Assembly Standing Committee on Communications and Conveyance

Hello. We're going to start the Committee meeting in a few minutes. We're going to start the Committee meeting in a few minutes. So if you could take your seats, that would be helpful. Thank you.

Okay.

Thank you everyone who is joining. Who are. Thank you, everyone who is joining us for today's Communications and Conveyance Committee hearing on the state of broadband affordability. My name is Tasha Boerner and I chair the Committee on Communications and Conveyance. Joining me at the diocese is our vice chair, Leticia Castillo.

And we're gonna be joined by a few other Members as they can come in, as well as my. Emilio Perez, the Chief Consultant for the Committee, and Daniel Balloon Balin.

You'd think after four years, I figured out Balin, the Republican policy consultant who it's always my goal to make laugh one time and I already did it before the Committee started. So 2026 goals are achieved. And joining us today is also Assemblymember Rogers.

Before we begin the presentation, I'd like to take care of some logistical housekeeping as we proceed with the witnesses and public comment. I want to make sure that everyone understands the Assembly has rules to ensure we maintain order and run an efficient and fair hearing.

We apply these rules consistently to all people who participate in our proceedings, regardless of the viewpoints they express. We seek to protect the rights of all who participate in the legislative process so that we can have effective deliberation and decisions on critical issues facing California.

You can exit the hearing room once you're done testifying or return to your seat. Now, let's cover the ground rules for appropriate conduct. The Assembly has experienced a number of disruptions to Committee and floor proceedings in the last few years.

As you came into the hearing room today, the sergeants directed your attention to the rules for public attendance and participation which were posted on the door in order to facilitate the goal of hearing as much from the public. Within the limited limits of our time. We will not permit or conduct.

We will not permit conduct that disrupts, disturbs or otherwise impedes the orderly conduct of legislative proceedings. We will not accept disruptive behavior or behavior that incites or threatens violence. The rules for today's hearings include no talking or loud noises from the audience.

Public comment may be provided only at the designated time and place as permitted by the Chair, me. Public comment must be related what must relate to the subject being discussed today. No engaging in conduct that disrupts, disturbs or otherwise impedes the orderly conduct of this hearing.

Please be aware that violations of these rules may subject you to removal or other enforcement actions and thank you all for your cooperation on the housekeeping items. Now we can transition to the substantive substantive part of today's informational hearing on the state of broadband affordability.

The rising cost of living and paying for basic goods and services like groceries, utilities and housing continues to be a top concern for Californian households. Accordingly, this Committee in recent years has maintained a particular focus on addressing the cost of communication services for Californians, with a particular focus on broadband Internet service.

Today's hearing will be an opportunity to focus specifically on the affordability of broadband services. During the hearing, we will hear from two separate panels to discuss industry and consumer perspectives on broadband affordability. The outcomes for Members I'm hoping to develop.

A better understanding is what's happening in the broadband market as it relates to prices and where some Californians may be struggling to afford service. From my experience as chair, I've heard firsthand from committees, communities that are struggling to afford even basic home Internet service. Their price sensitivity.

Price sensitivity prevents their full participation in education, health care and employment, which is increasing increasingly moved online. With the end of the Affordable Connectivity Program, the ACP, which I was in full support of, we are facing a scenario with limited federal support.

Additionally, the Trump Administration has taken a defensive approach to state regulation of broadband services by vowing to withhold billions of dollars of broadband funding from states like California. You might recall that last year I introduced AB353, which would have required ISPs in California to provide affordable home Internet as a condition of doing business in California.

Unfortunately, because of new policies coming directly from the Trump Administration in reaction to bills like mine, we had to make the difficult decision to hold that bill.

Nonetheless, I remain committed to continue working with my colleagues on this in on this Committee and stakeholders to explore what other options for policies to support broadband affordability we have and we should implement. I look forward to hearing from our panelists today and the public comment at the end of this hearing.

With that said, I'd like to turn over the Vice Chair for any introductory comments. We're now joined by Assemblymember Caloza and we can open it up for any other Assemblymembers after the Vice Chair for comments. No. Any other comments, Caloza, Rogers? Nope, we're good. Okay, thank you, Members.

At this point, I'd like to invite up our first panelists. There we go. We'll start with panel one, Industry Perspectives on Broadband Affordability. We have two panelists joining us. We have Lynn Fansby? Follansbee? Follansbee from USTelecom and Jeremy Crandall from CT.

The presenter supplemental material will be available on our website and were provided to Member staff in advance. You may begin.

Thank you, Chairwoman Boerner and other distinguished Members of the Committee. Thank you for the opportunity to testify today.

As the Chair said, my name is Lynn Follansbee and I'm Vice President of Strategic Initiatives and Partnerships for US Telecom, which is a national trade association representing network providers, technology innovators and suppliers committed to connecting the world through the power of broadband.

Our diverse membership includes a range of the largest and smallest local regional providers throughout the urban and rural communities of California. As a collection of the leading broadband providers across the country, USTelecom members are experts in the area of broadband deployment and therefore we have a deep understanding of business practices and trends in the industry.

As we are here today to talk about affordability, how much broadband actually costs consumers and and the trend in pricing is an important piece of that puzzle. Fortunately, we have been publishing an annual report on pricing trends since 2020 called the Broadband Pricing Index, and I would like to share some of that data here today.

The 2025 Broadband Pricing Index looked at data from March 2024 to March 2025, and during this time frame, overall inflation rose 2.4%. But broadband prices moved in the opposite direction. Real prices for the most popular broadband plans, Those delivering between 100 and 940Mbps, fell 8.7% in just one year. Even gigabit broadband prices declined 6.2% in real terms.

That distinction matters greatly in California, where affordability pressures are among the highest in the nation and where broadband access is essential for mobility, economic participation, and public safety. Broadband also stands out when compared to other household costs overseen or affected by state policy.

Over the same one year period, car insurance rose more than 7%, rent increased 4%, food prices nearly 3%. Broadband, by contrast, got cheaper, making it one of the few essential services providing real relief to California households. This long term trend reinforces this point. Over the past decade, overall consumer prices rose nearly 36%.

But during that same period, broadband prices for the most widely chosen service tiers fell by 43% in nominal terms and more than 63% when adjusted for inflation. While most essential services became more expensive, broadband became dramatically more affordable. At the same time, Californians are receiving far more capability for what they pay.

Since 2015, average broadband download speeds have doubled and upload speeds have increased more than 80%. When falling prices are combined with those speed gains, the real price per megabit has dropped more than 80% for popular broadband services. For a Committee charged with the communications infrastructure. This is a critical result.

The state the service provider is not just cheaper, but the networks they are provided on are significantly more capable and resilient. Gigabit service underscores the same pattern. Since 2017, gigabit prices have declined 22.5% nominally and nearly 47% in real terms, even as overall consumer prices went up more than 30%.

Today, more than one in four households subscribes to gigabit service, reflecting growing affordability and demand for high capacity connectivity.

On Monday, the Benton Foundation put out its analysis of our report which says the trend is that broadband prices are actually going up because of the addition of the faster service plans such as the 2 gig speed tier in the last year. Their premise is that is that the addition of those plans mean our analysis is inaccurate.

Our study annually tracked and thoughtfully considers what the speed tiers that the households are actually buying. To include outlier plans that are far and away above the needs of the average household is like comparing apples and oranges with continued innovation.

We will always be chasing higher and higher speeds and at some point the two gig speed plans will become the norm. But that's not where we are today. In fact, Benton acknowledges that those plans are only 16% of the marketplace with the implementation of all the COVID era infrastructure programs.

In the BEAD program, ideally all consumers will have 100 over 20 which not only supports voice but provides efficient bandwidths for all types of services, including notorious bandwidth hogs such as streaming and gaming.

So if the focus is on affordability for the current day consumers, our focus should be on those plans that consumers want and need, which is what's reflected in our study. So what explains these outcomes? It's pretty simple. Competition and sustained infrastructure investment.

In 2024 alone, broadband providers invested nearly 90 billion nationwide for network upgrades, fiber deployment and capac expansion. That investment not only reflects broadband providers determination to help achieve the national objective of affordable, reliable, high speed connectivity for all, but along with competition across multiple technologies, it's driving faster speeds, lower prices and more choices for consumers.

It is true however that whether the whether the rates are urban or rural, Californians do pay higher rates than other states. As the PAO states in its recent report, compared to subscribers in Idaho, Californians paid about 47% more for the over over 100 and over 500 tiers and 23% more for the fastest tiers.

The reason this is true has a lot to do with how much it costs to build, deploy and operate networks.

In California, costs are considerably higher due to factors, some of which include taxes, permitting inefficiency, the high rates of copper theft and vandalism in the state, and COLA requirements that require providers to maintain outdated copper networks, which are not only expensive to operate but are also environmentally inefficient.

USTelecom members are forced to spend over a billion dollars every year maintaining outdated copper technology in California alone. The PAO report also quite correctly points out that DSL plans cost more than fiber plants. Why? Because DSL is an outdated technology that most providers are attempting to move on from.

Regulations that discourage investment in modern technologies thwart efforts to provide consumers with not only the best service but also the most cost effective. In the competitive marketplace in which they operate, providers have every incentive to gain and retain customers by making their services as inexpensive and as possible for those consumers.

They do this by being diligent about the cost effectiveness of their builds and by protecting their infrastructure assets and utilizing the most advanced technologies to improve customer experience. But costs are just simply higher in California.

To help combat this problem, USTelecom members across California offer low cost plans with speeds up to 100 megabits, and many are leading other efforts to address affordability challenges and advance digital equity. As California debates broadband affordability, the evidence shows that policies supporting investment and competitive, competitive markets deliver real results.

Consumers are benefiting not just through lower bills, but through better performance, greater reliability and broader access to advanced services. Broadband today is one of the rare essential services that consistently delivers more value for less money, even in high cost states like California.

So as you continue your work on communications policy, the data suggests a straightforward takeaway build on what's working preserve incentives for investment, relieve providers of burdens and regulations that only serve to increase costs and allow competition to continue delivering results for California consumers.

Thank you for holding this informational hearing today and for the opportunity to share some thoughts with you. USTelecom and our members stand ready to work with the Committee and the State of California to connect all communities and once and for all, close the digital divide.

Thank you. And I want to recognize Assemblymember Rubio has joined us and I accidentally demoted Assemblymember Hoover. So our Vice Chair, our real Vice Chair has joined us. Thank you, Leticia, for joining in as a temporary Vice Chair. And with that I'll go ahead and move on to the Speaker.

Good afternoon, excuse me, My name is Jeremy Crandall. I'm here today on behalf of CTIA. We are the Wireless Industry Trade Association.

I do want to start at the top in saying thank you for including us in this important conversation about affordability I think that we can all agree that it is a critically important piece of the overall puzzle when it comes to ensuring universal access to broadband connectivity.

As we dive into this topic, I do think it's important and a lot of what I'm going to touch on is similar to what Lyn shared to stay focused on the data and specifically the cost trends that exist both globally outside of telecom telecommunications, but also specifically to wireless for consumers here in California.

So I am going to talk a little bit about prices to begin and try not to repeat some of the data points that Lynn shared.

But I do think it's important that we focus on the fact that at a time when the cost of nearly everything that California businesses and residents are paying for is going up, specific to wireless, prices continue to go down. Lynn shared some of these. I'm going to share some other data points.

If you look at the last 10 year snapshot of various consumer service rates between 2012 and 2022, electricity in California is up 69% electricity 92%. Now if you look at nationally over the last five years, our data says gas prices are up 46%, food 27%. Now let's focus just on wireless.

That same year 10 same 10 year price analysis shows that wireless is down 44%. Now let's look at just the last five years when you adjust for inflation, wireless is down 24%, the cost of a smartphone 70%. And if you go back just 18 months to September of 2024, wireless is down 5%, cost of a smartphone 17%.

Now much of this data comes directly from the U.S. Bureau of Labor Statistics, which has emphasized that wireless has weathered inflation that we all know began during COVID and continues to this day, far better than the cost of other consumer essentials like gasoline and groceries.

And as an industry, I have to say we are proud of what can be labeled an affordability success story. But this didn't happen by accident and it doesn't happen in a vacuum. And it is a result of several driving factors, some of which Lynn already touched on.

Again, specific to wireless, there is fierce competition among our members that drives down prices for every consumer. There is and there has to be constant innovation. Again, specific to wireless, I'm talking about the introduction of fixed wireless access for home Internet options and I'm going to expand upon that in a moment.

And then number three, extensive capital investment. Again, just speaking about the wireless industry, 29 billion in 2024 and approximately 220 billion since 2018. I also think it's really important to keep in mind these data points do not exist in a vacuum. The wireless environment is not a static environment.

If you look at the growth in data usage that we all use on our wireless devices every single year, the last year that we have data, 132 trillion megabytes of data go back one year. Before that it was 100. And if you keep looking back and back, the graph keeps getting lower and lower.

We can guarantee that that graph is going to continue to grow into the future. So let's combine all those elements that I just talked about. Demand for more devices and stronger connectivity is higher than ever. Wireless usage higher than ever will continue to go up. And private capital spending is at record levels.

Through all of that, prices for wireless continue to fall 40% over 10 years, 5% over those 18 months. Recent 18 months. Now, directly tied to this conversation, and I just briefly talked about it, is the competitive broadband option that our members in the wireless industry offer to consumers here in California.

That's fixed wireless access that you're probably familiar with. It's offering consumers in California a choice of more choice for their home. Broad broadband service right now at affordable rates and at competitive service value as well, including in those hardest to reach communities that I know that we are all familiar with that struggle the most with connectivity.

I want to share a little bit more, though, about exactly what I'm talking about when we talk about fixed wireless and what it's doing for those communities. There was an FCC report in 2024.

It found that fixed wireless had closed the digital divide for 3 million households and also said that it created actual broadband options, more choice for one quarter of rural households. And that additional choice is also going to have a direct impact on prices. So let's bring this back to consumers.

That's what we are here talking about, prices and affordability. The Wall Street Journal found that this type of competition was with other providers, with cable providers, led to a 3% reduction in broadband prices as a whole.

And then finally, if I haven't thrown enough numbers at you, the pricing competition that we're talking about is estimated to save approximately $8 billion in the coming years for consumers. So without a doubt, again, I want to emphasize we recognize why this conversation about affordability is so important here in California and across the country.

But we are at a moment when other industries are struggling to meet this affordability challenge, and wireless is standing apart from that. Wireless providers are delivering more value every single year due to what is a fiercely competitive marketplace.

And I want to emphasize also the policies that foster that competitive market marketplace and they're working exactly as they should. But I also want to urge caution in in this conversation about pursuing policies that could take us in the in the wrong direction.

As this Committee knows, there does continue to be a persistent desire to use existing surcharge mechanisms that are in place here in California to ultimately subsidize broadband access.

Of course, while well intentioned, the fact does remain that specific mandates and fees on wireless services, both directly but also very importantly disproportionately impact wireless consumers, especially in including low income consumers and families that we're talking about. And I'll use a specific number in terms of this conversation about surcharges.

The flat rate surcharge that was put in place in 2023 led to a 300% increase in what wireless consumers pay, $21 for an individual consumer, $84 for a family of four. And we would argue that simply, you know, is moving California in the wrong direction when it comes to affordability. So I'll stop there.

I just want to close with saying very much thank you for including the wireless industry in this conversation about affordability. We are very proud of our efforts to deliver real value for your constituents while also working to continue to improve connectivity in all communities. So, so thank you very much.

Thank you. And before I begin with my litany of questions, I'll open it up to my Committee Members. Assemblymembers [inaudible] has joined us. Thank you so much. Beautiful tie. And so does anybody have any questions before I begin? Assemblymember Rogers.

Yeah, thank you so much Lynn. You mentioned specifically that one of the comparisons to California that was impacting the differential and how other states are seeing the cost for capital in particular was some of our regulations that are in place. Can you give me some examples of what you're talking about?

Well, one of the things I mentioned that was specific to the, you know, this is the wireline community, the tell old telephone companies is the Kohler obligations for the companies who have been here for forever and they are stuck with maintaining copper networks and trying to build fiber at the same time.

So they're running two networks because of the Kohler obligation that they have. And there's significant competition across the state. I mean I think the state's nearly 99% covered. So we think that policies and we know there were some opportunities last year to try to move a piece of legislation.

I know the CPUC has a proceeding to figure out how to relieve the Kohler obligation. And it's really quite, I think competitively necessary and also would significantly, you know, free up capital for our Members to be able to further deploy fiber and more advanced technologies.

And there are a lot of areas, like I said, that have a lot of competition.

So if you have three or four different types of providers, whether it's the fixed wireless Jeremy was talking about or a fiber provider or the cable companies and wireless, other types of wireless services, and even satellite now, why are we still making one type of company hold on to a Kohler obligation that costs.