Revised California state budget proposes $7 billion investment over 3 years to enhance advanced telecom access and affordability

A revised budget for the State of California’s fiscal year beginning July 1 calls for spending $7 billion over three years to enhance advanced telecom access and affordability. According to a budget summary issued today, slightly more than half of state residents have access to infrastructure providing fiber level service. “Service at speeds below 100 Mbps is not enough for households who are juggling the demands of distance learning, telework, and accessing health care on-line,” the summary states. “These numbers are an indication of lack of access, lack of quality infrastructure, and lack of affordability.”

The budget would also appropriate state funds to supplement federal American Rescue Act funds to construct a statewide transmission network. “The statewide network will incentivize providers to expand service to unserved and underserved areas by substantially reducing their upfront infrastructure costs, creating new opportunities for municipal fiber networks, and promoting affordability for consumers,” the summary states. “This essential backbone infrastructure is a foundational step towards the entire state having access to broadband. Moreover, the generational investment will create tens of thousands of quality jobs to help the state’s economy recover from the pandemic.”

The proposed budget would also establish a $500 million Loan Loss Reserve Account to help local governments, tribes and non-profits secure private financing for fiber infrastructure. “These last-mile networks require large upfront investments but the return to customers, communities, and California is significant,” the summary notes. The budget also proposes to supplement an existing high-cost area subsidy program managed by the state public utility commission with $500 million in federal American Rescue Act funds.

The state Legislature must approve the proposed budget by June 15. Separately, lawmakers are considering submitting a bond measure (AB 34) to state voters that would raise $10 billion for grants to local governmental entities and Indian tribes for advanced telecommunications infrastructure and services.