New California law reserves $3.25B for a state-run, open access network

California Governor Gavin Newsom signed a $6 billion broadband bill on Tuesday that, among other things, will fund construction of a state-owned fiber network.

The legislation includes $3.25 billion "to build, operate and maintain an open access, state-owned middle mile network," plus $2 billion for last-mile connections – for which tribal and local governments are eligible to receive funding; and $750 million for a loan loss reserve fund to help local governments and nonprofits finance broadband infrastructure.

The new law also creates a "broadband czar" at the California Department of Technology, and a broadband advisory committee to monitor the construction of the state broadband network, comprising "representatives from across state government and members appointed by the Legislature."

In a statement, Governor Newsom called the legislation "historic."

"It transcends politics, and it will be a legacy project that will benefit generations of rural and urban residents alike. 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," he said.

'Very little' for big ISPs

According to BroadbandNow, while California ranks 13th in the US for broadband access, that still leaves an estimated 1.3 million people without access to a 25Mbit/s connection, as well as 1.5 million residents with access to only one wired provider, and 889,000 others with no fixed-wired option at all. The state is primarily served by large cable and telecom companies, including AT&T, Frontier, Comcast, Charter and Cox.

What's notable about the $6 billion legislation is that California is prioritizing funding for local and municipal fiber builds – rather than funneling more money to large ISPs to finish closing the state's digital divide.

Indeed, according to Ernesto Falcon, senior legislative counsel at the Electronic Frontier Foundation (EFF) – one of the organizations advocating for this legislation – the broadband bill passed as a result of activists pushing back against cable lobbyists.

"The revolution here is the fact that the law does not rely on AT&T, Frontier Communications, Comcast, and Charter to solve the digital divide. Quite simply, the program makes very little of the total $6 billion budget available to these large private ISPs who have already received so much money and still failed to deliver a solution," wrote Falcon in a post about the legislation.

"This is an essential first step towards reaching near universal fiber access, because it was never ever going to happen through the large private ISPs who are tethered to fast profits and short-term investor expectations that prevent them from pursuing universal fiber access."

The provisions in the legislation related to the $3.25 billion state-owned fiber network include a requirement for the new Office of Broadband and Digital Literacy to encourage ISPs using the network to participate in state and federal lifeline affordability programs; as well as a declaration that the state broadband network serves a public purpose, thereby authorizing leasing for "less than fair market value."

Lest advocates worry that a state-run network – and therefore the promise of California's universal fiber broadband – could be offloaded with the current governor in the next election, the legislation also notes that "any state-owned assets constructed for the purposes of this bill shall not be sold to any other party for at least 20 years after the completion of construction."

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• Lawmakers ramp up attacks on muni broadband

— Nicole Ferraro, contributing editor and host of "The Divide" and "What's the Story?" Light Reading