Page 2-3 of the Executive Summary of the California Advanced Services Fund 2015 Annual Report
Through the CASF Program, the CPUC continues to make steady progress toward closing the digital divide in California. As of December 31, 2015, there have been 52 CASF infrastructure project grants awarded and 27 completed. Together, the 52 projects are expected to provide broadband access to 301,574 unserved and underserved households combined. The 27 completed projects and 3 partially completed projects offer broadband service in their respective areas with a household subscribership of 3,923. The regional Consortia continue to advance initiatives aimed at increasing broadband deployment, access and adoption in the geographic regions they represent. Additionally, there were 86 public housing infrastructure grants approved affecting 5,678 units, and 19 adoption projects approved to provide digital literacy training to public housing locations with 3,152 residents.
The statutory goal of the program is to award funding by December 31, 2015 for projects that will provide broadband access to no less than 98% of California households. The CPUC considers an area served if broadband is available at speeds of 6 Mbps downstream and 1.5 Mbps upstream, or greater. Based on this definition of “served” availability, Table 1, below, shows that the 98 percent broadband access goal has been met for households located in urban areas, while only an estimated 43 percent of households in rural areas have access to broadband at served speeds. Statewide, an estimated 95 percent of households have access to wireline broadband at served speeds. Regarding mobile broadband, the majority of households in all areas of California do not have mobile services available at served speeds. Statewide, only an estimated 16 percent of households have access to mobile broadband at served speeds.
The Internet For All Now Act (AB 1665) was introduced in the California State Legislature on February 17, 2017 by Assemblymember Eduardo Garcia with joint and co-authorship from Assemblymembers Cecilia Aguiar-Curry, Chris Holden, Kevin McCarty, David Chiu, Susan Eggman, Kevin Mullin, Anna Caballero, Mike Gipson, Reginald Jones-Sawyer, Jose Medina, Eloise Gómez Reyes, Blanca Rubio, and Jim Wood. AB 1665 authorizes additional collection of funds into the California Advanced Services Fund, to provide high-speed Internet access to all Californians.
The California Emerging Technology Fund is making the following recommendations for AB 1665:
- Authorizing $50 million per year for 10 years for total additional funding of $500 million into CASF.
- Maintaining funding priorities for last-mile, unserved households to achieve the Legislature’s goal of 98% deployment and promise to rural California.
- Recognizing the need for cost-effective, middle-mile with “first right of opportunity” for incumbent broadband providers to help meet the goal.
- Transitioning CASF support to higher speeds (25/3 Mbps) after the 98% goal is met in order to remain competitive and align CASF with FCC new speed goals.
- Ensuring that $100 million is used to help those on the wrong side of the Digital Divide learn how to improve the quality of their lives through training and adoption.
- Allocating $10 million to the California Telehealth Network to leverage more than $21 million from the FCC Healthcare Connect Fund to get Californian’s fair share.
- Ensuring that the most disadvantaged residents living in publicly-subsidized housing will be online and able to participate in the Digital Economy to get out of poverty.
- Providing proven project management tools for the CPUC to enhance efficiency and effectiveness: project management; value engineering; grants management.
The California Emerging Technology Fund's rationale for the bill is as follows.
Social and Economic Justice for Californians in the Digital Age
Today, high-speed Internet (broadband) access is essential for homework, employment applications, job training, health services, and civic activities. Yet 16% of Californians do not have high-speed Internet at home and 14% connect to the Internet only through smartphones. Too many low-income, rural, and disabled Californians are disenfranchised from our Digital Economy because of cost and lack of access. (Source: 2016 Survey on Broadband Adoption in California, Field Research Corporation)
The California Legislature’s goal of 98% broadband deployment in 2017 has not been met for many rural communities. The California Public Utilities Commission (CPUC) reported that only 43% of rural households have access to reliable broadband service. (Source: California Advanced Services 2015 Annual Report)
The California Advanced Services Fund (CASF) was established in 2008 by the Legislature and CPUC to close the Digital Divide. CASF provides: grants and loans for deployment of broadband infrastructure in unserved and underserved areas; grants to regional consortia to advance broadband deployment, access, and adoption; and grants to public housing for access and/or adoption activities. Over the last 9 years, the Legislature has authorized a total of $315M into CASF by collecting a few cents per month on phone bills.
Only the Legislature Can Authorize Collection of More Funds into the California Advanced Services Fund
The Legislature established the California Advanced Services Fund (CASF) in 2008, and authorized $315 million to be collected over the past 7 years, from a small fee on phone bills, to support deployment of broadband into unserved and underserved areas to help close the Digital Divide. CASF has funded 57 projects and reached over 300,000 households. Nevertheless, CASF is out of money for infrastructure deployment with 14 pending projects. CASF has funded 54 projects to reach 304,555 HHs at an average CASF subsidy of $461 per HH and total average cost of $1,385 per HH. CASF is clearly cost-effective compared to the FCC Connect America Fund 2 average subsidy in California of $2,550 per HH. CASF is out of money for infrastructure deployment with 14 project applications pending and more in the pipeline. CASF is the only source of support for broadband unless the Legislature enacts a new fee or tax or does a General Fund budget allocation.