In the face of “environmental and social justice” obligations, Comcast attempts retreat from rural service

by Steve Blum • , , , ,

Tesoro viejo 2

Comcast wants to give up its campaign to compete with a small rural telephone company – a rural local exchange carrier (RLEC) – in a high end, new development outside of Fresno. After the California Public Utilities Commission decided to allow such wireline voice competition if the would be competitor serves the greater community and not just wealthy exurbanites, Comcast asked to withdraw its request for permission to go head to head with Ponderosa Telephone in the Tesoro Viejo development.

No reason was given for the retreat, just a simple statement that Comcast “has determined that it will not, at this time, pursue expansion of its certificate of public convenience and necessity to include Ponderosa’s service territory”. But it’s easy to connect the dots:

  • Comcast adamantly refuses to voluntarily engage with the CPUC on any issue for any reason, lest it become entangled in regulatory obligations.
  • To enter an RLEC’s territory, the CPUC decided that Comcast or any other competitive wireline voice service provider has to promise to serve the same ratio of residential to commercial and low income to affluent customers as the RLEC they’re targeting.
  • The CPUC administrative law managing the case, Zhen Zhang, asked Comcast to comment on how its entry into Ponderosa’s territory would impact “achievement of any of any of the nine goals of the commission’s environmental and social justice action plan”.
  • Comcast decides to abandon that attempt.

In response, Zhang cancelled a hearing on the matter, but didn’t say whether or not she would grant Comcast’s never mind motion.

The big question that’s still to be answered is whether Comcast intends to do an end run around California’s telephone service regulations and provide phone service by other means in Tesoro Viejo. It’s installing its lines and equipment as construction proceeds in the development, and is offering broadband and video service to residents. Comcast also insists that the CPUC doesn’t have any jurisdiction over phone service using voice over Internet protocol (VoIP) technology.

Again, it’s not hard to connect the dots.

No power to regulate broadband means the FCC has no power to preempt California’s net neutrality law

by Steve Blum • , , ,

California is firing back at the monopoly model telecoms companies that want to block the state’s network neutrality law. Senate bill 822 was passed by the legislature and signed by governor Jerry Brown in 2018. It’s been on hold while a court fight over the Federal Communications Commission’s repeal of its own net neutrality rules played out.

Now it’s in front of a federal judge in Sacramento. The job of defending SB 822 belongs to California attorney general Xavier Becerra. His office filed its first full response to the claim that SB 822 is preempted by the FCC’s decision.

When the FCC declared that broadband is an “information service” and not a common carrier “telecommunications service”, it put broadband into a category of services that it’s not allowed to regulate in any meaningful way. That lack of authority was the FCC’s basis for repealing net neutrality rules: no authority means no rules.

In the brief, the California attorney general’s office argues that if there’s no authority to regulate, then the FCC also lacks authority to preempt state laws in that regard. That’s taken directly from the D.C. appellate court decision last year that mostly upheld the FCC’s net neutrality repeal. One big exception was the FCC’s attempt to impose a blanket preemption on state level broadband regulations.

Consequently, the brief concludes, California can go its own way…

The FCC repealed the bulk of the [Obama era net neutrality rules] because it determined it had no statutory authority to impose net neutrality conduct rules on [broadband] providers. That is different from a congressionally-authorized decision to refrain from regulating [broadband] providers; therefore, the repeal does not have preemptive force. That SB 822 enacts many of the same net neutrality protections repealed by the 2018 Order does not, in and of itself, result in conflict preemption. It is “quite wrong” to view the absence of federal regulation, on its own, “as the functional equivalent of a regulation prohibiting all States and their political subdivisions from adopting such a regulation.”

The first decision that federal judge John Mendez has to make is whether to ice California’s net neutrality law while the court battle drags on. If he says no and rejects Big Telecom’s request for a preliminary injunction that would block enforcement of SB 822, net neutrality will be the law of the land in California.

CPUC considers topping up broadband subsidy fund, but money will still fall short

by Steve Blum • , , , ,

Sick piggy bank

California’s primary broadband infrastructure subsidy fund will grow by about $70 million, if the California Public Utilities Commission approves a proposal to nearly double the tax that pays for it.

The California Advanced Services Fund (CASF) gets its money from a tax on phone calls made within California. That’s source of revenue is on the decline. The CPUC can collect up to $66 million a year for the fund (more, under certain circumstances), and sets the tax rate accordingly. During the first three years of the commission’s current five year authorisation, the CASF tax rate was set at about half a cent on the dollar – 0.56%. Because of the decline in intrastate telephone revenue, that rate would have led to a five year deficit of more than $100 million in money available for broadband infrastructure subsidies.

The deal on the table would raise the rate to 1.019% for the final two years the CPUC is allowed by law to assess the CASF tax on phone bills. CPUC staff estimates that would bring the annual take up to the annual $66 million limit, and hold the five year deficit at $53 million.

Most of the money in CASF goes towards building networks, but not all of it. Some of it pays for broadband promotion and other programs. The table below shows my calculations. Bottom line, there would be about $216 million available for new broadband infrastructure grants, instead of about $145 million, as I estimated in June.

That’s a help. More Californians will get the broadband service they need. But CASF will soon run dry, likely this year. More than $500 million was requested in the last round of infrastructure grant applications in May. And the CPUC has authorised – but not yet implemented – an extra round of applications to backfill bids for federal broadband subsidies in October. With the California legislature’s failure to address the state’s broadband and broadband funding deficits in its recently concluded session, what we see (or not) is all we’re going to get.

CASF Infrastructure Account, assuming surcharge increase to 1.019%

Authorised – total$575,000,000
Infrastructure shortfall (est.)($47,248,062)
Infrastructure Account net of shortfall$527,751,938
Infrastructure awards as of 31 Dec 2019$271,333,358
Infrastructure grants awarded in 2020$10,825,350
Cumulative admin overhead as of 30 Jun 2019$16,732,595
Estimated admin overhead FY 2019-25$13,142,082
Total Infrastructure Account spent/encumbered$312,033,385
Funds remaining for new CASF infrastructure grants$215,718,553

AT&T delivers low quality service to low income Californians, but lavishes fiber on the rich

by Steve Blum • , , , ,

Att outages by hh income

AT&T provides the highest quality service in the highest income neighborhoods of California, and the lowest quality in communities with the least income, according to a network quality study done by the California Public Utilities Commission.

The study’s initial findings were released last year. The top line conclusion was that AT&T and Frontier Communications are deliberately choking off investment in ageing copper phone systems, particularly in rural areas – now-bankrupt Frontier because it had no money for upgrades; AT&T because it could get away with it.

Chapters of the study are being released piecemeal. Some of the details are startling. The final conclusions and recommendations chapter expands on the initial summary’s description of AT&T’s economic redlining strategy. The average annual income in places where AT&T has upgraded its systems to full fiber to the premise technology is $72,000, versus $61,000 where it’s left copper networks in place.

Although the number of AT&T service outages climbed everywhere over the seven years of the study, high income neighborhoods also have more reliable service. Customers whose household income averages $42,000 a year or less experience nearly twice the number of “out of service incidents” as those who make $88,000 a year or more.

The study concludes that AT&T is holding people in low income communities hostage to deteriorating copper-based service and milking them for all they’re worth…

Those areas with the lowest household incomes tend to have the highest trouble report rates, the longest out-of-service durations, the lowest percentages of outages cleared within 24 hours, and the longest times required to clear 90% of service outages…wire centers that have experienced the smallest [legacy copper phone service] drop-off rates have exhibited the poorest performance on all service quality metrics. Clearly, those communities that AT&T perceives as the most captive are afforded the lowest levels of attention by the company. Since, as we have also found, wire centers that have received fiber upgrades exhibit superior performance on all of the service quality metrics, the fact that these upgrades have favored higher income communities may well explain the apparent inverse relationship that we have observed as between household incomes and service quality overall.

Recommended solutions include tightening service quality standards – including treating small, rural facilities the same as large, urban ones – and increasing fines when those standards aren’t met. Although the study points to the CPUC’s cynical policy of allowing AT&T and Frontier to effectively pay fines to themselves as part of the problem, it doesn’t explicitly recommend changing it.

For more background documents, click here.

Tired of 5G hype? Refresh yourself with 6G speculation

by Steve Blum • , , , ,

Samsung 6g

While AT&T, Verizon and T-Mobile squabble over each other’s claims of 5G dominance and their theories of 5G Evolution, it’s a good time to pause and reflect on how nothing changes in the mobile business. They had the same fights over 4G and they will do it all over again when 6G arrives.

Yes, 6G.

Expect to hear more about it in the not too distant future. 6G is undefined now, but there’s an assumption that it will be developed over the next 10 years, and that it will be something like total immersion in a sea of data.

FCC commissioner Jessica Rosenworcel talked about 6G at the Mobile World Congress show in Los Angeles a couple of years ago – the first time I heard someone try to define it. She described it as continual network densification. Samsung calls it “hyper-connectivity involving humans and everything”.

5G technology is all about network densification at the city block and factory floor level. 6G will be about densifying networks at a personal level.

6G development is likely to take the diverse development path that 4G took, rather than the internationally coordinated standards setting process that led to 5G. It’ll be developed by bits and pieces over the next ten years, and then eventually bundled into a package with a 6G label on it. As with other technologies, initial attempts might be for military applications. Technology that allows troops, equipment and weapons to be continually and comprehensively linked to AI-class analysis, command and control would be a game changer.

It’s not simple connectivity, of any generation, that’ll make the difference. Superiority – military or economic – will be gained or lost on the basis of the applications, data and devices that use it. 5G’s potential has barely been tapped and there’s a lot of work that has to be done before it runs out of steam.

But, ya know, 5G is so 2020.

Mobile carriers use arbitration board to debunk each other’s ads

by Steve Blum • , , , ,

The three major U.S. mobile carriers are fighting each other’s advertising claims via an arbitration process run by the Better Business Bureau. First, it was T-Mobile who successfully challenged AT&T’s 5GEvolution scam. The BBB’s National Advertising Division (NAD) said that putting a 5G label on 4G service was misleading, and the appeals board run by BBB agreed.

Verizon objected to T-Mobile’s wide-ranging claims of wide ranging 5G coverage and NAD agreed, albeit while blessing verbiage about the superior building penetration ability of the low band spectrum it’s using.

To round out the set, earlier this month the appeals board upheld an earlier NAD ruling – the result of a complaint by AT&T – that Verizon shouldn’t be calling its service “the most powerful 5G experience”…

The evidence in the record does not clearly demonstrate what consumers understand “powerful” to mean in “the most powerful 5G experience” in the contexts shown. The panel found that the claim “most powerful” conveys a broad superiority message and that the advertiser would need to demonstrate consumer understanding of the term “powerful” in order to make the claim.

The panel therefore concluded that absent this evidence of consumer understanding of the term “powerful,” Verizon did not have proper support for the claim “Verizon is building the most powerful 5G experience for America” and recommended that it be discontinued. The panel did note, however, that the claim would have been supported had it been non-comparative because the evidence in the record demonstrated that Verizon’s future 5G network when generally available will provide the essential network metrics, whether one accepts NAD’s interpretation or Verizon’s interpretation of “powerful.”

There’s no enforcement mechanism attached to any of these opinions. Verizon said it will pull the offending adds, and T-Mobile is taking its case to the appeals board. AT&T effectively ignored that board’s decision, and continues to identify its 4G service using a 5GE icon.

Phone service is phone service and emergency obligations apply regardless of technology, CPUC decides

by Steve Blum • , , , ,

Telephone companies have to follow disaster readiness and response rules laid down by the California Public Utilities Commission, regardless of the technology they use. That’s the CPUC’s opinion anyway. In a sharply written unanimous decision published yesterday, commissioners rejected challenges to telephone (but not broadband) emergency response obligations that they imposed on incumbent telcos, cable companies, mobile carriers and VoIP providers alike last year.

The regulatory logic that underpin those obligations also formed the basis for the CPUC’s initial response to the covid–19 emergency and the disaster resiliency standards for communications services that it recently adopted. The same cast of characters are fighting those edicts using similar arguments, so yesterday’s decision is both a good indication of how the commission will respond and how it will defend itself when the fight moves to federal courts, as it surely must.

AT&T, Charter Communications, Comcast, Frontier Communications and their lobbying front organisations claimed, among other things, that the CPUC’s disaster relief requirements were preempted by federal law because when phone service is delivered via 21st century voice over Internet protocol (VoIP) technology instead of 19th century copper wires and exchanges it magically transmogrifies from a telecommunications service to an information service.

Not true, the commission said. First of all, a federal court has already determined that telephone service is defined by the service provided and not by the technology used…

As the Court’s analysis demonstrates, the phrase “to facilitate communication by telephone” encompasses services beyond traditional landline service if the service facilitates “two-way communication by speaking as well as by listening,” regardless of the “[t]he exact form or shape of the transmitter and the receiver or the medium over which the communication can be effected.” Wireless service and VoIP service both facilitate two-way communication by speaking as well as by listening.

Second, while generally upholding the Federal Communications Commission’s repeal of network neutrality rules, a federal appeals court in the District of Columbia said last year that there’s no blanket preemption of state regulation of information services…

The [D.C. appeals court]…presents a more reasoned analysis, which preserves state authority over consumer protection matters that the FCC has either no authority to preempt or where no actual conflict exists. [It] supports the Commission’s consumer protection efforts in the Decision. Therefore [the telco and cable company] preemption argument fails.

Similarly, the CPUC rejected arguments made by AT&T and the mobile industry’s lobbying mouthpiece that the FCC reigns supreme over any wireless service. The decision said emergency response requirements have nothing to do with market entry or the price of service, which the CPUC cannot regulate per federal law, but are instead “‘other terms and conditions’ of wireless service”, which the same law firmly places under state jurisdiction.

Meaningless fines lead to AT&T’s, Frontier’s deplorable quality in California

by Steve Blum • , , , ,

Verizon taft 2dec2014

A study of AT&T’s, Verizon’s and Frontier Communications’ telephone network quality conducted by the California Public Utilities Commission shows that overall performance is poor across California. Low income communities have worse service and more outages than high income ones, but it’s not particularly good anywhere

Maximum Customer Trouble Report Rates of 6%, 8% or 10% of switched access lines per month (based on wire center size) are unduely generous because failure rates as high as these can hardly constitute acceptable service quality.

The apparently overly generous standard adopted…for Trouble Reports per Hundred access lines is in stark contrast to the requirement…that 90% of all out-of-service conditions are to be cleared within 24 hours. In fact, with the exception of the unique situation extant during the months of February and March 2016, this requirement has never been met by either AT&T or by Verizon/Frontier either on a companywide or on an individual wire center basis.

Although AT&T and Frontier, which now owns Verizon’s wireline systems, face fines, in theory, in practice they don’t: the CPUC allows them to spend the money on system maintenance and upgrades. In theory, it’s supposed to be extra maintenance and upgrade spending, but the loose accounting standards the CPUC applies makes that requirement meaningless.

The study recommends that “fines imposed due to an ILEC’s failure to meet service quality standards should be high enough so as to have the same financial consequences as poor service quality under competitive market conditions”. It doesn’t say how high that should be, but Verizon’s “unique situation” proved that telcos can perform when real money is on the line…

Verizon had actually cleared 91.58% and 92.64% of [out of service] conditions “within 24-hours of receiving notice of the out of service condition” for the months of February and March 2016, respectively, thus seemingly meeting the…requirement as the Commission had directed to be achieved as a precondition for the closing [of the sale of Californian systems to Frontier]. Faced with a powerful $10.5-billion financial incentive to do whatever was necessary to meet this condition, Verizon managed to make it happen – perhaps by importing personnel from some of its other…operations outside of California. However, this two-month compliance…was clearly an anomaly. When Frontier filed its…report for the second quarter of 2016…it showed 24-hour completion percentages for April, May and June 2016 of only 42.92%, 20.85%, and 72.35%, respectively.

It’s time for the CPUC to disavow its cynical decision to allow AT&T and Frontier to keep the money they would otherwise have to pay out in fines.

For more background documents, click here.

CPUC confronts California’s “monopolised” broadband market, despite “imaginary” and “perverse” federal policy

by Steve Blum • , , , ,

Cpuc 10sep2020

With the intent to “effectively deploy quality, affordable, and reliable broadband to all Californians”, the California Public Utilities Commission voted on Thursday to break the grip of telecommunications monopolies and change the way the industry is structured, incentivised and regulated.

It’s the CPUC’s response to governor Gavin Newsom’s executive order directing state agencies to fix California’s broadband deficit.

Commissioner Martha Guzman Aceves, who is leading the effort, explained the reasoning behind it in stark terms…

It’s not really focused on how we are improving our current failed system, but it’s really asking what the different ways and approaches we can take to systemically change our current system around providing the critical service of Internet.

We’ve been forced by our federal government to succumb to rules based on imaginary definitions of what the Internet is, which then block our ability to ensure universal service, and affordable service, through regulation. The justification has been made that competition will solve for it all, that the carriers will compete and bring down the prices and serve everyone. This neoliberalism economic theory has failed many Californians.

In fact, as you all know, 23% of Californian households do not have the Internet at home. That’s leaving 8.4 million Californians digitally disadvantaged and unable to participate in many of the benefits of economic and civic life.

And this has to change.

We all know this so intimately today as we take refuge in our homes, not only from covid but from the clouds of smoke and particulates that spread across our state. The Internet has been able to save many jobs, many people’s health, and our children’s education. And every Californian, every neighborhood needs the Internet to be resilient.

Before the Internet came to be, our strategy for serving all Californians’ telecommunications needs was to incentivise carriers based on a regulatory monopoly utility model. But…what we have left is really only an incentive-based set of strategies which have failed to meet the needs of universal service and affordability.

A major reason why this incentive-based approach through competition is not working is because there is no competition.

Only a very small group of Californians have choices. Less than 7% of Californians are served by three or more providers. About half of us have two choices. But over 40% have one or fewer. They may not have service at all.

Throughout the state, as an example of this 40% that have one or fewer service providers available to them, there’s not any area in the state where a cable company is competing with another cable company. If that cable company chooses not to serve all the residents in the community, there is no cable option. This is due, once again, to the perverse federal construct and the lack of obligation to serve all Californians…

So what does this result in? Everything that you know already. Tribes and rural communities left behind with poorly maintained infrastructure with insufficient speeds. Neighborhoods and urban communities that are redlined. And excessive pricing, due to this monopolised and oligopolised market that we have across the state…

So today I’m very excited…to ask the public to engage in this proceeding and offer their ideas for developing strategies for deploying more fiber in areas that lack it. Which can also provide for actual competition and, ultimately, affordability and universal access. This is a call for innovation, though pilots, through new partnerships and new strategies. We all know the urgency, and I’m very excited to get moving on these transformative solutions.

The other four commissioners stated their enthusiastic support, and then voted unanimously to launch the “Broadband for All” rulemaking.

This sort of proceeding typically drags on for years at the CPUC, but there’s reason to be optimistic that this time will be different. Newsom gave state agencies a December deadline for action. Under president Marybel Batjer – Newsom’s troubleshooter who was appointed last year – the CPUC has moved more quickly, particularly on high priority problems like covid–19, wildfires and utility bankruptcies.

The best way for cities to prepare for 5G is to get 4G right

by Steve Blum • , , , ,

Burlingame poles

There are differences between 4G and 5G facilities, but not necessarily meaningful ones from a policy perspective. For most people, the two will look the same, except the 5G facility might be smaller and is likelier to look more integrated, without so many obvious components and visible wires, although there will be no shortage of exceptions. Mostly it’s because 5G technology is newer and they’ve had more time to work on it. In theory (there aren’t a lot of actual small 5G installations to go by yet) 5G facilities should be smaller than 4G, and easier to integrate into a street light or utility pole. But that might not be obvious. As a general rule, a 5G facility should fit within whatever specs a city has set for 4G facilities.

One difference that might matter is cities will start seeing permit applications for locations where 4G wouldn’t have been installed. That’s because 5G facilities are designed to be deployed more densely, and in many cases physically closer to customers.

Another difference is that cities will get a lot more permit requests for 5G installations, once work actually begins, also because they’re installing more per square mile. There have already been cases where a carrier submitted dozens of applications at once. That’s something that planning and/or public works staff have to think about – there are shot clocks with deemed approved teeth established by the California legislature – 90 days for new equipment on existing sites and 150 days for new sites.

So far, the mobile companies, carriers and infrastructure companies, haven’t gone to war over that, but it’s only a matter of time before they do.

A third issue will be fiber. For the most part, 5G cell sites need to be connected directly to fiber cables, and that means trenching and adding wires to utility poles, which also means more permit applications. It’s not a question of something particularly new, it’s going to be a problem of sheer numbers.

That’s assuming that carriers want to build out to a community at all. The relationship between low community income levels and lack of telecommunications service and infrastructure is well established. A 5G permit onslaught might be a problem, but it’s a bigger problem for a community if it doesn’t come at all.