California – California is looking at a legislative proposal meant to substantially reduce monthly broadband prices for low-income families, hence making internet connection affordable for its residents. A report from the Public Advocates Office of the California Public Utilities Commission indicates that this action would save Californians more than $1 billion yearly.
Part of an assessment by the state-appointed, independent advocacy arm of the California Public Utilities Commission, the study was published on March 18. It investigates the potential consequences of a legal mandate calling for internet service providers (ISPs) to provide a $15 per month fixed broadband plan for homes earning at or below 200% of the government poverty guidelines.
California Assembly Member Tasha Boerner’s bill inspired the project
A bill presented in January by California Assembly Member Tasha Boerner inspired this project. Aiming at the biggest ISPs in the state, the measure forces companies to limit internet costs for qualifying households at this lower level. Though facing various legal battles from ISPs, this strategy reflects measures done in New York where the Affordable Broadband Act was passed earlier this year.
The preliminary results indicate that, should the suggested price cap be put into effect, the savings for the roughly 1.4 million households now eligible and subscribed to services from one of the four major broadband providers—AT&T, Comcast, Cox, and Charter/Spectrum—could exceed $100 million.
The study also shows that the effect on the earnings of these ISPs would be small, maybe lowering their total income by less than one percent. Especially in light of the possible rise in broadband adoption rates, this is a modest cost for major companies to bear in the overall scheme of things.
The research details an instance in which low-income Californians adopt broadband at 100% coverage, which includes more than 5.8 million homes. In such a scenario, annual statewide total consumer savings might exceed $1 billion. Moreover, ISPs could benefit more under the $15 price cap as more new consumers come in, offsetting any initial losses from the reduced prices.
Affordable Connectivity Program provided help already
This legislative drive follows the federal government’s Affordable Connectivity Program, which finished last year. Previously, the program provided more than 23 million qualifying low-income families in the United States a $30 monthly broadband subsidy. Without this government subsidy, states such as California and New York have been forced to come up with own plans to close the void and reduce the financial effect on vulnerable populations.
Read also: California Assembly Bill 435 could significantly change driving laws in California
Although the March report provides just a first assessment, the Public Advocates Office has said it will provide an extensive investigation later in the year. This future research is anticipated to offer more in-depth analysis of the long-term consequences of the suggested price cap and more support the legislative effort meant to make broadband access fairer across California.