AT&T denies that Calif. broadband legislation will require taxpayers to pay $100M for 10 Mbps services

AT&T (NYSE: T) has come under fire from a telecom consultant who claims the telco is negotiating an agreement with the California Public Utility Commission (CPUC) that would apparently provide AT&T $100 million to bring broadband service to nearly all of the state's residents.  

Under the proposed California Assembly Bill 2130, the state would be able to give service providers like AT&T capital to build out broadband services about 98 percent of its population.

However, critics says that it would provide AT&T, which has not been formally named as a recipient of these funds, the capability to offer just 10 Mbps connections, which are far lower than the FCC's new 25 Mbps broadband standard.

Steve Blum, a telecom consultant for Tellus Venture Associates, said that besides only offering 10/1 Mbps connections, there will be little if any oversight over whether the $100 million is even being used to build out broadband service.

"If AB 2130 passes, AT&T gets rid of pesky competition and annoying accountability, and walks away with most, if not all, of a $100 million gift from taxpayers," said Blum in a blog post.

AT&T was quick to dismiss Blum's claims saying they are "grossly inaccurate."

"AB 2130 has nothing to do with giving AT&T funding," said AT&T in a statement. "The bill provides funding for the California Advanced Services Fund administered by the CPUC. Any statements to the contrary are a gross mischaracterization of the bill. AB 2130 addresses a critical need to fix and extend a program designed to bring high-speed internet to all Californians."

For more:
- The Register has this article
- Tellus Venture Associates has this post

Related articles:
AT&T's strategic business revenues jump to $2.8B, but market softness has an impact
AT&T extends fiber to over 950K business locations, enhances on-demand Ethernet reach
AT&T, Verizon, CenturyLink special access pricing practices face new FCC investigation

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