardest to reach areas have been funded. And lastly, Madam Chair, I would suggest that the leadership of this, through your leadership, convene over the next four weeks every Friday, 02:00 bring the stakeholders. A billion dollars is at stake, millions of families may lose out on the opportunity.

Thank you.

Good morning Madam Chair, Members. Thank you. My name is Linda Thomas. I live in Fresno county and I was motivated by extreme anxiety and hurt when I saw the maps. I sit on the San Joaquin Valley Regional Broadband Consortium. I also served as an educator in Fresno county for the last 30 years in the community college system. Recently before my retirement, I was a Vice Chancellor at West Hills Community College District in Coalinga.

I want to talk a little bit about the west side of Fresno county. It's an area where the words unserved and underserved are overstatements. There is literally no infrastructure. It's an area where roughly 50% of the population is below the poverty level. 90% of the students are eligible for free lunch. 60% of the individuals identify as Latinx and identify English as their second language. It's also an area where Ag is the largest employer, but economic development is stifled because of the lack of broadband.

Ag producers want to implement ag technology, but they're not able to because there's no broadband there to light up their fields. You can't light up a field with fiber, you have to have towers. That's the bottom line. Because of these things, this area was identified by the San Joaquin Valley Regional Broadband Consortium as the most priority area in our area. It's over 3500 square miles i and the CPUC map did not have it as a priority at all and it was shocking.

And I just want to thank you for pointing out that these maps are incorrect. And also thank you for pointing out that the CPUC should be technologically neutral because using broadband for a housing project is not what it's for. Broadband needs to be used for rural areas where there's open topology and so running fiber to the home and in rural areas is analogous to running an off ramp to I-5, to every person who lives in a rural area. It is economically unfeasible.

Thank you.

Thank you.

Reminder, two minutes.

Hi, members of the Committee, Oracio Gonzalez with NextGen California. We certainly want to align ourselves with the previous panel, the last panel, regarding the maps and the need of changes. I do want to take an opportunity to just thank Commissioner Reynolds for mentioning the important role that case workers and really digital navigators will play in bridging the digital divide. As basic as just understanding how to use the Internet is, it remains a major problem in a lot of underserved communities.

And having these individuals out in the community will be essential to ensuring that the broadband that we build is actually utilized by those that need it most. Thank you.

Good morning, Madam Chair, Members. Yolanda Benson, representing US Telecom: The Broadband Association, representing facility based wireline broadband providers in California. We are concerned and aligning our comments with some that you made, Madam Chair, on the timelines.

As you know, AB 2749 authored by Assemblywoman Quirk-Silva, would have provided additional timelines to make sure that that money was spent and was getting out. We are very concerned with that as providers that are ready to go and we're ready to build. Other states are already building. They're already building and have shoveled to the ground. California should be in that same category of being first. Thank you.

Morning, Madam Chair. Ignacio Hernandez, on behalf of TURN and also on behalf of CWA D9, I have two separate comments, but I'll make them quick. On behalf of TURN, you've already received our letter. We are very critical of the maps as they've been drawn up now and the methodology. We do have recommendations as far as ways to fix the maps in a way that will serve the community better. And we think that it should be a combination of identifying unserved and disadvantaged communities.

We think it can be done in a timely fashion, that we can continue with the timeline to get the money out as quickly as possible and available to be helpful with that. On behalf of CWA D9, Communication Workers of America, a couple of comments. One is appreciate the comments earlier on the BEAD program, and we're already in discussions with the Commission and others to ensure that there are high labor standards for those jobs.

We've also created a database now of workers referral service for workers because we're going to need a lot of workers to get out there and do these projects to make sure that they happen. So that's publicly available now. We'll put out the information. We're finding workers who have already worked in broadband and are available to start now on any of these projects. So thank you for that. We're going to continue our conversations with this Committee, the Commission, and with agencies state and federal. Thank you.

Good morning, Madam Chair and Members. My name is Kami Peer with Common Sense Media. Would like to strongly support the comments made by the California Community Foundation and the Rural County Representatives of California, as made perfectly clear today that these maps need clarification and need revision if we are to connect the California communities that need broadband access the most. We are happy to be a part of this process and are glad to have been a part of the effective feedback and dialogue with the CPUC.

We'd like to recognize their efforts in this area, and while there may be work ahead, we'd like to recognize that we're ready to work together. So the CPUC, thank you so much for your efforts and looking forward to future work. Thank you.

Madam Chair and Members, Amanda Gualderama with the California Cable and Telecommunications Association. We appreciate the opportunity to speak as a partner in the goal of securing broadband for all Californians.

We understand the concerns regarding the implementation of the Last-Mile Broadband Program and look forward to being engaged as a partner efficiently, swiftly, and sustainably building last-mile broadband infrastructure. Regarding the priority area map, as it stands, the FFA funds would be diverted toward areas that already have high speed Internet available. Currently, the priority area map includes over 1.5 million already served locations just by the three largest cable broadband providers in the state.

We understand that there is intent to update or fix this map, but the shortening timeline is concerning, especially considering that the permitting process for these projects can take up to six months.

Our members have been actively engaged in other states and have seen which programs have deployed broadband infrastructure funding quickly and effectively by focusing on connecting unserved households and businesses, and in a manner that requires matching private sector funds to expand the reach of public investment and increasing funding available for adoption efforts, including securing devices digital navigators to improve digital literacy and assisting individuals in subscribing to affordable Internet service options.

CCTA and our Members look forward to working with the Legislature and the CPUC in closing the digital divide. Thank you.

Good morning. My name is Ken Garnett. I represent an Internet service provider in the area here in California. I'd like to take a moment to thank the Committee and especially Assemblyman Patterson's comments about the need for technology neutrality, as well as yours, Chairwoman. That is very critical in order to get broadband to the broadest scope of people because of the cost, we do both fiber and broadband, and the fixed wireless technology has just exploded through the roof in terms of its capabilities.

10 years ago, yeah, fiber was all you had if you wanted to have gigabit speed. But today, you can get gigabit speed with fixed wireless easily. In fact, we're deploying equipment right now that can get up to 400 megabits per second, symmetric at three or four miles. So that easily meets the requirements. And then lastly, my reaction to Ms. Reynolds on the interpretation of the federal rules, that is, I believe, a stretch. If you look at the rules, it's not an edict for wireline.

It's a guideline or a recommendation. So I think the Commission could rethink that, and if necessary, the Legislature could indicate that they should rethink that. And that's my comment. Thank you.

Thank you very much. And thank you again to all the members who have participated in the hearing today and the members of public who watch virtually are in this room. I want to thank the representatives from the CPUC, President Alice Reynolds and Director Rob Osborn.

And I want to thank our additional witnesses, Shayna Englin and Tracy Rhine. I think we all really got a lot out of it. Some of it was understanding, some of it was process. Some of it, hopefully, is a way to exercise our oversight duties moving forward, because it's imperative that we get it right and we get the funding out the door.

I think the members of this Committee have made the perspectives clear on how to proceed, and I expect the CPUC will take all of that into consideration as they move forward. And with that, I'm about to adjourn. But it is my 50th birthday, so what a way to kick off my 50th birthday. And with that, the meeting is adjourned.