State Legislature passes historic, $6 billion broadband investment agreement

Securing funding for critical infrastructure, including broadband, was one of the League of California Cities’ top strategic priorities for 2021.

COVID-19 highlighted the persistent lack of broadband access facing many communities throughout California and the nation as a whole. In an effort to close the digital divide, the Legislature passed AB/SB 156, a slightly modified version of the Governor’s earlier broadband budget proposal, which he is expected to sign. 

At $6 billion ($5.2 billion from federal dollars), AB/SB 156 is the largest public broadband infrastructure investment in the country. Supported by extensive research, the bill prioritizes the construction of broadband networks in unserved areas, as well as those with lower speeds unconducive to education, commerce, and video conferencing. Specifically, AB/SB 156 provides:

• $2 billion for last-mile broadband infrastructure, which will increase connectivity and affordability for underserved and unserved rural and urban communities
• $3.25 billion for a statewide, open-access, middle-mile network, an essential first step that will make it easier for internet providers to provide faster, cheaper service throughout the state
• $750 million to establish a new loan loss reserve account to provide collateral (and better borrowing terms and terms) to local governments issuing bonds for municipal broadband deployment.
• Several important reforms to the California Advanced Services Fund (CASF) program to help make sure the funds are spent quickly and efficiently where needed most
• Important accountability and oversight provisions, including a nine-member council with broad representation

What does this mean for Cal Cities’ members?

Cities are now eligible under new CASF rules for eligibility to apply for funds to quickly deploy municipal networks. Cities can borrow up to 10 times (10X) the guaranteed amount in bond funds. The loan loss revenue account provides collateral to local governments issuing bonds for broadband to receive better rates and terms.

Securing funding for critical infrastructure, including broadband, was one of Cal Cities’ top strategic priorities for 2021. A move towards universal broadband access will transform the way schools, small businesses, healthcare organizations, and local governments provide their services. The bill, along with the additional financing sources they would leverage, would allow California to be a leader in digital access once again.