Schedule set for appeals of FCC local pole ownership preemption

by Steve Blum • , , , ,

Riverside pole mount

The federal appeals court in San Francisco set 5 April 2019 as the filing date for opening briefs in the nine challenges it’s received, so far, to the Federal Communications Commission’s September order preempting municipal ownership of streetlight poles and other potential wireless assets in the public right of way.

The FCC will have a month to respond, then the challengers will have three weeks to file a final rebuttal. So it’ll be the end of May before all the opening arguments are on the table. After that, it could be a year or more before the process is complete and the San Francisco judges issue a decision.

Six of those challenges were filed by cities, counties and their associations that contend that the FCC went beyond the authority it was granted by congress, if not beyond the bounds of the federal constitution. The other three were submitted by mobile carriers who thought they should have been given even more freebies by the FCC.

Those cases were transferred to the San Francisco-based ninth circuit by the tenth circuit court of appeals in Denver, which agreed with arguments made by the City of San Jose and other local agencies that the FCC’s September wireless preemption order and its August wireline preemption order were, for legal purposes, two halves of the same decision.

There’s still a lot of housekeeping work to be done, though, before substantive arguments can begin. Four other challenges – one by AT&T and three by municipal challengers – are lodged in the federal appeals court based in Washington, D.C. Presumably those will be transferred to San Francisco, too, and then consolidated with all the others – September wireless order and August wireline order alike.

In the meantime, the FCC wireless order is in effect. At least to the extent that it has effect, which is not as much as mobile carriers would like cities to believe.

AT&T, Frontier, Charter carve out exclusive California subsidy territory

by Steve Blum • , , , ,

As expected, AT&T and Frontier Communications blocked broadband infrastructure grants in vast swaths of rural California yesterday, at least for anyone but themselves. The companies filed reports with the California Public Utilities Commission stating they weren’t giving up federal Connect America Fund subsidies in any of the census blocks they claimed in 2015.

Charter Communications tried a similar trick, submitting a letter telling the CPUC where it will be upgrading video-only analog systems to digital capability later this year. There are a couple of problems with Charter’s promises, though. First, it’s admitting it hasn’t complied with the CPUC decision that allowed it to buy Time Warner’s cable systems in California. In that decision, Charter was ordered to upgrade all of its analog territory to digital capability by November, 2018. That deadline has already passed.

Second, Charter is invoking “the spirit” of the right of the first night first refusal granted by the California legislature, but not accepting any of the hard responsibilities that go along with it. As a practical matter though, if Charter delivers on its most recent promise, it could be enough to preempt any California Advanced Services Fund (CASF) grants to independent Internet service providers in its remaining analog service areas.

This right of first refusal for incumbents, and the additional privileges granted on top of it to Frontier and AT&T, were included in assembly bill 1665, which was passed by the legislature in 2017. The bill set aside $300 million for CASF infrastructure grants, and gamed the rules to make it easier for AT&T, Frontier and other incumbents to get their hands on it, but harder for potential competitors to qualify.

No other right of first refusal claims were distributed yesterday. Others might have been filed, but there’s no indication at this point that any were.

Last month, the CPUC restarted the program. The first batch of CASF infrastructure grant applications are due on 1 April 2019. We’ll find out then whether incumbents have left enough room for meaningful independent broadband upgrades anywhere in California.

Filings:

AT&T CAF–2 report, 15 January 2019
AT&T census block list, 15 January 2019
Charter Communications upgrade notice, 15 January 2019
Frontier Communications CAF–2 report, 15 January 2019
Frontier Communications census block list, 15 January 2019

California is losing its grip on utility service and infrastructure

by Steve Blum • , , , ,

Harold lloyd safety last

The future of northern California’s energy supply, and the utility pole routes that support it, will be largely in the hands of federal judges. Pacific Gas and Electric gave notice yesterday that it will, in all likelihood, file for bankruptcy protection in two weeks. The company said that it may have to pay as much as $30 billion in damages stemming from catastrophic wildfires it apparently played a role in starting in 2017 and 2018. That’s about three times more than the company was worth before its stock price nosedived on the news. A federal bankruptcy court will have to decide how to carve up whatever is available, and who gets control of the carcass.

Another federal judge is assuming an oversight role that, in theory, the California Public Utilities Commission is supposed to fill. Last week, judge William Alsup gave PG&E until the end of the month to come up with a plan for inspecting the more than 100,000 miles of electric lines it operates in California before the next fire season begins in June. He’s essentially PG&E’s probation officer, following the corporation’s of criminal conviction related to a natural gas line explosion in San Bruno in 2010.

So far, the CPUC hasn’t made any comment about PG&E bankruptcy plans or Alsup’s encroachment on its turf. Last month, CPUC president Michael Picker launched an investigation that could result in PG&E break up, or a takeover by the state, or any number of other fates. Or could have, before financial markets, trial lawyers and the federal judiciary got tired of waiting. At the time, Picker stated in a press release that “this process will be like repairing a jetliner while it’s in flight. Crashing a plane to make it safer isn’t good for the passengers”.

Yesterday, PG&E said the plane is going down. All we passengers can do is assume the position, and hope for the best.

FCC’s streetlight ownership preemption takes little effect today

by Steve Blum • , , , ,

The Federal Communications Commission’s order preempting local ownership of streetlights and other municipal property in the public right of way is now active. What does it mean to cities? Nothing much, according to a court filing by the FCC

The Order does not itself require localities to do anything, nor does it compel approval of any particular siting request; it simply articulates standards for courts to apply if and when they are confronted with any future siting disputes that might eventually arise…nor does it prevent localities from recovering all of their actual and reasonable costs…

The Order’s safe harbor for recurring fees up to $270 per small cell per year is not a “limit o[n] compensation” above that amount, as Movants wrongly assert; rather, the Order makes clear that localities may charge higher fees if a reasonable approximation of their costs exceeds that amount.

When the Order takes effect, the only consequence is that carriers may submit new requests to be processed under these standards. If a locality does not timely grant a request, the carrier must allow at least sixty days to elapse before seeking judicial review. A court must then determine whether the locality has violated the statute under the particular facts presented and whether relief is warranted—determinations that “remain within the courts’ domain.” The Order will thus have no compulsory effect until the affected locality has an opportunity to justify its decision before a “court of competent jurisdiction.”

The FCC made these statements in its successful opposition to a request by a group of local agencies, led by the City of San Jose to put the “September Order” on hold. The federal appeals court based in Denver denied the group’s request last week, saying it “failed to meet their burden of showing irreparable harm if a stay is not granted”.

Both AT&T and Verizon signalled that they intend to take a more aggressive attitude towards cities once the FCC order is, in theory, in effect. But as the FCC itself points out, there’s no urgent need to humor them. Yet.

Links to motions, petitions, court documents and background material, Californian and federal, are here.

My clients are mostly California cities, including some that are directly involved in this case. I’m not a disinterested commentator. Take it for what it’s worth.

Newsom’s budget plan lowers barriers to public broadband financing

by Steve Blum • , , , ,

Following up on one of the items in his campaign manifesto, California’s new governor, Gavin Newsom, might make it easier to finance municipal broadband projects. One of the many, many ideas offered in his maiden budget proposal is to make it easier to form enhanced infrastructure financing districts by eliminating requirements for voter approval of bond issues…

Various economic development tools have been introduced following the dissolution of Redevelopment Agencies (RDAs), including Enhanced Infrastructure Financing Districts (EIFDs). However, only three EIFDs have been formed since statute created them in 2014. EIFDs can be created by cities or counties without voter approval and expend tax increment revenues without voter approval. However, an EIFD must receive 55-percent voter approval to issue debt.

The Budget encourages the formation of additional EIFDs through removal of the 55-percent voter approval requirement to issue debt. This change will allow EIFDs to support longer-term infrastructure commitments, similar to former RDAs.

Although it’s always been arguable that EIFDs can build and operate publicly-owned broadband infrastructure, the California legislature removed all doubt last year when it passed assembly bill 1999. Public agencies in California – cities, counties and special districts, including EIFDs – were given explicit authority to get into the broadband business.

As with the redevelopment agencies that were killed off by the legislature in 2012, an EIFD would repay the debt with future increases in tax revenue attributable, in theory, to the infrastructure improvements. It’s a complicated process. Even if Newsom succeeds in making it easier for EIFDs to borrow money, that doesn’t mean it’ll be easy.

Forming an EIFD will not be the first step towards a community broadband project. It will come further down the road, after a city or other local agency decides it wants to get into the broadband business. But it’s one more tool in the kit, and that’s useful.

Microsoft’s rural broadband gamble might have millions of winners

by Steve Blum • , , ,

The rural/urban broadband divide is deep, according to a report by Microsoft. For people living and working in rural areas, it’s confirmation of what they already know, but it’s valuable nonetheless. Microsoft’s critique of the available data – and the 25 Mbps download/3 Mbps upload speed standard – is a useful corporate counterweight to the claims made by AT&T and Frontier, which are the telcos receiving the lion’s share of federal broadband subsidies for 10 Mbps down/1 Mbps up service in rural California.

The report highlights the annual coverage data submitted to the Federal Communications Commission by Internet service providers. The latest numbers show that 25 million people in the U.S. lack access to what Microsoft calls “a broadband-speed connection to the internet”, i.e. 25 Mbps down/3 Mbps up. Of those, 19 million people live in rural communities – 31% of the U.S. rural population.

California has 1.2 million unserved rural residents, representing 54% of our rural population, according to Microsoft.

But the FCC data probably overstates broadband availability, Microsoft says…

Data that Microsoft collects as part of our ongoing work to improve the performance and security of our software and services for customers provides additional evidence that the FCC overestimates broadband usage in the United States. While the FCC reports that 92 percent of Americans have access to broadband, our data indicates that the number of people who connect to the internet at 25 Mbps is probably closer to 49 percent. Largely rural states including West Virginia, Alaska, New Mexico, Arkansas, and Mississippi that rank among the lowest for broadband access according to the FCC are also among the lowest in our data.

Microsoft’s solution is its “Airband Initiative” which, the company says, is aimed at “harnessing unassigned broadcast spectrum known as TV white spaces to bring broadband connectivity to 2 million unserved rural Americans”.

That spectrum is in the 700 MHz range, which is better able to propagate over rural distances and cut through foliage and other obstructions, but also carries less data than more finicky higher frequency bands. That’s the reality of wireless engineering trade offs: there are no magic solutions, only different – and valuable – tools in the kit.

So far, Microsoft has invested in eight companies – including Cal.net in California – that plan to eventually reach about 1.1 million unserved people via fixed wireless service. Microsoft is not releasing actual subscriber or availability data, or disclosing how much it’s investing, though.

The initiative is not philanthropy on Microsoft’s part (nor should it be). The investments might or might not generate a direct return, but the “royalty-free access to…patents and sample source code related to TV white spaces technology” that Microsoft is also contributing could be significant. Using white spaces without interfering with TV broadcasts requires a central frequency coordinator, such as Microsoft or Google, another contender for that role.

The more rural households that Microsoft’s partners serve, then the greater the adoption of Microsoft’s core technology and the better the chance it has of cornering the top spot in that market. If that strategy works, everyone wins. If it doesn’t, Microsoft loses.

Just so.

FCC pole preemption appeals leave Denver via loophole, land in San Francisco

by Steve Blum • , , , ,

San francisco skyline 625

Update, 11 January 2019: the federal tenth circuit court of appeals denied a request by the City of San Jose and other cities to delay implementation of the FCC’s September preemption order. It is still scheduled to take effect on Monday.

The growing list of challenges to a Federal Communications Commission decision to preempt local ownership of streetlight poles and other municipal property located in the public right of way will be decided by the San Francisco-based ninth circuit federal appeals court.

Originally, the cases were assigned by lottery to the federal tenth circuit court, headquartered in Denver. But a coalition of local governments led by the City of San Jose argued an earlier appeal of a separate but related FCC order – aka the August order, which dealt primarily with wireline issues – should take precedence as the lead case. Yesterday, the Denver appeals court agreed that the FCC’s wireless deployment order, aka the September order, which took away any ownership rights cities might have over streetlight poles is inextricably intertwined with it…

After careful consideration, we conclude that the FCC’s August Order and its September Order are the “same order” for purposes of [federal law]. Accordingly, the motion to transfer is granted and these matters are transferred to the United States Court of Appeals for the Ninth Circuit.

It’s good news for cities, counties and other local agencies, and bad news for the unholy alliance of republican FCC commissioners and mobile carriers. In the past, the ninth circuit has taken a more narrow view of what qualifies as an effective prohibition on broadband deployment. That question is central to the case against the September wireless order: the FCC claims its authority to preempt local property ownership is based on a federal law that says that state and local governments can’t “prohibit or effectively prohibit” broadband companies from building infrastructure or offering service.

The decision to send the challenges – there are at least nine, encompassing dozens of local governments and organisations – to San Francisco could create a bit of a mess for the next few days. The FCC’s wireless order is due to take effect on Monday. One request to put the order on hold was filed in St. Louis, and similar motions are expected from other challengers. That’s a lot of work on short notice.

Links to motions, petitions, court documents and background material, Californian and federal, are here.

Order transferring appeals of FCC “September Order” to Ninth Circuit, by Tenth Circuit, U.S. Court of Appeals

My clients are mostly California cities, including some that are directly involved in this case. I’m not a disinterested commentator. Take it for what it’s worth.

Nevada County FTTH project gets new lease on life

by Steve Blum • , , ,

Spiral event 30oct2014

Update: the CPUC unanimously approved the transfer of Bright Fiber Networks, and the $16 million CASF subsidy, to Race Telecommunications this morning.

The California Public Utilities Commission is scheduled to vote today on whether or not Race Telecommunications should be allowed to take over ownership of Bright Fiber Network, which received a $16 million subsidy from the California Advanced Services Fund (CASF) in 2015 to build an FTTH network to serve 1,900 homes near Nevada City in Nevada County.

The project was developed by Spiral Internet, a long established independent Internet service provider in California’s Gold Country. Spiral has been working to raise the necessary matching funds – $10.7 million – for the past four years, but has not been able to attract investors. If approved by the CPUC, ownership of Bright Fiber Network and rights to the CASF grant would be transferred to Race. Spiral would continue to operate its primarily DSL based ISP business.

Race brings two critical elements to the table: it has access to capital and experience building residential fiber networks in rural California. It’s received several CASF grants over the past ten years, and has what appears to be an excellent track record with the CPUC.

The project would be redesigned. Instead of laying fiber underground, as Spiral originally planned, Race would install cables on existing utility pole routes. The cost of the project to taxpayers would be $70,000 less.

Two wireless Internet service providers in the area – Smarter Broadband and ColfaxNet – filed bitter objections to the transfer of control, as they have done in the past. The draft resolution in front of the commission would reject their arguments once again.

As of last night, the resolution was on the commission’s consent agenda. Unless a commissioner asks that it be discussed and voted on separately, it’ll be approved along with several other items that are considered non-controversial in a single motion.

Tellus Venture Associates assisted Bright Fiber with preparation of its CASF grant application. I’m not a disinterested commentator. Take it for what it’s worth.

Eight essential characteristics of 5G networks defined by Verizon CEO

by Steve Blum • , , ,

Vestberg keynote ces 8jan2019

Hans Vestberg, Verizon’s CEO, did a rockstar, black t-shirt keynote at CES in Las Vegas yesterday. Vestberg took over the top spot at Verizon last year. As he often did in his former job as head of Ericsson, Vestberg offered a clear and credible explanation of what 5G networks and technology – particularly, Verizon’s – will deliver.

According to Vestberg, the five “currencies”, or defining characteristics, of 5G are…

  • Peak data rate of 10 gigabits per second. This is what the technology can deliver, the question will be whether the infrastructure and resources are deployed to support it in any given location.
  • Mobile “data volume”, aka network capacity, of 10 terabits per second per square kilometer. Again, depends on whether a given network is fully built out and provisioned.
  • Mobility. Users can connect while travelling at 500 kilometers per hour. That’s roughly 300 miles per hour and good enough for high speed trains. Not quite airliner speeds, though.
  • One million connected devices per square kilometer. That’s versus a similarly theoretical maximum of 100,000 connected devices per square kilometer for 4G networks.
  • End to end latency of 5 milliseconds. That’s at least ten times faster than what 4G networks deliver. The plain meaning of the words implies a roundtrip (end to end to end) latency of 10 milliseconds, which was also a spec Vestberg mentioned on stage.
  • Reliability of 99.999%. It’s the traditional and often attained “five nines” goal of copper phone networks.
  • Service deployment of 90 minutes. To logically configure a bespoke network, that is. One of the touted benefits of 5G technology is “network slicing”, the ability to easily create subnetworks for specialised uses such as, say, for first responders or internal organisational networks.
  • Energy efficiency of 10% of current consumption. It’s not clear if Vestberg means that individual 5G small sites will use 10% of the energy that a 4G macro site uses, which is credible, or if he’s talking about the entire network, which would be difficult to take on faith.

Verizon will only be able to hit these benchmarks, assuming it can, where 5G infrastructure is fully deployed. That means deploying a lot of small cell sites and stringing a lot of fiber to connect them.

Huawei to Intel: so long, and thanks for all the fish

by Steve Blum • , , , ,

Huawei press photo 7jan2019

The two big Chinese players – Huawei and ZTE – have a low profile in Las Vegas. The troubles that the two companies have had this past year took a toll. ZTE was shutdown for a time by the U.S. government and a very senior Huawei executive was jailed in Canada, pending extradition to the U.S. Both companies have been accused of being too cosy with the Chinese government. Neither company held their usual media extravaganzas at CES this year.

Huawei hasn’t gone into stealth mode, though. At a separate event in Shenzen, China, Huawei unveiled a ARM-based chip that’ll power a new line of servers that target the high performance data center – aka big data – market. ARM is a chip architecture that is the alternative to Intel’s venerable x86 central processing units that trace their lineage back to the dawn of the personal computer. But it’s steadily losing market share to ARM-based chips, which are the core technology inside smartphones and tablets. Qualcomm, Apple and many other companies make chips based on ARM architecture, and it has made steady inroads into the server market.

It’s not good news for Intel. According to Huawei’s press release

Huawei has long partnered with Intel to make great achievements. Together we have contributed to the development of the ICT industry. Huawei and Intel will continue our long-term strategic partnerships and continue to innovate together,“ said William Xu, Director of the Board and Chief Strategy Marketing Officer of Huawei.

”At the same time, the ARM industry is seeing a new development opportunity…We will work with global partners in the spirit of openness, collaboration, and shared success to drive the development of the ARM ecosystem and expand the computing space, and embrace a diversified computing era."

Translation: so long, and thanks for all the fish.

Intel doesn’t seem to be worried about Vogon Constructors arriving anytime soon. It offered the usual hot, new chip press release at its CES press conference yesterday.