Frontier and competitive carriers agree, at least regarding telephone service in California


Most of the issues between Frontier Communications and competitive local exchange carriers in California regarding Frontier’s proposed purchase of Verizon’s wireline telephone systems have been worked out. A settlement agreement was filed with the California Public Utilities Commission that addresses most of the objections that CLECs raised regarding the deal.

Boiled down, most of the settlement consists of Frontier saying it’ll honor Verizon’s current contracts with CLECs and keep current terms and interconnection agreements in effect for at least three years. CLECs will be able to get access to any new capacity that Frontier builds in order to stitch together the new territories it intends to acquire. Frontier will offer CLECs access to existing copper plant, or give specific reasons why it can’t do so…

Frontier will not require carriers to pay construction charges to install fiber, if working copper facilities have capacity and are available. Frontier will perform routine network modifications on copper facilities as Frontier reasonable determines to be appropriate and necessary. If Frontier denies any service request on the basis that no facilities are available, Frontier will inform the requesting CLEC of the copper facilities that terminate at the requested service location and identify the copper facilities that were tested.

The settlement also closes possible loopholes: Frontier is agreeing not to try to duck obligations by asking to be characterised as a rural carrier.

Some issues, particularly regarding Internet bandwidth and traffic, remain to be settled. In other words, Frontier isn’t backing away from its broader position that the CPUC doesn’t have the authority to get involved in regulating broadband, as opposed to telephone, service.

Decisions coming soon on California broadband bills


Not quite yet.

Sunday is the last day for California governor Jerry Brown to either veto bills passed by the legislature this summer, or allow them to become law. Amongst the measures in the big stack on his desk right now are several that will affect broadband service and infrastructure, particularly in regards to how it’s regulated.

The bill with the most potential impact is assembly bill 57, which would put teeth in the Federal Communications Commission shot clock for wireless permits. The FCC says that local governments have five months to approve or deny applications for new wireless facilities and three months to deal with changes to existing ones. When local governments miss that deadline, a wireless company can ask a court to, in effect, grant the permit. It’s a time consuming way to go about it, though, and can take as long or longer than just seeing the normal process through. So it rarely happens.

What AB 57 would do is turn the table on cities and counties, and make them go to court to stop the permit from being automatically granted. The bill sailed through the legislature with healthy bipartisan majorities, but the list of no votes grew longer as time went on. That due in great part to the vehement opposition from local governments and their lobbying organisations, who are undoubtedly applying to same to the governor.

Five other bills – AB 825, AB 1023, SB 48, SB 215 and SB 660 – make changes to the way the California Public Utilities Commission does business. SB 660 would have the biggest effect. Among other things, it would put tighter restrictions on private conversations between regulated utilities (and other interested parties) and commissioners and staff.

Typically, governor Brown has given no indication as to which way he’s leaning on any of the measures.

Charter tells New York regulators it’ll upgrade redlined residents if it’s allow to buy Time Warner


As in California, Charter Communications is asking New York state regulators for permission to buy Time Warner cable systems. New York Public Service Commission staff have identified markets where both companies operate, but have not fully built out digital systems, and are recommending, among other things, that Charter be required to upgrade all of its customers – old and new – if the deal is allowed to go through

New Charter should be required to develop a strategic implementation plan to build-out its all-digital network to the remaining unserved or under-served Charter and Time Warner franchise areas in New York. This type of substantive commitment would serve three key objectives: 1) expanding service to rural communities and other unserved areas; 2) expanding service to industrial parks and businesses; and, 3) expanding service to community anchor institutions (e.g., schools, libraries, community centers, municipal buildings, public facilities and hospitals).

The PSC’s authority to do so is based, according to the staff report, on both New York law and on the same section of federal telecoms law that’s central to California’s consideration of the deal. Not surprisingly, Charter disagrees

There is no basis for concluding that reading Section 706(a) [of the federal communications act] to empower 50 different State Commissions to assert regulatory authority over broadband service in connection with any transfer affecting broadband facilities would further the statute’s goals of encouraging removing barriers to infrastructure or encouraging deployment of advanced telecommunications capability. To the contrary, such a circumstance would be flatly inconsistent with the Federal scheme of broadband regulation reaffirmed by the FCC in the Open Internet Order…

The prospect of 50 different State Commissions regulating broadband service via transfer authority creates precisely the type of conflicting regulatory patchwork the FCC sought to avoid, and would clearly deviate from Federal policies aimed at establishing a comprehensive national framework for broadband service.

Nevertheless, Charter did promise in its reply to upgrade an analog-only cable system that it currently operates in New York so that residents “receive the same benefits of all-digital systems that New Charter intends to bring to all other Charter and TWC customers in the State”. That promise is exactly what people in California communities also redlined by Charter are seeking.

New CPUC rules spell out proper behavior for commissioners


No chewing gum, either.

Follow the law, do your job and be polite. That’s the boiled down substance of most of a six page code of conduct that was approved last week by the California Public Utilities Commission. It applies to the commissioners themselves and they voted unanimously in favor of it, after developing it in committee meetings over the past few months. The document repeatedly admonishes commissioners to be respectful, to be civil and professional, and to “refrain from belligerent comments, shouting, or actions that could be construed as threatening or intimidating”.

On the one hand, you’d think that sort of advice goes without saying, at least outside of a first grade classroom. On the other, the commission is trying sooth feelings in Sacramento and elsewhere after twelve years of the often arrogant attitude and combative demeanor of former president Michael Peevey. He’s facing the possibility of criminal charges, because of what appears to be a consistent pattern of back channel dealings with some of the utilities the commission regulates. According to emails that were made public, one incident involved asking PG&E for a $100,000 contribution to help pay for a 100th birthday party for the commission.

That kind of arm twisting is now forbidden…

Even as Commissioners are frequently active in community organizations and charitable activities, they should refrain from soliciting political, charitable, or other financial support, business, or other favors from Commission staff, employees of regulated entities, parties to Commission proceedings, or entities seeking to do business of any kind with the Commission, where such solicitations could be perceived as an attempt to influence behavior or are directly related to matters before the Commission.

The new code of conduct barely touches on the broader issue of when commissioners can have private conversations with people involved in disputes or regulatory issues that are on the CPUC’s agenda, also known as ex parte contacts. Those rules could become more restrictive soon, depending on what governor Brown does with a handful of bills currently sitting on his desk.

Don’t put all your fiber in one conduit, study says


A study by four researchers – Ramakrishnan Durairajan, Paul Barford, Joel Sommers and Walter Willinger – comes to the conclusion that the more conduit is shared by different fiber optic network operators, the greater the risk of disruption, essentially due to the fact that one careless backhoe operator can take out several key routes all at once. It’s a counter-argument, they say, to those (such as myself) who push for policies that encourage installing as much and as many fiber strands as possible any time a street is cut open

A striking characteristic of the constructed US long-haul fiber-optic network is a significant amount of observed infrastructure sharing. A qualitative assessment of the risk inherent in this observed sharing of the US long-haul fiber-optic infrastructure forms the second contribution of this paper. Such infrastructure sharing is the result of a common practice among many of the existing service providers to deploy their fiber in jointly-used and previously installed conduits and is dictated by simple economics—substantial cost savings as compared to deploying fiber in newly constructed conduits…

We show that both robustness and performance can be improved by deploying new fiber routes in just a few strategically-chosen areas along previously unused transportation corridors and [right of way (ROW)], and we quantify the achievable improvements in terms of reduced risk (i.e., less infrastructure sharing) and decreased propagation delay (i.e., faster Internet). As actionable items, these technical solutions often conflict with currently-discussed legislation that favors policies such as “dig once“, “joint trenching” or “shadow conduits" due to the substantial savings that result when fiber builds involve multiple prospective providers or are coordinated with other infrastructure projects (i.e., utilities) targeting the same ROW.

They’re right, in that you can have too much of a good thing. Their paper is very valuable, both for the mapping work they’ve done, and for the quantitative analysis techniques they bring to high level fiber network planning.

Federal broadband funding guide is mostly old news


A new booklet published by the National Telecommunications and Information Administration outlining ways to finance broadband projects contains no surprises. It’s a summary of federal programs that fund, or might fund, broadband infrastructure and it’s useful as a reference. But there’s no new money on the table, and many of the programs listed are either restricted in scope – Appalachia or tribal areas, for example – or are narrowly focused on specific users, such as libraries or public housing residents.

The list is also heavily weighted toward rural areas, which are served by federal programs that tend to ignore California. The best opportunities for urban infrastructure support comes from either the Economic Development Administration (EDA) or a few indirect money sources, such as the E-rate program for schools and libraries, which provide operating subsidies that might be spent with new service providers. As far as EDA is concerned, though, it’s good news that there’s a clear statement that broadband is moving up the priority list…

EDA’s mission is to lead the federal economic development agenda by promoting innovation and competitiveness, preparing American regions for growth and success in the worldwide economy. Given that broadband is an important ingredient in economic development strategies, EDA funding may be used to support broadband infrastructure projects under EDA’s Public Works and Economic Adjustment Assistance competitive grant programs, within certain parameters.

One troubling aspect is that the list of broadband-friendly federal programs in the booklet is shorter than the report published by the white house a couple of weeks ago. For example, it doesn’t list the agriculture department’s rural community facility program that was highlighted in that report and accounted for about a quarter of the $10 billion that the white house claimed was available for broadband infrastructure projects.

The booklet is a nice resource for beginners, but if you’re already actively involved in trying to develop broadband infrastructure, it’s not nearly as helpful as you probably want.

Wireless local loop is looking faster, says AT&T


Might work fine here.

AT&T is starting to position its wireless substitute for wireline broadband service as able to meet the Federal Communication Commission’s 25 Mbps download and 3 Mbps upload standard. According to a story in FierceWireless

AT&T said it is currently testing fixed wireless local loop (WLL) technology in select areas of the country with local residents who want to try the service, including in Alabama, Georgia, Kansas and Virginia, and is seeing speeds of around 15 to 25 Mbps.

Up until now, AT&T had only said that it expected speeds for it calls wireless local loop (WLL) service to top out in the 15 Mbps to 20 Mbps range. It uses mobile broadband infrastructure and technology, along with professionally installed equipment on customers’ homes, to deliver service via what it says will be 20 MHz of dedicated spectrum, evenly split between upload and download segments.

WLL service figured prominently in AT&T’s acceptance of $2.6 billion in FCC subsidies to serve rural areas. According to an SEC filing (thanks again to FierceWireless for the link), WLL capacity is limited and it’s suited for areas with 250 or fewer people per square mile. In California that pretty much rules out cities and larger towns in rural areas, but it could include smaller, unincorporated communities. Farm and ranch land population densities, though, usually fall far below that limit.

The SEC filing makes it clear that not everyone can expect 15 Mbps to 25 Mbps. At the edge of coverage, 10 Mbps is more likely, although not certain, depending on how heavily it’s being used at a given moment.

FCC muni preemption decision could limit California broadband oversight


CPUC’s broadband authority depends on federal law.

Tennessee and North Carolina are challenging the FCC’s ruling earlier this year that preempted state restrictions on municipal broadband. The central argument is whether congress gave the FCC sufficient authority to override what is usually reckoned to be the ironclad state responsibility of telling local governments what they can and can’t do. The FCC based its ruling on section 706 of the telecommunications act of 1996, which says…

The Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans…by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.

There are two ways to read that section. Telecoms companies argue that it’s intended to guide how the FCC and state regulators, including the California Public Utilities Commission, implement more specific sections of the law. In other words, it only offers advice and does not grant any additional authority.

In the muni preemption ruling and other decisions, the FCC has – recently, at least – taken the words of the law at face value and declared that it actually grants wide ranging power to do pretty much anything that removes “barriers to infrastructure investment”. That assumption was tested once at the federal appellate level, when Verizon successfully challenged the FCC’s first attempt at imposing net neutrality rules in 2010. Even though the FCC lost (on other grounds), the decision in that case generally supported the commission’s reasoning regarding section 706, but left open the question of the full extent of its authority. The FCC accepted the decision, so it never got to the U.S. supreme court.

The Tennessee case is another opportunity, at either the appeals or supreme court level, to define the limits of section 706. If the ultimate decision takes a narrow view, it will curtail the wide ranging regulatory review that the CPUC is taking of major broadband transactions, like those proposed by Comcast, Frontier and Charter. The CPUC needs section 706 to justify using broadband considerations as criteria for approval: without federal authority, state law bars it from getting involved with Internet services.

Charter CFO paints rosier than real merger schedule for investors


Sure, dude. How fast do you want it?

You gotta love optimists. Christopher Winfrey, the chief financial officer of Charter Communications, is telling investors that the proposed purchase of Time Warner Cable and Bright House Networks will be done and dusted by the end of the year. That jet propelled schedule is fuelled by the assumption that the Federal Communications Commission and the California Public Utilities Commission know everything they need to know already, because it’s the same bunch of companies that were involved in the failed Comcast mega-merger, minus Comcast.

According to a story in FierceCable

“Regulators have had the vast majority of the information from Time Warner Cable and Charter for the last year and a half,” Winfrey said at the Deutsche Bank Leveraged Finance Conference, remarking on disclosures that were part of the earlier review of Comcast’s failed attempt to acquire TWC.

“We learned what were some of the key drivers for why Comcast didn’t close,” Winfrey added. “And we were able to come out very quickly and address a bunch of issues that were in the public interest.”

The problem is, he’s wrong. The FCC’s nominal timeline calls for a decision by early March 2016, if there are no delays, which would be unusual. And there’s no guarantee, of course, that the answer will be yes.

Moreover, the FCC clearly doesn’t think it has enough information. It sent a 58-page, tightly typed request for information to Charter, along with 19 additional attachments, and asked for nearly as much from Time Warner and Charter.

The CPUC appears headed down the same path, with the potential for taking even longer to decide whether to approve the deal. At a hearing on Monday, Charter proposed a schedule that would lead to a decision by mid-December. The administrative law judge hearing the case did not seem enthused by the idea. The pack of lawyers representing the three companies eventually suggested a February 2016 deadline, but even that’s ambitious.

I’m assisting the City of Gonzales with its effort to upgrade broadband service via the CPUC’s review of the Charter-Time Warner-Bright House deal. I am not a disinterested commentator. Take it for what it’s worth.

No surprises as CPUC begins review of Charter-Time Warner-Bright House deal


Charter Communications is asking the California Public Utilities Commission for permission to buy cable systems belonging to Time Warner and Bright House Networks. Yesterday saw the opening round of wrangling over the transaction, with a CPUC administrative law judge hearing from lawyers representing the companies involved on the one side, and representatives from the CPUC’s office of ratepayer advocates, consumer lobbying groups and a couple of cities on the other (full disclosure: one of those representatives was me).

Charter claims that the merger will bring great benefits to everyone in its prospective new service area, particularly because of the wonderfulness of its broadband service. Except that not everyone in its service area – old or new – can get broadband access from Charter. The company has redlined tens of thousands of low income people in California, leaving them with just low quality, analog television service. That includes the City of Gonzales in the Salinas Valley, which asked for and received permission to become a party to the proceeding.

According to its formal motion…

The City of Gonzales intends to request the California Public Utilities Commission condition the pending action to insure the intent of DIVCA is met, correct the record regarding the extent of Charter’s broadband Internet access service footprint and condition the pending action on a binding requirement that Charter immediately upgrade all of its analog and otherwise substandard systems to be capable of providing broadband Internet access service at the same level of service it misleadingly claims to offer to “virtually all of its current customers in California.”

Charter’s attorney pushed the judge for quick approval, saying that there really isn’t much for the State of California to worry about since the major issues will be thrashed out at the Federal Communications Commission. Not surprisingly, there was fast and emphatic disagreement from people on the other side, who offered essentially the same arguments made in opposition to Comcast’s failed mega-merger earlier this year: the deal is potentially anticompetitive, it could have negative consequences for consumers and, critically, that state and federal law allow, if not require, the CPUC to consider a wide range of factors in its eventual decision, including the impact on broadband service in California.

No decision was made, nor was one expected. The judge did order Charter to pay for an evaluation of the deal’s effect on broadband competition in California. The next step will be to set a timeline for the process, which is expected to last well into next year.

I’m assisting the City of Gonzales with its effort to upgrade broadband service for all its residents. I am not a disinterested commentator, and I’m also guilty of quoting some of my own work above. Take it for what it’s worth.