Thank Laws Supported By AT&T and Comcast for California’s Broadband Monopoly Problem

If you, like a great many Californians, have shopped for high-speed broadband options (in excess of 100 mbps) and found that you always ended up with Comcast, it is because the state’s legislature has failed to promote broadband competition for more than ten years. That reality has resulted in the death of competitive access in many parts of the state with a disproportionate impact on low income residents and rural Californians. With the exception of last year’s S.B. 822 (the state’s net neutrality bill) and A.B. 1999 (legislation that made it legal for local governments to build their own ISPs), the big ISPs have gotten exactly what they want out of Sacramento—which is for the state to abandon its residents to broadband monopolies so they can charge monopoly rents.

Take, for example, the debate this year regarding an AT&T and Comcast bill being moved by Assembly Member Lorena Gonzalez (A.B. 1366). Very few lawmakers in the state’s legislature have willingly opposed this bill, which will hurt consumers. The legislation’s premise is in lockstep with the Trump Administration’s FCC agenda to abandon all means of using the law to promote competition policy. The bill maintains a restraint on state and local authority to promote broadband access competition that was originally instituted in 2012 after heavy lobbying by the major ISPs.

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Don’t Let California’s Legislature Extend Broadband Monopolies for Comcast and AT&T

Commissioner Maria Guzman Aceves, a California regulator from the California Public Utilities Commission (CPUC) pleaded with the Senate Utilities Committee earlier this month to block the bill in its most recent hearing (see video below). She cited the fact that millions of Californians face a monopoly market that lacks any semblance of competition. The Commissioner further stated that the lack of access and lack of investment in the broadband infrastructure of California carries serious risks to public safety, as these are essential means for communications during emergencies.

But, despite all of these facts and the realities on the ground, only three state Senators voted against the bill in committee— Sens. Hill, McGuire, and Wiener. The legislation is now heading for the Senate floor, when session resumes in a month.

Just How Bad is the High-Speed Market in California? Really Bad!

Thanks to help from the Institute for Local Self-Reliance, we have the latest data to show what the future holds if the state decides to do nothing—the outcome of passing A.B. 1366—broken down by Senate district. Literally every California Senate district is facing a monopoly broadband market in high-speed access—with the exception of San Francisco, which has enjoyed the advent of gigabit broadband competition. That is mostly thanks to one small regional ISP called Sonic Fiber, which was recently found to be the country’s fastest ISP.

Source: FCC Form 477 December 2017 v.2, FCC Population and Household Estimates 2017 

At the end of 2017, the most recent government data showed a vast majority of Californians did not have access to gigabit networks that can be delivered by fiber or another high-speed telecommunications standard, DOCSIS 3.1. 2018’s data is still being compiled by the government, but we know two things that have happened between 2018 and today, and would inform the data.

First, the cable industry has generally converted their systems across the board to DOCSIS 3.1, allowing them to sell broadband download speeds (not uploads) at the gigabit range. That means the percentage of Californians with no access to gigabit networks will drop, but the “one choice” monopoly percentage will grow for 2018—and not the green bar indicating at one competitor.

Second, large competitors are leaving the market, not entering it. AT&T, the only major national ISP in California that can rival Comcast, has abandoned its plans to build fiber to the home. and has started laying off workers that build those fiber networks. If the major national competitor to Comcast is not building infrastructure that will rival DOCSIS 3.1, it means they do not intend to compete with Comcast. Rather, what we have seen from AT&T is an intent to invest in their wireless products and promote (albeit falsely at times) 5G wireless access. Despite AT&T’s efforts to argue otherwise, wireless has never, nor ever will be, competitive with wireline services in the broadband market when it comes to capacity, reliability, and speeds. Choosing not to compete would normally prompt a regulatory and policy response. But if ISPs can strip the state regulator and local governments of their authority to promote competition, as envisioned under A.B. 1366, then they do not have to worry about any response, since the FCC also abandoned its authority in this area in 2017.

Our future does not have to look like this. Right now, each Californian has a chance not only to tell their state Senator to vote NO on A.B. 1366, but also to demand that lawmakers start doing their jobs and promote universal, competitive, and affordable access to 21^st century broadband infrastructure. It is long past time the California legislature realized it has been too deferential to the incumbent ISPs, and their constituents are suffering monopoly rents today due to their unwillingness to act.

Rather than renew a law crafted by AT&T and Comcast —and handed to a willing legislator in Assembly Member Lorena Gonzalez—it is about time they start looking at states that are skyrocketing past California when it comes to broadband access. In Utah, people have a dozen choices in gigabit fiber broadband. North Dakota now has a staggering 60 percent of its homes connected to fiber networks, despite being a very rural state. New York retained its authority and expert state regulator over broadband, and was going to literally kick out their cable company for failing to deliver to its residents—forcing the ISP to invest in the state and upgrade its facilities as part of its settlement. California leaders can also learn from the EU, which adopted a gigabit-for-all plan years ago, or the advanced Asian markets that long ago surpassed the United States. The point is, doing nothing and passing a law that makes doing nothing the mandate of the state only favors the incumbents. That is why they wrote the legislation. The only result of renewing this law, via A.B. 1366, is that a vast majority of Californians will remain stuck with Comcast as their only choice for a very long time.