California task force urges broadband bonds

SAN FRANCISCO (Reuters) - California should consider issuing debt to augment private investment in enhancing and expanding high-speed communications services, a state task force said on Thursday.

It said that better, faster and more available broadband capabilities would propel economic growth for the most populous U.S. state, where 96 percent of households already have access to basic high-speed communications.

The task force did not specify how much debt California should issue, or in what kind, to help finance future broadband infrastructure, noting public debt is just one form of funding that should be considered.

“It’s a way to get different pots of money available,” Anne Neville, manager of the California Broadband Initiative in the state’s business, transportation and housing agency, told Reuters in a telephone interview.

Gov. Arnold Schwarzenegger commissioned the report, which recommends California issue infrastructure bonds and use proceeds “in partnership” with investment from the private sector to finance components of high-speed capable networks in unserved and underserved markets.

“Supporting broadband infrastructure using funds made available through a bond issuance makes sense,” the task force’s report said. “The infrastructure will remain useful for decades, often past the repayment of the bond.

“Broadband is a capital improvement, and the technology has a long, useful life and, therefore, it is appropriate to pay for it over time, like other state investments,” the report added. “A sizable investment, allocated judiciously, could generate five times that amount in commercial investment.”