In summary

We fought to create today’s utility structure where companies providing public necessities must offer universal service at affordable rates.

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By Josh Lappen

Josh Lappen is a PhD student at Oxford University, where he studies the politics of electricity in Southern California,

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Ranjitha Shivaram, Special to CalMatters

Ranjitha Shivaram is a PhD student at Stanford University, where she studies the decarbonization of cities,

In much of the U.S., the digital divide separates some city-dwellers with access to fast and reliable internet service from rural communities that lack it

In California’s major cities, the gulf yawns between people who can afford modern internet access and those who are stuck cobbling together cell-plan data, friends’ subscriptions and patchy public internet.

Living in California today requires internet access for everything – attending school, working from home and accessing financial services and medical care. Essential services and commercial conveniences were already transitioning online and the pandemic has only accelerated ongoing trends.

To avoid being left behind by these changes, Californians need access to the internet’s physical infrastructure and the ability to afford a fast and reliable internet plan. Availability – the presence of a physical wired connection – is simple to measure and explain, which is why policy arguments around broadband tend to focus efforts there. 

In California’s cities, broadband availability is nearly universal, but adoption – the rate at which people actually subscribe to internet service – is uneven. This is because broadband providers have carved cities up into noncompetitive zones, leaving Californians dependent on a functional monopoly that charges high rates for outdated service. 

Take Los Angeles, for example. Residents of L.A. pay three and four times more than residents of Paris or Seoul for the same download speeds. Researchers have quantified L.A.’s broadband adoption gap: nearly two-thirds of Angelenos live in areas served by a single broadband provider. As a result, nearly 14% of Angelenos live in low-subscription neighborhoods and about 70% live in moderate-subscription neighborhoods. 

Bright spots, like the L.A. Public Library’s free broadband access, remain a sorely inadequate solution to the larger problem. Where service is shoddy or access is overpriced, the costs accrue to low-income households and communities of color. 

These patterns hold across the state: outside the remote and rural communities where state leaders have focused their broadband conversations, adoption remains challenging. The existing model of broadband delivery is clearly not working.

If reliable internet is a precondition for civic participation, steady employment and public education, then affordable access to high-speed internet is a public necessity. 

California’s cities have successfully adapted as private services have become public necessities, as internet has today. At the turn of the century, Angelenos faced the same conundrum in water and electrical services. Residents of all stripes felt the Los Angeles Water Company, which held a private monopoly franchise for supplying water, was providing unreliable service at exorbitant rates, and leaving lower-income neighborhoods to rely on crumbling pipes. So voters replaced it with a public utility – the first incarnation of the Department of Water and Power.

At the time, no one gave any thought to applying the same treatment to the city’s three private electric companies. By 1917, though, electricity’s role in daily life had fundamentally changed. Radio, affordable lighting and a growing range of appliances made electricity a public necessity, but adoption remained expensive. 

Despite opposition from the city’s free-market political coalition, voters established a city-run electric utility to compete with private enterprise. That new “public option” drove down electricity prices, breaking an unspoken noncompetition pact between the private electric utilities and setting off two decades of rapid innovation and rock-bottom prices. By the mid-1930s, voters moved to consolidate electric service in L.A. under the Department of Water and Power.

Broadband has now passed the same inflection point as water and power. But city, state and federal regulators are attacking the problem piecemeal, dancing around the fundamental reality that the state’s monopolistic broadband providers offer inadequate service at high prices.

Today, a set of nascent efforts to tackle broadband availability and adoption parallel different portions of California’s public service history. In San Francisco, as in Santa Monica and Pasadena, the city government is installing its own fiber optic lines. In the San Joaquin Valley, Cal State Fresno has launched digital inclusion initiatives focused on rural internet access. In L.A., Councilmember Nithya Raman campaigned on the argument that DWP should provide public broadband as a utility service. At the state level, Gov. Gavin Newsom’s plans for a private provider of statewide high-speed internet resembles the L.A. Water Company’s franchise model, in which a company gets a formal monopoly in exchange for periodic oversight. 

While all these solutions recognize the inadequacy of the status quo, only utility regulation or public service promises to make broadband reliable, affordable and equitable for every Californian. 

Turn-of-the-century Californians fought hard to establish the utility structure that exists today, under which companies providing public necessities must offer universal service at affordable rates and be subject to public accountability in return for their monopoly position. Rather than return to the stopgap arrangements of franchising or “public option” public-private competition, Californians can choose to make broadband the responsibility of a public agency or a regulated utility. 

Californians have fallen out of the habit of viewing public goods as public responsibilities. As the digital age has matured, this laissez-faire fatalism has yielded a system that produces private profits for functional monopolies, leaving us with an outdated, expensive and unreliable broadband network. 

California’s own history, though, demonstrates a solution to these problems: public action. So, the next time you struggle with high rates, hidden fees or sluggish connectivity, remember that leaving broadband in private hands is a political and policy choice, not a law of economic nature.

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