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After years of rapid growth, California's almond industry struggles amid low prices

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After years of rapid growth, California's almond industry struggles amid low prices

For much of the last decade, almonds have been such a lucrative crop that growers and investment firms have poured money into planting new orchards across vast stretches of California farmland.

Now, the almond boom has fizzled and the industry has entered a slump. Prices have dropped over the last several years, and the state’s total almond acreage has started to decrease as growers have begun to tear out orchards and plant other crops.

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In a sign of the troubles besetting the industry, one large almond-growing conglomerate has declared bankruptcy.

In a series of Chapter 11 filings in federal bankruptcy court, Trinitas Farming and other affiliated companies said that record-low almond prices and high interest rates contributed to their “serious liquidity constraints.”

The group of companies said in a court document filed Feb. 19 that they own 7,856 acres of almond orchards in five counties, including Solano, Contra Costa, San Joaquin, Fresno and Tulare. As part of the bankruptcy proceedings, these orchards are expected to be put up for sale.

“When the price is low, now we start seeing the results of it. And certainly the fear is that Trinitas is the tip of the iceberg,” said Jake Wenger, general manager of the Salida Hulling Assn., which runs an almond-hulling plant in Modesto.

Prices for premium almonds have dropped from nearly $4 a pound a decade ago to about $2 a pound or less, Wenger said. Though the low prices are affecting all growers, those that are being hit especially hard are the many investor groups that bought land when prices were high and now have large debts, he said.

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“The question becomes, do some of these banks call on some of these loans? And that’s really going to be a concern for a lot of people in the industry,” Wenger said. “Nobody got more indebted to the banks than a lot of these investor groups.”

An aerial view of farmland and almond orchards bisected by a highway.

A highway in Buttonwillow, Calif., bisects Kern County growing fields, with a large almond orchard on the left.

(Brian van der Brug / Los Angeles Times)

The group that filed for bankruptcy includes Trinitas Advantaged Agriculture Partners IV, LP, an investment fund that was formed and managed by Redwood City-based Trinitas Partners, a private equity investment company. It also includes the investment fund’s subsidiary Trinitas Farming, based in Oakdale, and 17 other subsidiaries.

The group’s lawyers said in court documents that the investment fund was organized by Trinitas Partners in 2015 to develop and operate almond farms in the Central Valley. It said the companies were ”well-positioned to become profitable ventures” but that they were ultimately “unable to raise necessary capital” through investments or from potential sales of assets. The entities’ reported debts total approximately $180 million.

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Trinitas Partners itself was not among the companies that filed for bankruptcy. Representatives of the companies did not respond to requests for comments about the matter.

“I really firmly believe they’re not going to be the only ones facing financial struggles,” Wenger said.

The low prices appear to be making it difficult for some investments to pencil out. Wenger and others in the almond business have noticed some orchards abandoned in parts of the Central Valley over the last year, with rows of unkempt trees now filled with weeds.

“We’re already seeing people walk away,” Wenger said.

He said he believes almond prices will eventually rebound, but it’s not clear when that turnaround might come.

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“I certainly don’t think we’ve seen the worst of it yet,” Wenger said.

While various factors have contributed to the situation, Wenger and others say some of the issues weighing on prices include an oversupply of almonds after years of rapid growth.

A grower touches a cluster of almonds on a tree.

A grower examines a cluster of almonds in a Manteca, Calif., orchard in June 2022.

(Paul Kuroda / For The Times)

California produces about 80% of the world’s supply of almonds. And according to federal data, the state’s harvested almond orchards skyrocketed from 760,000 acres in 2011 to more than 1.3 million acres in 2022.

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In the last two years, though, annual mapping of orchards has shown that California’s total almond acreage has started to decline.

Over the last decade, the almond boom coincided with growing concerns about water in California. When growers and investment companies bought land and drilled wells to pump groundwater in the Central Valley, the expanding nut orchards locked in long-term water demands and added to the strains on the state’s declining aquifers.

Wenger said he thinks it’s possible that if some of these orchards come out of production, groundwater levels could rise in places.

“It depends on what cropping patterns come in, and what happens next,” he said. “But it does have a potential that we could see benefits to groundwater.”

Critics who have questioned the amount of water dedicated to growing almonds include Bill Maher, who recently drew laughs on his show when he urged Gov. Gavin Newsom to “take on Big Almond.”

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The environmental group Food and Water Watch has also urged the state to limit the expansion of almond orchards and other water-intensive crops such as alfalfa. Chirag Bhakta, the group’s California director, said the expansion of almonds has “locked us into a situation where we’re growing way too many of these thirsty tree nuts in parts of California,” adding to the problems of overpumping of groundwater.

Bhakta said it’s hard to know if the bankruptcy case points to more trouble ahead in the industry. But he said it represents an “opportunity for us to shift what’s been grown on that land to actually reflect what’s best for California” and the state’s water needs.

Representatives of the almond industry have defended the crop’s water use, pointing to agricultural statistics showing almonds cover 21% of irrigated agricultural land in California but account for 14% of agricultural water use. They have also noted that in addition to the nuts, almond hulls are used for cattle feed.

In the coming years, California’s agriculture industry will face water limits under the requirements of the state’s 2014 Sustainable Groundwater Management Act. The law requires local agencies in many areas to develop plans to curb overpumping by 2040.

Researchers with the Public Policy Institute of California have estimated that addressing the groundwater deficit in the San Joaquin Valley will probably require taking at least half a million acres of farmland out of production, and they’ve called for expanding efforts to help convert farmland to other uses, such as solar development or habitat areas.

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Aside from water constraints, the almond industry has faced other challenges, including tariffs in China and other countries, as well as shipping bottlenecks during the COVID-19 pandemic.

“There has just been a glut in the almond market for a couple of years now,” said Caity Peterson, associate director of the Public Policy Institute of California’s Water Policy Center.

“It’s possible that we have hit peak almond,” Peterson said. “The industry will probably right-size itself to where the supply better meets the demand and it’s not oversupply, like we’ve got right now.”

Some experts say the almond industry is likely to bounce back. Analysts with Rabobank wrote in an analysis this month that “a strong rebound in almond prices is expected over the next 12 to 18 months.”

International markets have a big influence. According to the most recent crop data for the 12 months that ended in July 2023, 72% of the state’s almonds were exported, while 28% were sold domestically.

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California’s total almond acreage has gone down the last two years mostly because of decreases in new plantings, said Rick Kushman, a spokesperson for the Almond Board of California.

“Orchards last about 25 years, then growers replant, if they decide to. It’s possible that financing has been harder to get and it is surely more expensive right now,” Kushman said in an email. “Shipments have been strong in recent months, but we are a long way from seeing if that will affect planting decisions.”

There are roughly 7,600 almond farms in the state, and about 70% of the state’s orchards are under 100 acres, according to the Almond Board of California.

Wenger said those who are better suited to weather this sort of downturn are family-run businesses that own their land debt-free.

Almond growers aren’t the only ones in agriculture who have been dealing with tough economic conditions.

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“Walnut prices are terrible. Grape prices are terrible,” Wenger said. “Pistachios are not doing great. So we have all these crops that are starting to suffer.”

The fall of the Trinitas almond business follows the recent news that the large fruit grower Prima Wawona also filed for bankruptcy.

Some growers in the San Joaquin Valley have chosen to replace almond trees with pistachio orchards.

A closeup of almond blossoms.

Blossoms fill an almond tree branch in an orchard near Sanger. California produces about 80% of the world’s supply of almonds.

(Gary Coronado / Los Angeles Times)

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Still, most of California’s almond orchards remain, and almond trees have been blooming with white and pink flowers in the Central Valley.

“Agriculture in general is seeing some very difficult times,” said Bill Lyons, a farmer in Stanislaus County who once served as state agriculture secretary under Gov. Gray Davis.

On his family’s century-old ranch, they have a cattle operation and grow a wide variety of crops.

“We’ve been in the almond business for over 25 years, and we’re seeing unprecedented low prices for multiple years, and very high expenses,” Lyons said. “And when you combine the two, it’s extremely difficult for any almond farmer to make a profitable living.”

He said where some landowners have abandoned their trees, it’s a problem for neighboring growers because the untended orchards can harbor pests — such as navel orangeworm — that can spread to nearby orchards.

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Lyons said his family plans to keep growing almonds.

“Hopefully, the almond price will gain momentum,” Lyons said. “I have confidence in the almond industry, but it’s definitely going to be a serious bump in the road as we travel through to next year or so.”

Times staff writer Kevin Rector contributed to this report.

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Column: As taxpayers tire of handouts to billionaires, Major League Baseball demands public funding for a Vegas stadium

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Column: As taxpayers tire of handouts to billionaires, Major League Baseball demands public funding for a Vegas stadium

The longest-running melodrama in sports is less about events on the field of play than on machinations in the ownership suite of baseball’s Oakland A’s, who are close to finalizing a move to Las Vegas three or four years from now.

At least, that’s the hope of Major League Baseball and the team’s billionaire owner, John Fisher. That the deal will ultimately close as expected is the way to bet, to speak the language of Las Vegas.

But increasingly there are grounds to take the under. As my colleague Bill Shaikin reports, two challenges to the public funding for the team’s proposed new Vegas ballpark have emerged from a Nevada teachers union.

During the last Legislative Session, with important education issues outstanding,…Nevada politicians singularly focused on financing a ‘world-class’ stadium for a California billionaire.

— Nevada State Teachers Assn.

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Strong Public Schools Nevada, a political action committee of the Nevada State Education Assn., has filed a lawsuit questioning the public funding as unconstitutional. A separate committee of the union is pressing to qualify for November’s state ballot a voter referendum on the funding.

At issue is a measure signed last year by Nevada’s Republican governor, Joe Lombardo, authorizing $380 million in public funding for a ballpark estimated to cost $1.5 billion. The rest supposedly would come from Fisher and any other private investors he persuades to come on board.

The absurdity of making a grant of public money to a billionaire and his rich cronies for a sports venue while other public needs are more pressing isn’t lost on the teachers, and it shouldn’t be lost on anyone else.

“Nevada ranks 48th in per pupil funding with the largest class sizes and highest educator vacancies in the nation,” the teachers union stated when it filed its lawsuit in February. Yet “during the last Legislative Session, with important education issues outstanding … Nevada politicians singularly focused on financing a ‘world-class’ stadium for a California billionaire.”

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They’re right. Fisher, whose net worth is estimated by Forbes to be $3 billion, is the quintessential member of the Lucky Sperm Club, not to be indelicate. He’s an heir of Donald and Doris Fisher, founders of Gap Inc. Forbes ranks his “self-made score” at 2 on a scale of 10, meaning that almost all his wealth was inherited.

As I wrote last year, since becoming the sole owner of the A’s in 2016, Fisher has systematically dismantled the team and allowed its home stadium, the Oakland Coliseum, to crumble away.

The nearly 60-year-old multipurpose park was always a terrible place to watch a baseball game, with seats ridiculously distant from the action, but in recent years the experience has only gotten worse. During one game, the stadium flooded with sewage. On another occasion, the lights went out. Feral animals roamed the increasingly vacant corridors. Then, for the 2022 season, Fisher doubled season ticket prices.

Meanwhile, he and MLB commissioner Rob Manfred shed crocodile tears over the lack of fan support in Oakland. But what kind of product have Fisher and MLB been asking fans to pay for? In a nutshell: The A’s stink. Last year they turned in the worst record in baseball by losing 112 of their 162 games. They scored 339 fewer runs than they gave up to opponents.

This record was the product not of chance, but design. The team payroll last season of $43 million ranked dead last in the league, 12% of the league-leading New York Mets (who, to be fair, hardly made the most of their $334-million payroll, losing nearly 54% of their games). The best-paid player on the A’s, shortstop Aledmys Diaz, batted .229 last year and has started this season on the injured list.

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Fisher embarked on an ostensibly serious search for an alternative venue in the Bay Area. Oakland municipal officials trying to work with him on a plan to keep the team accused him of sabotaging those efforts, in part by insisting on massive subsidies for expansive joint stadium/commercial/residential developments.

Oakland A’s owner John Fisher

(Michael Zagaris / Getty Images)

The A’s have announced that after completing their sojourn in Oakland at the end of the season, they’ll play in the ballpark of the minor league Sacramento River Cats for the next three years, maybe four, while their new stadium rises on the Vegas Strip site of the Tropicana Hotel, which is due to be demolished this year.

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The Sacramento ballpark has about 14,000 seats, but it may still seem almost vacant when the A’s play there, as the average attendance at the team’s 13 home games in Oakland so far this year is 6,243, worst in the league by an unhealthy margin. The last year that average home attendance at A’s games exceeded 14,000 was 2019. At a game last May between the A’s and the Arizona Diamondbacks, only 2,064 seats were occupied, the lowest attendance for an A’s game in 44 years.

So what would Las Vegas gain from importing the A’s? Probably almost nothing. In very rare cases, a new sports venue can augment economic activity in a town or city, usually one with little else in sports or entertainment on offer.

Las Vegas is not exactly the kind of community in desperate need of another tourist draw. An A’s ballpark — or for that matter, the NFL Raiders’ Allegiant Stadium, where this year’s Super Bowl was held — can’t do much for a city where hotel occupancy is generally close to the highest in the nation.

As Bloomberg reported earlier this year apropos of Allegiant, “had the $1.9 billion stadium not been built at all, Las Vegas businesses wouldn’t have noticed the difference.” And any time that tourists spend at a ballgame is time they’re not spending inside the city’s true cash cows, its casinos.

Even when a new venue brings in new dollars, the gains for the home community typically comes at the expense of its larger region. Think of it as the Inglewood effect: This outpost of 110,000 residents may be seeing more business from SoFi Stadium, where the NFL Rams and Chargers play, but the chances that it has had a measurable impact on Los Angeles County (population 9.7 million) are minuscule to the point of being nonexistent.

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Some Inglewood business owners and residents, as it happens, are complaining that the project has brought them increased traffic and noise; higher residential and commercial rents have forced some residents and businesses out of the city.

That brings us back to the challenges to the Vegas stadium financing brought by the Nevada teachers. The clock is ticking on both the union’s lawsuit and its proposed ballot measures. Since February, almost nothing has happened in the Carson City courthouse where the lawsuit was filed.

That makes the A’s nervous, for the legislative authorization for public financing expires 18 months after MLB’s approval of the team’s relocation, which was delivered on Nov. 16 with a unanimous vote of the MLB team owners — giving the team a deadline of mid-May 2025 to complete all its necessary agreements with local authorities. That places the deadline a bit more than a year from now, assuming the court allows the legislation to stand.

If the legislation is overturned, the team and its government promoters would be back at square one. That’s why the team petitioned the court a few days ago to allow it to intervene in the lawsuit, which would allow them to speak up for their own interests in court. “The Athletics … will be affected if SB 1 is found unconstitutional,” A’s President Dave Kaval declared in a court filing. “Each year of delay will cost the Athletics millions of dollars.”

The union’s effort to overturn the public financing at the ballot box is also moving slowly through the Nevada courts. Its petition to place a referendum on the November ballot was invalidated in November by a state judge. The union appealed to the Nevada Supreme Court, which heard oral arguments on the case April 9 but hasn’t issued a decision.

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The union has until June 26, or just over two months from now, to collect more than 102,000 valid signatures of registered voters to place the referendum on the November ballot. But it can’t start the process until the court resolves the validity of its petition.

That’s important, because there are indications that Nevada voters are less than eager to spend public money on the A’s stadium. A poll released April 4 by the nonpartisan polling center of Boston-based Emerson College found that 52% of voters are opposed to the public funding, against only 32% in favor and 17% unsure.

The public financing of stadiums for team owners who could pay for construction out of their own pockets peaked in the 1990s, when voters finally got fed up with giveaways that left their cities and states holding the bag for venues that consistently ran in the red.

The trend faded, but never entirely disappeared. Recently, it has experienced a revival. Last year, the New York legislature and Erie County approved subsidies totaling at least $850 million for a new stadium for the NFL‘s Buffalo Bills. The team’s owner, oil and gas tycoon Terry Pegula, is even richer than Fisher, with a net worth of $6.8 billion, according to Forbes; he’s also almost entirely a self-made man.

Pegula brought the politicians to heel by threatening to move the team to Austin. The result was the largest taxpayer handout in U.S. sports history, narrowly edging out the $750-million subsidy Nevada posted to bring the NFL Oakland Raiders to Las Vegas in 2022.

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The game of rent-seeking that Fisher has played with Oakland and Las Vegas is every bit as humiliating for taxpayers as the Bills and Raiders deals. It will make the A’s the most-traveled pro sports team in American history, having originated as the Philadelphia Athletics under the legendary Connie Mack in 1901 before moving to Kansas City in 1955 and Oakland in 1968, with Sacramento and Las Vegas now in its future.

So a sports franchise with 15 American League pennants and nine World Series titles to its name and more than 100 years of loyal fandom in three cities will continue its existence as a token of Major League Baseball’s unsavory dalliance with the gambling industry.

The supine political leaders of Nevada should be ashamed at sticking their constituents with a billionaire’s invoice. The lords of the MLB should be ashamed of so shabbily treating the fans who supported the Oakland A’s through four World Series titles and stuck with them until Fisher made the spectacle on the field simply unwatchable.

Here’s an easy prediction: This won’t be the last time that pro sports owners show their willingness to treat their fans like crap, as long as someone is off in the distance waving millions of dollars around.

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Amid homeowner insurance crisis, consumer advocates and industry clash at hearing

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Amid homeowner insurance crisis, consumer advocates and industry clash at hearing

The fault lines running through California’s spiraling homeowners insurance crisis were on display Tuesday at a state hearing, where consumer advocates clashed with industry firms over a plan to allow insurers to use complex computer models to set premiums — a move state officials say will attract insurers to the market.

State Insurance Commissioner Ricardo Lara has proposed allowing insurers to employ so-called catastrophe modeling, which uses algorithms that predict the future risk properties face from wildfires, when setting the price of policies. Currently, rates are based on an insurance company’s past losses, which insurers increasingly dismiss as insufficient in light of the widespread acceptance that climate change has thrust California into a more dangerous future by causing more wildfires.

The models, which are in use in other states, are a key element of Lara’s strategy to moderate price increases by allowing more accurate calculation of risks while persuading insurers to do business in neighborhoods prone to wildfires. The move comes amid a recent stream of insurers exiting the California market with announcements they are not renewing policies or have stopped writing new ones.

Consumer groups worried at the hearing that the draft regulations would not allow enough scrutiny of the models, while several consulting firms that have developed them expressed concern about protecting their intellectual property.

“The algorithms and artificial intelligence that private ‘black box’ catastrophe models use will simply be tools for insurance company price gouging unless California mandates real transparency into how they impact prices and imposes real rules of the road regarding their design and use,” said Carmen Balber, executive director of Consumer Watchdog, an L.A. advocacy group that led the campaign for passage of Proposition 103, the 1988 measure that requires homeowners and auto insurers to get state approval for rate hikes.

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The group, like other consumer advocates who spoke at the hearing, called on Lara to work with the state’s academic and insurance experts to develop a “public model,” in which all the factors that go into the computer simulations are available for everyone to review. Such a model could be used to set rates or benchmark privately developed models.

The draft regulations require those who want to review the models to sign nondisclosure agreements, which Consumer Watchdog has alleged will prevent its staff members from discussing the models among themselves.

Julia Borman, a director at Verisk, a company that builds computer models used by insurers, expressed concern that the draft proposal put forth by Lara would allow for a review by “countless participants and create the opportunity for an infinite timeline,” while not safeguarding companies from having their models ripped off by others

Michael Soller, the state Department of Insurance’s deputy commissioner for communications, said Lara has publicly stated that the draft rules will allow for the development of public catastrophe models, which the department might then use to evaluate the insurers’ proprietary models.

The proposal to allow catastrophe models is part of Lara’s larger Sustainable Insurance Strategy announced last fall. Other elements include righting the finances of the state’s Fair Access to Insurance Requirements plan, an insurer of last resort that has been deluged with new policyholders since insurers started pulling back from the market. He also wants to allow insurers to include in premiums the cost of reinsurance, which they purchase to protect themselves from disasters.

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Catastrophe models are already allowed in California for pricing policies that cover earthquakes and fires caused by quakes. Along with wildfires, under the proposed regulations, the use of the models would also be permitted for insurance covering terrorism, floods and some other types of coverage.

Gerald Zimmerman, senior vice president of government and industry relations at Allstate, which stopped selling new homeowners insurance policies in the state in 2022, said that adopting Lara’s strategy would be a game changer. “Allstate will begin writing new homeowner insurance policies in nearly every corner of California,” he said.

Other speakers at the three-hour hearing included insurance agents and local officials, as well as homeowners groups, which want to ensure that catastrophe models take into account steps taken by homeowners and government agencies to reduce fire risks, such as by making homes more fire-resistant and reducing brush in a community. Although the draft regulations call for doing so, several speakers complained that such mitigation efforts had not been reflected in recent premium increases.

The Insurance Department plans to review Tuesday’s remarks in preparing for the release of a new set of proposed regulations. Lara has the support of Gov. Gavin Newsom, who issued a letter calling for the commissioner to move quickly to resolve the crisis. The regulations do not require legislative approval or the governor’s signature.

“We will review all public comments while staying on track to implement all changes this year, so insurance companies start writing more policies in all areas,” Soller said.

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Column: After a years-long pause, the FCC resurrects 'network neutrality,' a boon for consumers

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Column: After a years-long pause, the FCC resurrects 'network neutrality,' a boon for consumers

In the midst of its battle to extinguish the Mendocino Complex wildfire in 2018, the Santa Clara County Fire Department discovered that its internet connection provider, Verizon, had throttled their data flow virtually down to zero, cutting off communications for firefighters in the field. One firefighter died in the blaze and four were injured.

Verizon refused to restore service until the fire department signed up for a new account that more than doubled its bill.

That episode has long been Exhibit A in favor of restoring the Federal Communications Commission’s authority to regulate broadband internet service, which the FCC abdicated in 2017, during the Trump administration.

This is an industry that requires a lot of scrutiny.

— Craig Aaron, Free Press, on the internet service industry

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Now that era is over. On Thursday, the FCC — now operating with a Democratic majority — reclaimed its regulatory oversight of broadband via an order that passed on party lines, 3-2.

The commission’s action could scarcely be more timely.

“Four years ago,” FCC Chair Jessica Rosenworcel observed Thursday as the commission prepared to vote, “the pandemic changed life as we know it. … Much of work, school and healthcare migrated to the internet. … It became clear that no matter who you are or where you live, you need broadband to have a fair shot at digital age success. It went from ‘nice to have’ to ‘need to have.’ ”

Yet the commission in 2017 had thrown away its own ability to supervise this essential service. By categorizing broadband services as “information services,” it relinquished its right to address consumer complaints about crummy service, or even collect data on outages. It couldn’t prevent big internet service providers such as Comcast from favoring their own content or websites over competitors by degrading the rivals’ signals when they reached their subscribers’ homes.

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“We fixed that today,” Rosenworcel said.

The issue the FCC addressed Thursday is most often viewed in the context of “network neutrality.” This core principle of the open internet means simply that internet service providers can’t discriminate among content providers trying to reach your home or business online — they can’t block websites or services, or degrade their signal, slow their traffic or, conversely, provide a better traffic lane for some rather than others.

The principle is important because their control of the information highways and byways gives ISPs tremendous power, especially if they control the last mile of access to end users, as do cable operators such as Comcast and telecommunications firms such as Verizon. If they use that power to favor their own content or content providers that pay them for a fast lane, it’s consumers who suffer.

Net neutrality has been a partisan football for more than two decades, or ever since high-speed broadband connections began to supplant dial-up modems.

In legal terms, the battle has been over the classification of broadband under the Communications Act of 1934 — as Title I “information services” or Title II “telecommunications.” The FCC has no jurisdiction over Title I services, but great authority over those classified by Title II as common carriers.

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The key inflection point came in 2002, when a GOP-majority FCC under George W. Bush classified cable internet services as Title I. In effect, the commission stripped itself of its authority to regulate the nascent industry. (Then-FCC Chair Michael Powell subsequently became the chief Washington lobbyist for the cable industry, big surprise.)

Not until 2015 was the error rectified, at the urging of President Obama. Broadband was reclassified under Title II; then-FCC Chair Tom Wheeler was explicit about using the restored authority to enforce network neutrality.

But that regulatory regime lasted only until 2017, when a reconstituted FCC, chaired by a former Verizon executive Ajit Pai, reclassified broadband again as Title I in deference to President Trump’s deregulatory campaign. The big ISPs would have geared up to take advantage of the new regime, had not California and other states stepped into the void by enacting their own net neutrality laws.

A federal appeals court upheld California’s law, the most far-reaching of the state statutes, in 2022. And although the FCC’s action could theoretically preempt the state law, “what the FCC is doing is perfectly in line with what California did,” says Craig Aaron, co-CEO of the consumer advocacy organization Free Press.

The key distinction, Aaron told me, is that the FCC’s initiative goes well beyond the issue of net neutrality — it establishes a single federal standard for broadband and reclaims its authority over the technology more generally, in ways that “safeguard national security, advance public safety, protect consumers and facilitate broadband deployment,” in the commission’s own words.

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Although Verizon’s actions in the 2018 wildfire case did not violate the net neutrality principle, for instance, the FCC’s restored regulatory authority might have enabled it to set forth rules governing the provision of services when public safety is at stake that might have prevented Verizon from throttling the Santa Clara Fire Department’s connection in the first place.

Until Thursday, the state laws functioned as bulwarks against net neutrality abuses by ISPs. “California helped discourage companies from trying things,” Aaron says. Indeed, provisions of the California law are explicit enough that state regulators haven’t had to bring a single enforcement case. “It’s been mostly prophylactic,” he says — “telling the industry what it can and can’t do. But it’s important to have set down the rules of the road.”

None of this means that the partisan battle over broadband regulation is over. Both Republican FCC commissioners voted against the initiative Thursday. A recrudescence of Trumpism after the November election could bring a deregulation-minded GOP majority back into power at the FCC.

Indeed, in a lengthy dissenting statement, Brendan Carr, one of the commission’s Republican members, repeated all the conventional conservative arguments presented to justify the repeal of network neutrality in 2017. Carr painted the 2015 restoration of net neutrality as a liberal plot — “a matter of civic religion for activists on the left.”

He asserted that the FCC was then goaded into action by President Obama, who was outspoken on the need for reclassification and browbeat Wheeler into going along. Leftists, he said, “demand that the FCC go full-Title II whenever a Democrat is president.”

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Carr also depicted network neutrality as a drag on profits and innovation in the broadband sector. “Broadband investment slowed down after the FCC imposed Title II in 2015,” he said, “and it picked up again after we restored Title 1 in 2017.”

Carr chose his time frame very carefully. Examine the longer period in which net neutrality has been debated at the FCC, and one finds that broadband investment crashed after a Republican-led FCC reclassified broadband as an information service in 2002, falling to $57 billion in 2003 from $111.5 billion in 2001.

Investment did decline between 2015, when net neutrality rules were reinstated, and 2017, when they were rescinded — by a minuscule 0.8%. It hasn’t been especially robust since then — as of 2002 it was still running at only about 92% of what it had been two decades earlier.

As the FCC observed in Thursday’s order, “regulation is but one of several factors that drive investment and innovation in the telecommunications and digital media markets.”

The commission cited consumer demand and the arrival of new technologies, among others. Strong, consistent regulation, moreover, opens the path for new competitors with new ideas and innovations — and can bring prices down for users in the process.

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The truth is that network neutrality has been heavily favored by the public, in part because examples of ISPs abusing their power were not hard to find. In 2007, Comcast was caught degrading traffic from the file-sharing service BitTorrent, which held contracts to distribute licensed content from Hollywood studios and other sources in direct competition with Comcast’s pay-TV business.

In 2010, Santa Monica-based Tennis Channel complained to the FCC that Comcast kept it isolated on a little-watched sports tier while giving much better placement to the Golf Channel and Versus, two channels that compete with it for advertising, and which Comcast happened to own. The FCC sided with the Tennis Channel but was overruled by federal court.

Even barring a change at the White House, the need for vigilant enforcement will never go away; ISPs will always be looking for business models and manipulative practices that could challenge the FCC’s oversight capabilities, especially as cable and telecommunications companies consolidate into bigger and richer enterprises and combine content providers with their internet delivery services.

“This is an industry,” Aaron says, “that requires a lot of scrutiny.”

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