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As State Budget Emerges, So Does Broadband Bill

California still doesn’t have a complete 2021-2022 fiscal year state budget. But Gov. Gavin Newsom made much of it official Monday by signing a package of legislation – and also reached accord with lawmakers on a broadband budget trailer bill.

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Gov. Gavin Newsom signed a package of budget bills late Monday that his office said “reflects the majority” of the $262 billion 2021-22 state budget agreement. And absent a full, enacted 2021-2022 fiscal year budget document, officials made notable progress on another issue that’s foundational to much of IT and innovation.

Also Monday, Newsom and statehouse leaders announced agreement on a broadband trailer bill, Assembly Bill/Senate Bill 156, which they said will expand the state’s broadband fiber infrastructure and increase Internet connectivity for families and businesses.

“This legislation will yield vital, broadened access for California families by prioritizing the unserved and underserved areas, facilities, households and businesses that remain disconnected in the digital era,” the officials said. The bill heads next to the state Senate Committee on Budget and Fiscal Review. Some budget details continue to be negotiated, and Techwire will have ongoing coverage of the emerging document. Among the takeaways:

  • The legislation provides $3.25 billion to “target that middle mile and build the broadband lines.” It also delivers $2 billion for “last-mile” infrastructure linking homes and businesses to the local network — $1 billion each for rural and urban communities, per the news release. The pact leans on the state’s Joint Exercise of Powers Act authorizing “joint power entities created under that act to issue mortgage revenue bonds and industrial development bonds” — specifically authorizing them to “issue revenue bonds for the deployment of broadband infrastructure by a public entity or nonprofit organization.” It also authorizes county boards of supervisors to acquire, build and operate “broadband Internet access service and any telecommunication services necessary” to get federal or state support for those same actions.
  • The bill puts into statute — formalizing in state law — the California Department of Technology’s Office of Broadband and Digital Literacy. It requires the office to lead “acquisition and management of contracts” to develop, build and operate “a statewide open-access middle-mile broadband network, as defined, to provide an opportunity for last-mile providers, anchor institutions and tribal entities to connect“ with the goal of facilitating high-speed broadband service. The bill formalizes CDT’s position of deputy director for Broadband and Digital Literacy. It also creates a broadband advisory committee to monitor the construction and establishment of the broadband network. The bill requires the office to work with a California nonprofit as a third-party administrator on creation of this broadband network, and to report annually to the Legislature’s two budget committees. It also requires the California Public Utilities Commission (CPUC), with the third-party administrator selected, to “provide to the office the locations for the broadband network.”
  • The bill prescribes contracting requirements and authorizes the use of “job order contracting” to build the network — and requires the office to weigh adopting rules to “encourage or require Internet services providers that use the broadband network to participate in the state and federal lifeline programs.” It requires all state agencies to work together on expediting the network’s delivery and permitting. It declares that the network “serves a public purpose and would authorize the leasing of public properties” for less than fair market value “for purposes of the broadband network.” The bill exempts from the California Environmental Quality Act projects “consisting of linear broadband deployment in an existing right of way that meets certain requirements.”
  • This bill revises the California Advanced Services Fund (CASF) program — making the goal of the Broadband Infrastructure Grant Account, not the CASF, to approve funding for infrastructure projects that would create broadband access for at least 98 percent of state households. It requires that funds in the Broadband Public Housing Account be made available for grants and loans to low-income communities to pay for projects connecting to networks offering free broadband to low-income residents. The bill requires the CPUC to use “state or federal infrastructure moneys deposited into the Federal Funding Account to implement a program to expeditiously connect unserved and underserved communities by applicable federal deadlines.” And it requires the commission to allocate the $2 billion appropriated to it to pay for last-mile infrastructure in the new state budget. The bill creates the Broadband Loan Loss Reserve Fund in the state Treasury, continuously appropriating money to that fund for the CPUC to “fund costs related to the financing of the deployment of broadband infrastructure by a local government agency or nonprofit.”
Theo Douglas is Assistant Managing Editor of Techwire.