It’s up to California governor Jerry Brown, to decide whether or not to double labor costs and effectively cut broadband construction subsidies from the California Advanced Services Fund in half by requiring all projects it funds to follow union work rules and pay scales.
In lopsided votes that included both democrat and republican support, the California senate and assembly approved assembly bill 2272 last week. According to its author, assemblyman Adam Gray (D – Merced)…
AB 2272 codifies a decision already handed down by the department of industrial relations [DIR] to pay prevailing wage on projects funded by the California Advanced Services Fund.
Except the decision isn’t final, as a summary of opposing arguments points out…
Overall, opponents argue that the Legislature should not codify the DIR’s erroneous determination both in light of the pending legal arguments and because this bill would undermine a critical state public policy goal in promoting broadband deployment.
That same analysis by legislative staff pinpoints one of the reasons why…
The bill would result in unknown cost pressures, likely in the tens of millions of dollars, to the CASF as a result of increased projects costs for existing and future projects.
AB 2272 would also double the cost to grant recipients, who have to pay 30% to 40% of the increased cost as matching funds, and make them responsible for tracking and documenting all the bureaucratic details that go along with the so-called prevailing wage rules – a substantial and expensive task.
Governor Brown has until the end of September to decide whether to approve or veto the bill.
Comcast is a particularly nasty competitor at the political level, according to comments filed by CenturyLink with the FCC regarding the proposed mega-merger with Time-Warner (h/t to Fierce Cable for the pointer). Although CenturyLink claims to be the “third largest telecommunications provider in the United States”, it also points out that it’s relatively small player in TV terms – 215,000 subs in 12 markets, it says – due in part to Comcast’s unique influence and combative stance with local governments…
Comcast has been uniquely and extraordinarily aggressive in seeking to delay CenturyLink’s entry into new markets. For example, in the Denver metropolitan area, where CenturyLink is currently pursuing local video franchises, Comcast appears to be sending a similar letter to each local franchising authority [LFA] from which CenturyLink is seeking a franchise or potentially might be seeking a franchise providing Comcast’s “concerns” regarding CenturyLink’s entry into the video market. The “concerns” that Comcast has raised, while couched in terms of “fair competition,” are in reality an effort to have the LFA impose such onerous and unreasonable buildout requirements that the new entrant will not be able to obtain a franchise agreement that will support a feasible business plan….
In Colorado Springs, where CenturyLink ultimately obtained a franchise to provide video service in 2012, Comcast undertook extensive but ultimately unsuccessful efforts to have the Colorado Springs City Council impose onerous buildout requirements on CenturyLink.70 Comcast’s efforts succeeded in causing CenturyLink to spend 20 months to obtain a single franchise.
In CenturyLink’s experience, other providers have not engaged in similar conduct.
CenturyLink’s accusations have a ring of truth. Although it’s been my experience that most incumbents – large or small – will fight their corner when confronted by possible new competition, Comcast is indeed “uniquely and extraordinarily aggressive” when attempting to sway local and state agencies. Amplifying Comcast’s clout in California by allowing it to control as much as 80% of the market here would allow it to bring an intolerable level of political influence to bear on competitors.
Once I’d decided to dump Quickbooks and figured out that other self-hosted software wasn’t any more functional, I took a hard look at the online alternatives. Six alternatives – FreeAgent, FreshBooks, Wave, GoDaddy (formerly Outright), Xero and Zoho – warranted hands on testing.
My needs, I thought, are simple. I bill a relatively short list of clients on an hourly or fixed price/milestone basis, and pay expenses through a checking account, a couple of credit cards and occasionally cash out of pocket. To the extent possible I wanted all that automated, or at least require minimum monthly intervention time.
Unfortunately, no single company excels on all counts and only one, it turned out, was adequate across the board:
- FreeAgent seemed to be designed with me in mind. It’s put a lot of thought into what independent consultants need. Although I didn’t dive too deeply into it, bookkeeping capabilities seemed adequate and time tracking and billing functions were slick. It falls down on the geek side, though. It handles live bank imports well enough, but credit card transactions aren’t supported. Those have to be downloaded and imported manually. Excellent customer support, though. Very responsive.
- FreshBooks was a disappointing fail. Also very good at time tracking and invoicing, and customer support is lavish. But it’s an expense tracker, not a bookkeeping program. No way to account for payments made to yourself or credit card refunds or any of the dozens of little adjustments a proper set of books needs. It’s probably enough to keep you out of jail, if you have a good accountant, but will frustrate anyone familiar with the basics of accounting.
- GoDaddy was, well, GoDaddy. Required a credit card just to test it, logging in was the usual gauntlet of brainless upsell offers. Hardly a functional or moral upgrade from Intuit.
- Wave was the mirror image of FreshBooks. Great bookkeeping functions, can’t handle hourly billing or tracking expenses by client. In fact, one of the FreshBooks support reps suggested I try it out. Merge the two and you will have a killer platform.
- Xero is the darling of the New Zealand stock exchange, and it is indeed slick and high powered. It seems to have expended a lot of effort on building a killer set of core functions that can scale up for large enterprises, and then supports – well – a large ecosystem of third party add on services. But time tracking and hourly billing isn’t in the core, and adding a third party solution from the long list of options pushed the price out of the comfort range and needlessly increased complexity. Not built with a solo consultant in mind.
- Zoho Books did everything I needed it to do. Bank and credit card feeds work flawlessly and are easy to reconcile, particularly with the custom rules that you can set up. There’s even a journaling function that’s appropriately non-obvious – no accidental playing around with double entry bookkeeping.
The winner was Zoho Books. Price – about $20 a month – was OK, interface is simple, and the automatic functions just work. I’ve been using it for several months, and I’m very happy.
Temple of doom.
The death sentence for Quickbooks came with the release of the Mavericks version of Mac OS X. Intuit wasn’t supporting the last version I bought – Quickbooks Pro 2010 – and online account downloads stopped working. I could spend a couple hundred bucks for the 2014 version, or find a better way to manage my business. I’d already done that with my personal finances. When Intuit torpedoed Quicken for Mac, I switched to iBank, which does the job at least as well.
Intuit’s antipathy toward the Mac platform is longstanding. Windows users had online access years before the rest of the world did (I run both Mac and Linux systems for business and pleasure, and never embraced Windows or MS-DOS, although there was that brief fling with DR-DOS…). But Intuit also developed a disdain for its original business – writing and selling useful shrink wrapped software – and, in effect, turned it into a subscription business by releasing paid upgrades on an annual basis and rapidly dropping support for older versions.
The coup de grace was Intuit’s relentless campaign to keep tax filings complex and block government simplification. As Gregory Ferenstein wrote in a TechCrunch article…
Former California Senator, Tom Campbell, who felt Intuit’s power during his proposal for an easy-file system in California, wrote that he “never saw as clear a case of lobbying power putting private interests first over public benefit”.
So I was done with Intuit products and Quickbooks in particular. But what are the options? Not another shrink wrapped business bookkeeping package. The alternatives might be as good as Quickbooks – don’t mistake me, it does its job well, when Intuit allows – but not better. If I’m going to the trouble of transferring my bookkeeping to new software, I want more than just the momentary pleasure of telling an evil company to get stuffed.
Which led me to online small business accounting platforms. The leading candidates all involved annual subscriptions in the $250 range, which wasn’t a negative, given that Intuit wanted to charge me nearly as much for the privilege of managing it myself. But that’s a story for tomorrow.
Mobile broadband networks are increasingly ubiquitous throughout the world, and are the most widely used way of accessing the Internet in developing countries. But that’s despite high costs and stingy caps on data transfer. As a solution for increasing primary household access to broadband and encouraging people to use it, mobile networks have limited potential, according to a South African broadband policy study…
Of the access mechanisms, mobile coverage is the most extensive, but mobile broadband access is limited to lucrative urban areas and data costs are relatively high. Extending broadband access is dependent on allocation of high demand spectrum. It is also dependant on higher tower density, which requires additional investments by mobile operators.
The problem isn’t limited to the developing world. The California Public Utilities Commission has put itself in a similar box by, on the one hand, recognising that it’s economically difficult, if not impossible, to rely on mobile operators for household or business Internet access but, on the other, giving mobile coverage claims equal standing with wireline networks in determining which communities lack minimum service and are eligible for infrastructure subsidies.
One company – Comcast – is tightening its grip on Californian cable customers and the two biggest telephone companies – AT&T and Verizon – are cutting off wireline support for less affluent communities and pushing subscribers toward more costly mobile data. All three are spending big money lobbying California legislators and policy makers in largely successful efforts to protect their turf. If you allow incumbents to write the rules for subsidising competitive infrastructure construction – rules that relegate low income areas to high cost mobile service – you will only increase the digital divide. Whether you’re in California or South Africa.
Some Roswells understand advanced technology better than others.
The U.S. supreme court will decide whether or not to set practical limits on the ability of local governments to stall – sometimes indefinitely – cell towers and other mobile broadband infrastructure deployments. When the court reconvenes in October, it will be hearing a case brought by T-Mobile against the City of Roswell in Georgia, which denied permission to install a tower disguised as a pine tree.
The specific issue in the case is whether a local agency has to provide a written statement detailing why a particular wireless project was nixed, or can it just stamped denied on the application and leave it to others to figure out the reasons by reading through council minutes and memos. Different federal appeals courts have ruled differently, and the supreme court could pick one and leave it at that.
Or it could go beyond a simple technical ruling and address the larger issues of how rigorous local agencies must be when they reject permits for mobile facilities and how much wiggle room federal law gives them. As T-Mobile put it in its pitch to the court…
The object and policy [of federal law]…is to prevent local governments from imposing undue “impediments [to] the installation of facilities for wireless communications, such as antenna towers"…Issuing a denial of an application with no reasoning whatsoever – and thereby making the required expedited judicial review more costly and burdensome, if not downright impossible – is just one such impediment.
Roswell’s response is actually a prime example of the sort of telecoms policy micromanagement that the federal government says is its domain alone. After presenting a mangled interpretation of Moore’s Law, Roswell argues that it should keep cell towers out of town because…
Telecommunication carriers have and are working to develop better, smaller and cheaper technology to be used to increase coverage and capacity in their networks…It is more than conceivable, particularly as the infrastructure for true 4G LTE telecommunication service is put in place, that in as little as another decade multi-story cellular towers will be dinosaurs.
Presumably, the Roswell city council is OK with waiting 10 or 20 years to find out if anyone can figure out how to deploy 4G technology without towers. And live without the improved service it and its supporting fiber infrastructure can provide. Good luck with that.
A ruling in Roswell’s favor would give a blank check to local nimbys and tin foil hats. Or, depending on how far it goes, it could drop barriers to a low and uniform level, allowing broadband companies to spend money on infrastructure, rather than lawyers.
One of the useful, if frustrating, aspects of the California Economic Summit’s state capitol conference earlier this month was listening to some lawmakers defend the California environmental quality act (CEQA). It’s universally considered to be a needlessly complex and economically damaging impediment to any kind of infrastructure project. Except by environmentalists and their allies in the legislature.
The core argument in favor of CEQA in its current form is that even though it’s cumbersome, it has saved California’s signature natural assets – you get the idea it’s the only thing standing between the redwoods and a horde of chainsaw wielding loggers. And it’s true, CEQA has legitimately protected valuable resources. But it’s an indiscriminate weapon – the logic is essentially if you shoot them all, you’re sure to get the guilty.
The problem isn’t so much that the law aspires to high standards, but that it creates a battle ground for anyone to launch a never ending fight against infrastructure projects on the flimsiest basis. Any decision made by elected or appointed officials or agency staff can be taken to court on the basis of CEQA. Because of that, staff will frequently take a CYA approach up front – no one wants to be on the chopping block when challenges come in.
And it’s not always clear who takes the lead. Public agencies frequently arm wrestle over who has jurisdiction, if not for an entire project, at least for particular aspects of it. The Digital 395 project in eastern California is a case study: a $100 million fiber optic project that had to navigate more than 40 agencies and ended up exceeding its permit-processing budget by $25 million.
There won’t be any changes this year – the legislature’s term is all but wrapped up. But expect a renewed push to reform CEQA next year, hopefully, with better results.
When the California Public Utilities Commission starts accepting applications for broadband infrastructure grants later this year, there will be something like $160 available to hand out. That’s my estimate, based on the amount approved to date and expected administrative costs.
The overall cap on the California Advanced Services Fund is $315 million. Of that, $10 million is set aside for infrastructure loans, $10 million for regional consortia and $25 million for public housing projects. The remaining $270 million goes to the infrastructure grant account.
From the establishment of CASF in 2007 until now, the commission has approved $92 million in grants, not counting projects that were funded and then later canceled. Then there are administrative costs, which have been steadily rising as the CASF program grows and federal funding, particularly for broadband availability mapping, dries up.
As of the end of 2013, the running overhead total was $3.5 million. I don’t have hard figures, but based on previous cost allocations, a good, round guess is that $3 million is coming out of the grant account. Based on the CASF administrative budget approved last year, I estimated that from July of 2014 on, the total overhead hit to the grant account would be $10 million. Add in another $1 million for the first half of $2014, and the lifetime administrative bite out of CASF infrastructure grant funds is something like $14 million.
So, subtracting the $92 million in approved projects and $14 million for overhead leaves $164 million for future projects. I’m fudging a bit by pegging the range at $160 million – rounding down to allow for surprises – but that’s the range.
There are two grants still, technically, under consideration: the Bright Fiber FTTH project in Nevada County which is asking for $17 million and the $11 million ViaSat proposal. Given the CPUC’s decision to begin accepting new subsidy applications on a rolling basis in December, those two are effectively competing for the same pot of money. There might be a decision on the ViaSat proposal before the new window opens, but Bright Fiber is on hold for at least a year.
Another consideration is the proposal to kick in 10% of the cost of any approved FCC rural broadband experiment. But if California gets its share – 10% of the $100 million total, goes the argument – it would mean something like a million bucks, which doesn’t significantly change the round number estimate.
Double secret probation.
A bare sliver of light will shine on cable (and telephone) companies when they renew statewide video franchises every 10 years. The California Public Utilities Commission is considering a process that effectively shuts out meaningful public scrutiny of cable companies when they file for renewal. The CPUC’s reasoning is that in writing California’s Digital Information and Video Competition Act, usually referred to as DIVCA, the legislature set a very low bar for granting and, consequently, renewing the statewide video franchises that replaced the original city-by-city and county-by-county process in 2006.
The latest draft of the new renewal rules would allow the commission’s office of ratepayer advocates (ORA) to confidentially review applications and offer comments on whether or not the paperwork is complete. Up to a point, that means there will be a semi-independent review of the claims cable companies make regarding how well they’ve met their obligations to, among other things, build out to homes in their footprint and follow local laws regarding use of the public right of way.
But that review won’t necessarily lead to action. If an application is incomplete, a do-over process kicks in. ORA will be able to make substantive comments about how well cable companies have met their obligations, “which the Commission will not consider as part of the franchise renewal process but may lead to further action outside the renewal process”. In other words, if ORA says a cable company hasn’t met its legal obligations, the commission will grant the renewal anyway and think about it later.
Only ORA can get involved in video franchise review, and that’s because DIVCA specifically grants it “authority to advocate on behalf of video subscribers regarding renewal of a state-issued franchise”. Local governments, other advocacy groups and members of the public are shut out by the law, at least as it’s currently being interpreted.
The CPUC is scheduled to vote on the new rules on Thursday, but it’s been on the agenda several times before and bumped for further review, so changes are still possible.
The best kind goes both ways.
Call it GigaPower or GigaWeasel, AT&T is at least acknowledging that its much-hyped but little seen upgrade program needs to meet rising customer expectations for broadband speeds. And interestingly, according to a story by Sue Marek in Fierce Telecom, the company is also embracing the idea that upstream speeds are rapidly becoming at least as important to subscribers as downstream speeds…
AT&T Group President and Chief Strategy Officer John Stankey said that upstream traffic is growing at double the rate of downstream traffic thanks to so many users uploading photos and video content via social networking sites. Specifically, Stankey added that upstream traffic surges at venues such as concerts and sporting events.
GigaPower’s symmetrical capability, Stankey said, will be a differentiator against competitive services such as cable because DOCSIS 3.0 isn’t able to deliver a robust upstream due to difficulty with node splitting.
The catch, of course, is that AT&T isn’t anywhere near delivering gigabit speeds on its copper network, and likely never will. It’s managing to push, it says, 300 Mbps through some of its more modern plant, although the actual number of homes served that way is something of a mystery – a few, select neighborhoods in Austin, for example.
Years down the road, as fiber begins to reach more homes – new single single family home developments and fiber-to-the-basement deployments to multiple dwelling units in dense, lucrative urban markets – AT&T might be able to begin to make good on today’s GigaPower marketing promises for a lucky few.
But whether or not it’s backed up by reality, the fact that AT&T is moving the conversation toward the idea that high speed service needs to be symmetrical is a radical step forward. Particularly for a company that makes a habit of milking faster download speeds – 12 Mbps and above – out of crumbling copper networks by squeezing upload capacity to 768 Kbps or less.