California PUC service quality rules won’t age well for small business innovation

OPINION – California is in the midst of a once-in-a-generation investment to help ensure everyone has access to broadband services, and the desire for improved connectivity is universal. However, an ongoing California Public Utilities Commission (CPUC) docket on broadband service quality regulations threatens to undermine the commendable progress being made to narrow the digital divide and could impose undue costs on small businesses and consumers across the state.

In an age when digital dominates every aspect of our lives, the importance of connectivity access cannot be overstated. As a young professional working in California’s dynamic tech industry, I find myself acutely aware of the delicate balance between innovation and regulation.

Calls for increased regulations are usually well-intended, but the risk is that overly stringent regulations can have the opposite effect by creating unnecessary or duplicative barriers that raise costs for compliance and stifle future innovation potential. The CPUC’s service quality docket is a prime example of this dilemma, which is in part why the CPUC received thousands of public comments and documents regarding the issue.

While the CPUC’s intention is to enhance service quality, the increased regulatory burden would translate into higher operational expenses for service providers. Additional dollars spent on complying with new regulations would mean dollars diverted from investments into infrastructure, deployment and innovation. In essence, the CPUC’s well-intentioned efforts might inadvertently exacerbate the digital divide by making broadband services economically unviable for both providers and consumers.

This is a particularly alarming prospect for customers who are already grappling with limited options and higher costs, which is a reality for many Californians. Small businesses, the lifeblood of California’s economy, stand to bear a disproportionate burden if these higher costs materialize. Many small businesses are already operating on tight budgets due to increased cost of living and inflationary pressures, and an increase in operational expenses can be debilitating.

Small businesses thrive on connectivity, relying heavily on robust and affordable broadband services to compete in an ever-evolving digital economy where agility and adaptability are keys to success. Excessive regulations can stifle the nimbleness that defines many small businesses, hindering their ability to pivot and innovate swiftly in response to market demands. If the CPUC’s regulatory approach leads to higher broadband service costs, it could stifle the growth and competitiveness of California small businesses.

The ripple effects of increased service costs extend beyond small businesses. Consumers, especially those in economically vulnerable demographics, could bear the brunt of increased expenses for essential services. In a time when connectivity is not a luxury but a necessity for education, work, and social engagement, making broadband less accessible due to elevated costs can exacerbate existing socio-economic disparities.

Achieving a digital-first society where everyone is online will be a boon to the economy. Significant investments and network improvements by broadband providers have undoubtedly driven innovation and enhanced connectivity for many residents over the years. We should recognize the shared objective of ensuring that all Californians have access to reliable and high-quality wireless services.

While the CPUC’s commitment to improving wireless service quality for all Californians is commendable, the current regulatory trajectory risks widening the digital divide and obstructing future innovation that would benefit consumers and small businesses alike.

The challenges are complex, but with a strategic and inclusive approach, California can continue its progress toward a more connected and equitable future. That’s good news for everyone.

Brett Klein, of San Diego, is an Account Executive at StackAdapt working with small businesses.