OPINION
Broad Thinking on Broadband

Most people ignore state public utilities commissions but this week the California PUC released a well-written report that deserves attention. "Broadband Deployment in California" contains a wealth of facts and identifies key policy problems responsible for slowing broadband rollout and economic growth.

From the beginning, the report acknowledges the many technological advances that rely upon sufficient bandwidth such as tele-medicine, distance learning, smart homes, and telecommuting. It also acknowledges that while California's early adopters and tech-savvy population are leading the nation in broadband use, the state is falling behind in "developing policies to continue broadband growth and facilitate deployment of next generation technologies."

Putting Up Roadblocks

In other words, California has become complacent when it comes to one of its most important industries. To those who view the state through a high tech lens, it might seem a mystery that California has allowed anti-broadband policies to thrive. For those who consider California the "left coast," perhaps the answer is clear.

Far too many California bureaucrats need control over business like a drug addict needs heroin. But the economy can handle only so much dysfunctional behavior. For instance, the report reveals that in March 2000, PG&E wanted to lease space on its towers to a fiber-optic cable company. In October 2002, the California PUC denied approval, shutting down the potential deployment.

The agency then changed its mind, but put up a different regulatory roadblock involving an issue that a different commission had already ruled upon. Then, in April of 2004, following a petition and many staff hours of explaining, the PUC granted the request. Unfortunately, by then it was too late, as the fiber-optic company had filed for bankruptcy.

In today's digital world, speed is key to competition and progress. When a regulatory agency takes four years to approve a lease request for the rollout of new services, it is effectively killing economic growth and jobs. That's an embarrassment to the Golden State and must be corrected immediately. Then there's the "right of way" issue.

Recognizing the Problem

In order to build broadband infrastructure in California, right-of-way permits are often required by various agencies including federal, state, local and even tribal governments. Obtaining the permits can take as little as a few weeks but sometimes months or even years.

Officials in Orange, Riverside and San Bernardino counties recently took two years to approve permits for SBC. The next time someone complains that providers are taking too long to get broadband service to a particular area, they should consider the enormous barriers government has created to high-speed rollout. To the credit of the PUC, it has recognized these serious problems.

"Uncertainty caused by the Right of Way application process is a barrier to [broadband] deployment. Financing of projects is often based on estimated completion dates that are impossible to predict under the current process," the report said. But the problem involves more than uncertainty.

The rules are not technology-neutral, and cities will sometimes use the fees as a way to try to fix budget problems. These facts foreshadow a gloomy scenario for California's technology industry if things don't change soon, because broadband rollout isn't just about broadband.

Supporting Growth

Software companies, computer and hardware makers, wireless devices, content providers, and many others all depend on fast pipes for both work and play. Indeed, a number of studies have shown that greater broadband deployment would stimulate significant economic growth.

Telenomic research estimates the creation of 1.2 million jobs nationally and 100,000 jobs in California alone with increased deployment. The Gartner (NYSE: IT) group says California could get even more growth than that -- they estimate California could create as many as two million new jobs if one includes the impact on areas such as retail , manufacturing, health care, and the like. These numbers make it imperative that the PUC and other lawmakers take great care to ensure broadband is allowed to thrive.

California may lead the nation in the number of broadband lines, but current policies risk the state's future status. The PUC's "Broadband Deployment in California" report helpfully points out the problems. Now it's up to policymakers to act on that knowledge and implement real reform.