August 1, 2018

Welcome

Agenda• Caltrans Update• FirstNet Update• Council Business• CASF• Closing the Digital Divide• Public Comment

AB 1549 Update

Caltrans

FirstNet

Patrick MallonAssistant Director

Governor’s Office of Emergency Services

Stephanie TomDeputy Director

Broadband and Digital LiteracyCalifornia Department of Technology

• Establish a baseline of information regarding broadband access for the 109 tribes

• Identify who the primary carriers are for each tribe

• Identify the tribes that have onsite tech support

• Creater 3-4 success stories to share best practices

• Shorten “time to community” from 2 months to 2 weeks

• Create smart phone recycle program to benefit community

• Identify and record 3 success stories from 2014 surplus program

• Review purpose and develop strategy for this Task Force

• To re-establish the charter of the California Broadband Council by conducting in depth review and assessment of the 7 Key Objectives

CBC Task Force Update

GIS MapsLong Term Goals Surplus EquipmentTribalLong Term Goals

CALIFORNIA ADVANCED SERVICES FUND

Michael Pierce, CPUC Communications DivisionBroadband Council / August 2, 2018

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CASF Overview

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• Public/Private Partnership• Provides the following four types of grants to bridge the

“digital divide”:• Infrastructure, Line Extension, and Revolving Loan

($575 Million)• Rural and Urban Regional Consortia ($25 million) • Adoption ($20 million)• Public housing ($25 million)

• Total authorized funding: $645 million• Total awarded thus far: approx. $260 million

AB 1665 Introduced Changes to CASF• Revised infrastructure grant goal:

To provide broadband access (infrastructure) to no less than 98% of households in each Consortia region• Leverage existing infrastructure and planned builds

• Added a line extension pilot program ($5 million) to the infrastructure grant account

• Added the adoption account• Focused consortia activities on assisting infrastructure

applicants in the project management or grant application process

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Served Status by Consortium Region

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Example of One of the 13 Consortia Below the New 98% Goal

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CASF Rulemaking to Modify / Create Rules Pursuant to AB 1665 – in 2 Phases

• CPUC adopted a rulemaking describing the scope of the rulemaking process on February 14, 2018

• Phase I - CPUC adopted Decision 18-06-032 on June 21, 2018 addressing implementation issues • New Adoption Account – Created rules,

application requirements and guidelines • Update / Changed rules to administer

• Public Housing Account – Updated existing guidelines, and clarified the challenge process

• Revolving Loan Account – Closed account to new applications

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Phase II CASF of Rulemaking

• Status of Phase II of proceeding • Conducted a workshop to gather input last week, July 25th

• Will adopt final order in November 2018

• Will adopt revised rules to implement the following three programs addressed in AB 1665• Modifying Infrastructure Account

• Eligibility• Funding Criteria• Middle Mile Issues

• Creating new line extension pilot program ($5 million) to provide subsidies to individual unserved households beyond the end point of an existing Internet service provider’s network

• Modifying Consortia Account

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Adoption Account - Phase I (1 of 2)

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• Provides $20 million for grants to increase publicly available or after-school broadband access and digital inclusion

• Selection criteria include preferences for communities with limited broadband adoption, including low income communities, senior communities, and communities facing socio economic barriers to broadband adoption.

• Eligible Applicants include local governments, senior centers, schools, public libraries, nonprofit organizations, and community-based organizations with programs to increase publicly available or after school broadband access and digital inclusion, such as digital literacy training programs.

• The adoption account shall not be used to subsidize the costs of providing broadband service to individual households.

• Application deadlines are August 31, 2018, January 1, 2019 and every January 1 and July 1 through July 1, 2022, or until the $20 million has been granted

Adoption Account - Phase I (2 of 2)

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• Eligible Projects• Digital inclusion projects may include digital literacy training programs

and public education to communities with limited broadband adoption, including low-income communities, senior communities, and communities facing socioeconomic barriers to broadband adoption, consistent with the adoption projects of the Public Housing Account.

• Broadband Access projects may include those that provide free broadband access in community training rooms or other public space, such as local government centers, senior centers, schools, public libraries, nonprofit organizations, and community-based organizations. The Commission may also fund community outreach, such as analysis, comparison of Internet plans within the community, and call centers that will increase broadband access and adoption.

• Baseline Broadband Adoption / Gap Analysis - Within a year (6/21/19) the CPUC will conduct a baseline broadband adoption analysis and adoption gap analysis

Public Housing Account - Phase I

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• Phase I changes included minor clarifications to the challenge process and proposed project description

• Provides grants dedicated to broadband access and adoption in publicly supported housing communities

• Eligible Applicants:• A publicly supported housing community means a publicly-subsidized

multifamily housing development wholly owned by either of the following two entities:• A public housing agency, or• An incorporated nonprofit organization that has received public

funding to subsidize the construction or maintenance of housing occupied by residents whose annual income qualifies as “low” or “very low” income according to federal poverty guidelines

• Currently accepting applications.

Infrastructure Grant Account – Phase II

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• Phase II will modify the infrastructure account in the following three areas: eligibility, funding criteria and middle mile projects

• Funds capital costs of broadband infrastructure projects in unserved areas • “Unserved area” — an area in which no facility-based broadband

provider offers broadband service at speeds of at least 6 mbps downstream and 1 mbps upstream.

• Currently accepting applications

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CA Interactive Broadband Map

• Helps policymakers and CPUC staff understand broadband deployment / availability throughout the state

• Supports CPUC staff decision making regarding CASF applications and grants

• Assists CASF applicants / consortia identify unserved areas in the state

www.http://www.broadbandmap.ca.gov/

Line Extension Account – Phase II

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• Provides $5 million for a pilot program within the infrastructure account to help households/property owners pay the costs of connecting to an existing facility-based broadband provider. • Line extensions extend a service provider’s broadband network

to a home that would not otherwise be connected to the broadband network.

• Intended for unserved households beyond the end point of an existing Internet service provider’s network.

• Eligible Applicants:• Individual households or property owners

• Submission and Timelines • TBD in phase II decision

Rural and Urban RegionalConsortia Grant Account – Phase II

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• AB 1665 reduced the scope of consortia activities to facilitating the deployment of broadband infrastructure by assisting infrastructure applicants in the project development or grant application process.

• An eligible consortium may include representatives of organizations, including, but not limited to:• Local and regional government, public safety, elementary and secondary

education, health care, libraries, postsecondary education, community-based organizations, tourism, parks and recreation, agricultural, business, workforce organizations, and air pollution control or air quality management districts

• Submission and Timelines • TBD for new consortia

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Q&A/Thank you!

Resources

CASF Website

o http://www.cpuc.ca.gov/casf/

CASF Annual Reports

http://www.cpuc.ca.gov/General.aspx?id=9226

Michael Pierce:

Michael.Pierce@CPUC.CA.gov (415) 703-2618

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UpdateClosing the Digital Divide -

A Historic and Economic Justification for Government Intervention

Hon. Lloyd Levine (ret.) Senior Policy Fellow, University California at Riverside School of Public Policy

& Matthew P.H. Taylor University of California at Riverside, Department of

Economics

Measuring the Digital Divide and its ImpactsHow Bad Is It?

Where, Who, Why?

Closing the Digital Divide: A Historic and Economic Justification for Government Intervention

2017 Statewide Survey Results

Digital Divide is Greatest for the Disadvantaged2017 Annual Survey

Percentage of Californians with Broadband at Home

70% of Households with Spanish-Speakers (38% by smart phone only – 30% not connected)

75% of People with Disabilities (15% by smart phone only – 25% not connected)

69% of Adults Age 65 or Older – Seniors (9% by smart phone only – 31% not connected)

67% of Non-High School Graduates (28% by smart phone only – 33% not connected)

2017 Statewide Survey Results

Broadband Adoption Tied to Income

48% of Households Earning Less Than $20,000 a Year (27% by smart phone only)

Digital Divide has Two Categories

Access vs Adoption

Access “Broadband Access” refers to the physical infrastructure

AdoptionAdoption is the process of a consumer signing up for broadband from an Internet service provider.

“Meaningful internet access” is a dynamic concept Addresses the functionality of the technology

Combines Internet service

Computing equipment Digital literacy skills

“Meaningful Internet Access”

Specifically, in order for a consumer to have “meaningful broadband access” they must have three things: A reliable broadband, internet connection

A computing device capable of providing sufficient functionality and computing power to support prevalent consumer applications at any given point in time.

The “digital literacy” skills necessary to utilize the programs and navigate the internet, sufficient for a consumer to utilize the use of technology to improve their quality of life.

“Meaningful Internet Access”

Why is this a matter of Public Policy?

(AKA: It’s not about cat videos on YouTube.)

Closing the Digital Divide:A Case for Government Intervention

THREE PRIMARY AREAS OF PUBLIC POLICY CONCERN

Education

Jobs/Employment

Access to Services

This includes access to both governmental entities, and quasi governmental entities like utility companies, and health care systems.

Impacts of the Digital Divide

HARDSHIPS DUE TO LACK OF BROADBAND

Individuals who lack broadband access, or who have access only via smartphone

See negative impacts on employment status.

They face hardships performing tasks such as creating a resumeusing the web to search for available positions, filling out online applications, contacting employers

Why is “Meaningful Internet Access” important? (Why a smartphone isn’t an acceptable substitute.)

“Meaningful Broadband Access”

Pew Research Center:79% of job seekers use the Internet to assist in the search.

Council of Economic Advisors: Individuals who use the internet find employment more quickly

Quantifying Economic Benefits of Closing the Digital Divide

Closing the Digital Divide:A Case for Government Intervention

Increase in Employment

STUDY:Does expanding access to broadband providers increase employment?

FINDINGS:In a study conducted between 1999 and 2006, causal evidence showed expanding access from zero broadband providers, to 1-3 providers, positively impacted employment growth and establishment growth in the US by 6%.

These impacts were higher for less densely populated areas and for industries more reliant on IT services in their business processes.

Increase in GDPSTUDY:A 2009 study assessed the relationship between GDP growth and the broadband penetration rate,

They measured it as the percentage of the population having a fixed broadband subscription, and used a cross-section of average growth rates and subscription rates for countries over the period 1980-2006.

FINDINGS:Increasing broadband penetration by 10% is correlated with a 1.21 percentage point increase in the average growth rate of developedcountry economies over that time period.

These impacts are higher for broadband than are their similar estimates on the impact of the penetration of narrowband internet and mobile technologies.

Increase in GDP

STUDY:A study that came out in 2016 estimated the impact of increased broadband penetration on GDP per capita for a panel of OECD countries over the period 1996-2012.

FINDINGS:A 1% increase in the broadband penetration rate led to short run (1 year) and long run (2-5 years) impacts on GDP per capita from between $391-$1,474 and $1,682-$4,192 over the time period (measured in 2005 US dollars), respectively.

Estimated Impact of CASF on CA GDP

Researchers Castaldo, Fiorini, and Maggi (2016) provide estimates of the impact of increases in broadband adoption on GDP per capita.

We used that data to generate estimates of recent efforts to expand broadband access in California.

2015 DataCalifornia Population – 39.1 MillionPer Capita California GDP - $63,388

Using the Castaldo, Fiorini, and Maggi calcualtions, a 1% increase in broadband adoption in California would lead to a short term increase of $475 to $1,789 in California’s GDP per capita.

Spending on Broadband Access

Estimated Impact of CASF on CA GDP

• According to the 2016 CASF Annual Report, $124.1 million had been spent providing access to 301,574 households over the lifetime of the program.

• CASF funds used to expand access to broadband affected 2.37% of the 12.6 million Californian households.

• That means the program spent $411.51 per household to provide broadband access.

• The per capita cost to all Californians was $3.17.

Benefits of Spending on Broadband AccessEstimated Impact of CASF on CA GDP

• If 42% of those who gained access adopted, it would mean a 1% increase in the broadband penetration rate.

• Using the Castaldo, Fiorini, and Maggi formula and the result of a low end estimate of a $475 increase in per capita GDP we see that:

• Government spending of $3.17 per capita on increased access yielded a benefit of $475 in increased per capita GDP.

• As one of the world’s largest economies, California’s GDP is comparable to those of the OECD countries analyzed by Castaldo, Fiorini, and Maggi (2016).

• In that study, Hungary had the lowest per capita GDP increase at an estimated $86.6.

• Thus, even for the countries seeing the smallest impacts from expanded broadband adoption the benefits to economic growth are of magnitudes higher than the costs associated with the CASF program.

Spending on Broadband Adoption

Estimated Impact of CASF on CA GDP

At the same time California was spending $124.1 million on increasing broadband access, the state spent a far, far smaller amount on efforts to increase adoption among those who already had access.

• $2.1 million was spent providing adoption grants that affected 5,678 units, ($374 per household)

• $0.6 million on training 3,152 residents in digital skills and literacy. ($177 per household).

• These programs reached 0.04% and 0.02% of Californian households, respectively.

Benefits of Spending on Broadband Adoption

Estimated Impact of CASF on CA GDP

• Scaling up the adoption program to reach 1% of California households would cost approximately $1.2 per capita

• Scaling up the digital skills and literacy program to reach 1% of California households would cost $0.62 per capita.

• While that assumes a 100% adoption rate, even if the rate were far, far lower, it would still be well under the lower bound estimate of $475 in increased per capita GDP.

Policy Recommendations& Strategies for Closing

the Digital Divide

Closing the Digital Divide:A Case for Government Intervention

Framework for Policy Interventions

Overarching Policy Goals

1) LEADERSHIP Policy Makers throughout need to take ownership of the issue and work within their

policy areas to close the digital divide. 2) Focus on Urban Adoption

Of the total Digital Divide, the Urban Divide is FIVE times greater than the rural Divide. While rural areas are important, less than 5% of the Divide is comprised of rural

HOUSEHOLDS, and those areas are already being targeted by CASF. 3) Accurately Measure the Rural Divide 4) Improve the Standard for Broadband Speed Under CASF

Both the FCC and the State of New York are looking at speeds significantly faster than the 6/1 called for in California.

In 2015 The FCC stated: “…having ‘advanced telecommunications capability’ requires access to actual download speeds of at least 25 Mbps and actual upload speeds of at least 3 Mbps (25 Mbps/3 Mbps” (Citation: FCC’s 2015 Broadband Progress Report – Feb 4, 2015)

BROADBAND IS AN ENABLING TECHNOLOGYBroadband is like electricity and the telephone before it, a utility that allows the users to

be more productive.

Specific Policy Recommendations

1) Invest public funds in deployment and adoption initiatives (including assistance with devices and digital literacy training)

2) Promulgate policies and change laws and regulations to promote sustainable deployment and adoption

3) Require significant public benefits as a condition of mergers and acquisitions

4) Have other branches of government and community anchor institutions include broadband adoption and digital literacy in the continuum of care and services they can provide.

Specific Policy Recommendations

Invest public funds in deployment and adoption initiatives (including assistance with devices and digital

literacy training).

• Work with broadband providers to facilitate deployment in rural areas.

• Partner with Broadband providers, CBOs, CETF and others to fund and implement adoption programs.

• Work with CBOs, business, and local governmental entities to create a supply of quality used computing devices.

• Work with community colleges, workforce development entities, and others to create a system of training and problem solving entities for new adopters.

• Create regional fund, if necessary, to accompany CASF, CAF, and others.

Specific Policy Recommendations

Promulgate policies and change laws and regulations to promote sustainable deployment and adoption.

• For the state, consideration should be given to implementing a “Broadband Lifeline” program.

• For local/regional governments, remove regulatory barriers to deployment, and implementing policies to reduce deployment costs.

• For both local and state governments:• Implementation of a “dig once” policy. • When and where possible, reduce fees and restrictions for

companies to deploy high speed internet.

Specific Policy Recomendations

Require significant public benefits as a condition of mergers and acquisitions.

• Difficult to accomplish at the local level, but look for opportunities to be creative and hold the private sector accountable for serving everyone.

Specific Policy Recomendations

Sustainiability of Adoption EffortsTo permanently close the Digital Divide, adoption efforts must be integrated into the service delivery

mission of entities who work with target populations.

Other branches of government and community anchor institutions shouldinclude broadband adoption and digital

literacy in the continuum of care and services they can provide.

2017 Fresno Survey

Detailed Survey - Fresno’s Lowest Income Census Tract 309 Respondents All households have children, and ALL ARE ELIGIBLE

for discounted internet service. 23% of Households have no internet access Of those with Internet, ONLY 33% actually have low

cost internet. 229 Families not enrolled in low-cost internet

service, but 75% want information

THREE PRINCIPLES OF AN IDEAL PROGRAM

1) Outreach 2) Assessment3) Assistance

Broadband Adoption Outreach Project

Short Term GoalsLong Term Goals

Key Recommendations

Thank You

Public Comment

Next Meeting

November 15, 20181:00-3:00 p.m.

CDTFA Board Room450 N Street, Sacramento

Contacts

Stephanie TomDeputy Director, Broadband and Digital LiteracyEmail: Stephanie.tom@state.ca.govPhone: (w) 403-9614 (m) 207-4295

Laura AskinsManager, Broadband and Digital Literacy & LegislationEmail: laura.askins@state.ca.govPhone: (w) 403-9634 (m) 822-0934