California is racing forward in deploying broadband internet to unserved and underserved communities as it implements an unprecedented level of state and federal funding. Yet an escalating budget crisis in Sacramento is slowing the momentum—and California will need much more money to accomplish the governor’s pledge to deliver broadband for all.
To address the yawning digital divide, the Legislature and the Newsom administration reached a deal in 2021 to put $6 billion into a statewide broadband infrastructure plan. Subsequent investments have bumped that funding pot to $7.6 billion. The state is also plugging in nearly $5 billion in federal funding through COVID-19 economic stimulus grants and infrastructure investments.
Gov. Gavin Newsom is proposing another $1.5 billion to complete 10,000 miles of fiber lines known as the middle-mile network. He plans to cut $250 million in previous spending on “last-mile” connections to households and communities, while delaying $100 million in infrastructure grants for that segment.
Newsom’s proposed investment, however, is facing fiscal headwinds. The Legislative Analyst’s Office (LAO) is forecasting a $73 billion budget deficit, far greater than the $38 billion shortfall assumed in the governor’s spending plan. LAO is advising lawmakers to reject the additional $1.5 billion, reasoning that the Legislature needs more details on the proposal to maintain its oversight of the spending and that alternative funding sources may be available.
Advocacy groups for rural and disadvantaged communities are pushing back and pressing budget committees to maintain that funding, despite the turbulent financial situation. Tracy Rhine, senior policy advocate at Rural County Representatives of California (RCRC) told lawmakers at an Assembly budget subcommittee hearing last week that the middle-mile funding would “ensure that we're able to leverage all this other money that we've put into for the last-mile funding.”
Lawmakers, meanwhile, urged state agencies to come up with creative solutions for stretching the existing dollars as far as possible to connect more communities.
“Do you think that there is any way that we will deliver on the promise of broadband for all?” Fresno Republican Assemblymember Jim Patterson asked state officials. “Because it sounds like there will be broadband for some, but not broadband for all.”
Rachel Peterson, CPUCThe California Public Utilities Commission (CPUC) projects the total cost for connecting every Californian to broadband will ultimately exceed $9 billion. It estimates that nearly one million households lack adequate broadband speeds or have no access at all. CPUC Executive Director Rachel Peterson recognized the state has far to go in meeting its goal.
“We have a historic investment now and we need to continue that commitment and bring more dollars to the table,” she responded.
LAO analyst Brian Metzker cautioned Patterson that it is too early to know if the state will deliver on its promise. He called it critical for the Legislature to maintain oversight of the implementation of the state and federal investments.
“There are still a lot of unknowns and information that needs to be gathered to be able to make that determination,” said Metzker. “That's part of the Legislature's role—to get that information and to use it to make these decisions.”
Asm. Avelino Valencia of Anaheim, who chairs the Budget Subcommittee on Accountability and Oversight, agreed.
“We cannot wait until the end of this historic investment to determine if we got it right,” said Valencia, who asserted that ongoing, rigorous oversight is needed to ensure the state is on track to meet its goals “and to make course corrections if necessary.
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Patterson, who has engaged in broadband issues throughout his 12-year tenure in the Legislature, also pressed for a guarantee that rural communities would not be left behind if the state runs out of broadband money.
“My district is the heart and soul of agriculture in California,” he said. “[Broadband] will be absolutely essential.”
Peterson assured him that at least half the money would support rural broadband.
“Rural communities are just as prioritized as any other community,” she responded. “Under the programs that we have today … there is equitable attention being paid to rural communities just as much as to urban communities.”
Tracy Rhine at RCRC, however, complained that CPUC and the California Department of Technology haven't proactively engaged with rural communities on middle-mile plans.
“Instead of collaborating with local governments and community organizations on what is needed in their communities, we're being notified after the fact that middle-mile has changed,” she said.
While the process has been challenging, Rhine acknowledged the “heavy lift” with implementing the massive investment and she appreciated recent progress with improving the communication flow with communities.
Asm. Jim Wood, who represents a large, remote and digitally disconnected area of California’s northern coast, admitted that not every community “is as sophisticated as L.A. County” when it comes to deploying newer technologies like broadband and pressed for maximizing technical assistance for residents.
He also recognized the benefits of connecting farms to the internet, enabling growers to adopt precision irrigation tools, for example.
Wood has sat in on a series of advisory committee hearings for broadband over the last two years. While he has had issues with certain aspects of the rollout, he was impressed with the overall progress, particularly with the level of coordination between agencies “that don’t work well together typically.”
“This is a very complicated project with multiple funding sources and a huge number of stakeholders,” said Wood. “The expectation that we get this perfect out of the gate is pretty tough. There has been a fair amount of course correction throughout the process.”
He pointed out that the state is facing a tight deadline to spend any federal grants left over from the pandemic relief package by 2026 and wondered if delays to state spending would affect the federal funding. Metzker believed that is unlikely, which helped to shore up Wood’s optimism.
“With the fact that the networks and the timelines have continued to evolve, I have confidence that this will get done,” said Wood.
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