California lawmakers are abandoning an ambitious proposal to force Google to pay news companies for using their content.

Instead, the tech giant has agreed to pay millions to support local media outlets and start an artificial intelligence program.

The first-in-the-nation agreement, announced last week, promises $175 million for local journalism across California over the next five years, but represents a significant departure from the bill pushed by news publishers and media employee unions earlier this year.

Rather than Google and Meta being forced to negotiate usage fees with news outlets directly, Google would deposit $55 million over five years into a new fund administered by UC Berkeley to be distributed to local newsrooms—and the state would provide $70 million over five years.

Google would also continue paying $10 million each year in existing grants to newsrooms.

The Legislature and the governor would still need to approve the state money each year; the source isn’t specified yet. Additionally, Google would contribute $12.5 million each year toward an artificial intelligence “accelerator” program, raising labor advocates’ anxieties about the threat of job losses.

Publishers who initially pushed for the proposal forcing Google to pay them said the deal was still a win. The UC Berkeley fund will be overseen by news industry groups; the money will be distributed according to the number of journalists employed at each publication, with some reserved for smaller or ethnic media outlets.

“This is a first step toward what we hope will become a comprehensive program to sustain local news in the long term, and we will push to see it grow in future years,” Julie Makinen, board chairperson of the California News Publishers Association, said in a statement.

Santa Rosa’s Mike McGuire, whose chambers considered a bill “to hold Big Tech companies accountable for the profits they make off” linking to news articles, also raised concerns. In a statement, he said the deal “lacks sufficient funding for newspapers and local media, and doesn’t fully address the inequities facing the industry.”

The agreement replaces two bills lawmakers had pursued the last two years as they tried to secure a cut of tech money to prop up California’s struggling local news industry. Following a nationwide trend, the state has lost one-third of its newspapers since 2005 in a trend experts say worsens civic engagement, polarization and misinformation.

To try to keep their readers, publications increasingly rely on social media and online search. Google controls the lion’s share of search in a way the U.S. Justice Department and one federal judge have said violates antitrust law.

The proposals to impose fees on Google’s use of news content in its search results prompted a flurry of tech company lobbying. In the past 18 months, for instance, Google spent more than $2.1 million lobbying lawmakers against those bills and others—more than triple what it spent in the same time period two years earlier, according to a review by CalMatters.

Introduced in February 2023, the first bill, by Oakland Assemblymember Buffy Wicks, would have required platforms such as Google and Meta to either pay a fee or negotiate with news outlets for using their news content.

It was sponsored by the news publishers association, whose members include major newspapers such as the San Francisco Chronicle and the Los Angeles Times. The bill passed the Assembly last year, but Wicks paused it to try to bridge a split among media companies over how the money would be divvied up.

Australia and Canada both passed similar measures in recent years—but the political headwinds were different in the tech companies’ home state.

Google has argued the bill would unfairly force it to pay for sending free traffic to news sites, and disadvantage smaller sites. In a legislative hearing in June, the company’s vice president of global news partnerships, Jaffer Zaidi, called the proposal “profoundly unconstitutional and problematic” since it could compel platforms to show content that they were forced to pay for.

The second bill, introduced this February by Orinda Sen. Steve Glazer, would have imposed a fee on major tech platforms to provide news outlets a tax credit to employ local journalists. The measure would have raised $500 million a year.

In response to the Wicks bill, Google temporarily removed links to California news websites from its search results. And in response to the Glazer bill, Google said it might stop funding nonprofit newsrooms nationwide.

At the time, McGuire called the threats “an abuse of power.”

Glazer shelved his bill in May, after failing to scrounge up the two-thirds majority he needed, and said he would focus on trying to improve the Wicks bill.

Tech companies doubled down on threats to stop linking to news sites in California if Wicks’ bill passed. And publishers had an incentive to support an agreement that would give them the money quicker. In Canada, the government has estimated Google is paying $73 million a year to news outlets under its new journalism industry law. But proponents of California’s deal say the money has been slow to be distributed.

By committing to pay into the new UC Berkeley fund, tech companies succeeded in killing the bill they opposed while appeasing both legacy print media and some digital-only news outlets with five years of support.

The Media Guild of the West, which represents reporters in Southern California, slammed the agreement and accused publishers and lawmakers of folding to Google’s threats.

“Google won, a monopoly won,” said Matt Pearce, the group’s president.

The guild said it was particularly concerned the deal involved a program promoting artificial intelligence technology, which it saw as a concession to the tech industry that could result in a further loss of reporting jobs. The Pacific Media Workers Guild, which represents journalists in Northern California, also opposes the deal.

The AI program appears to only be partly related to journalism: In its announcement, Wicks’ office said the program will give businesses, nonprofits and researchers “financial resources and other support to experiment with AI to assist them in their work,” addressing challenges such as environmental issues and racial inequities. OpenAI will contribute tech services, said former lawmaker Bob Hertzberg, who helped negotiate the deal. Proponents expect other tech companies to join in.

The AI accelerator would also create “new tools to help journalists access and analyze public information.” Makinen, of the news publishers association, said more details of the program “need to be made public as soon as possible,” and added that she wants to see “more of those resources directed toward publishers.”

PG&E is mostly keeping up with maintenance and repairs of its utility lines and infrastructure in Sonoma County.

There are discrepancies, however, between its inspection results and a court-appointed monitor, five years after it was found to be responsible for starting the Kincade Fire, according to the independent monitor’s report made public last week.

The court-approved monitor, Filsinger Energy Partners, completed its second annual compliance report to Sonoma County’s district attorney in June and showed hundreds of deficiencies that the utility company has largely cleared over the past year.

PG&E was placed under the five-year stipulated judgment to report its own inspections to the independent monitor, which also performed its own inspections, after the utility was determined to be responsible for starting the Kincade Fire in October 2019 that burned 77,000 acres, destroyed 374 structures and injured four people.

The fire, which was caused by equipment on a transmission tower near Geyserville that broke in high winds, caused the largest evacuation in Sonoma County history of nearly 200,000 people, according to District Attorney Carla Rodriguez’s office.

In its second annual report, the monitor’s inspectors frequently noted issues in PG&E’s distribution infrastructure that were not stated by its own inspectors, mentioning an issue about 22% more often than PG&E inspectors. The report said the issues did not qualify as “deficiencies” under the stipulated judgment, which are defined as violations of the specific commitments in the judgment, but they were noted for PG&E’s consideration.

‘I appreciate PG&E’s efforts thus far to remedy any deficiencies discovered by the Monitor and am looking forward to continued progress and cooperation going forward.’

— Sonoma County District Attorney Carla Rodriguez

The most frequent discrepancies were when the monitor noted an issue with a conductor having a section that was energized and exposed, or had visible damage. And the monitor’s inspections found 21% higher the rate noted for that category than PG&E’s.

It also found non-exempt equipment at an inspection location 12% more often than PG&E and damaged hardware components 11% more often.

The report said that the utility was following through with its agreement to create 100 jobs in the county and could exceed that number by the time the agreement is up in 2027. It has so far filled 44 new positions in the county.

Also, the report by the independent monitor found that PG&E was largely responsive over the last year to addressing hazards and deficiencies in the field, such as overgrown trees and faulty equipment. It corrected four issues the monitor identified as “immediate safety hazards.” Two were related to uprooting trees, one was for a broken branch hanging above a primary conductor and another was related to vegetation contacting a primary conductor.

The monitor reviewed 214 miles of inspections performed by PG&E and found the utility had addressed 128 out of 131 identified deficiencies. Fixes for the outstanding three are in progress.

Only one of the 51 transmission lines inspected was found to have a deficiency, which is being addressed, the report said.

Just two issues were found in a review of the utility’s 1,087 distribution components that the monitor said PG&E had already fixed.

Rodriguez said the compliance agreement and her office were bringing accountability for the 2019 fire.

“I appreciate PG&E’s efforts thus far to remedy any deficiencies discovered by the Monitor and am looking forward to continued progress and cooperation going forward,” she said.

PG&E said in a statement that it was on track to meet its commitments made in the stipulated judgment.

“Ongoing and expanded efforts to address the growing threat of wildfires are detailed in our Wildfire Mitigation Plan, and include undergrounding and system hardening, increased situational awareness and intelligence, asset management and inspections including using advanced tools and technology like drones, and vegetation management and patrol,” said a statement from PG&E spokesperson Lynsey Paulo.

The company has also made required donations over the past year to several nonprofit organizations that were impacted by the fire and entered into an agreement to start a fire safety training program at Santa Rosa Junior College.