CPUC debates fairness of giving big broadband subsidies to tiny communities


“It’s a little frustrating that this would be one of the last places you’d expect high quality internet service, yet you have communities like Point Arena and Gualala that don’t have service at all,” said commissioner Michel Florio this morning, as the California Public Utilities Commission discussed a proposal to give a $1.8 million subsidy to Ponderosa Telephone Company to build a fiber-to-the-home system in the remote Madera County communities of Beasore and Central Camp. It would deliver 50 Mbps download and 20 Mbps upload speeds to homes that currently lack even landline telephone service.

Commissioners are wrestling with the project’s cost per home reached – somewhere between $55,000 and $11,000, depending on whose numbers you believe. Either way, it busts the CPUC’s cap – so far – of $10,000 per home for California Advanced Services Fund subsidies. The U.S. Census Bureau counts 32 occupied residences in Beasore and none at all in Central Camp but Ponderosa claims there are 159 occupied dwellings between the two areas. The Forest Service says the census figures are low but so far hasn’t endorsed the higher number. It’s clear, though, that many – likely most – of the houses in the area are vacation homes.

“The very purpose of the CASF program is to do these kinds of things,” said commission president Michael Peevey, as he pushed to move ahead with the grant. “How much more information do we need?”

At least a clearer idea of how many people actually live there, according to commissioners Catherine Sandoval and Carla Peterman. There was a fundamental concern about how to manage CASF fairly. “Many of the people paying the surcharge [that funds CASF] don’t have access to this level of service”, said Peterman.

In the end, commissioners asked staff to get better numbers and come back in two weeks. Then they’ll have to decide if the needs of people in the area justifies raising the current subsidy limit. Florio was was skeptical.

“If these are cabins where people go to get away from the city”, he said, “people may be going there to get away from the accoutrements of modern life”.

About Steve Blum

Steve Blum is president of Tellus Venture Associates, a management, planning and business development consultancy for municipal and community broadband initiatives. He is a 30-year industry veteran and an expert in developing new broadband infrastructure and services, including wireless, fiber optic and satellite systems.

His career includes playing key roles in the launch and growth of DirecTv in the U.S., as well as other satellite broadcasting platforms around the world. For the past ten years, he has helped build municipal wireless and fiber optic broadband systems. His client list includes many California cities, such as San Leandro, Palo Alto, Oakland, Los Angeles, Lompoc and Folsom. He’s a member of the executive team for the Central Coast Broadband Consortium and has worked with other regional consortia in California.

Steve is the author of seven books on the Internet and satellite broadcasting and is a frequent contributor to professional journals and industry events. He holds an A.B. in History from the University of California, Berkeley, an M.A. in East Asia Studies from the University of Washington, and an M.B.A. from the University of St. Thomas. He is a triathlete and multiple Ironman finisher, and is currently ranked in the top 100 of the Challenge Triathlon world rankings, out of more than 30,000 athletes.

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  • rconaway

    Let’s not even consider wireless technologies that could do this for about $250 per home. That would make too much sense and not fill the pockets of the politicians and companies that that steal taxpayer dollars. What’s going to happen when wireless technologies start hitting Gbps speeds over the next 2 years.

  • Gene De Bad

    If we could only expose these politicians…

  • Brandon Merritt

    I disagree with you both … we have problems with new companies who come in and try to solve a “market failure” in the towns of Gualala and Point Arena, and now that I think of it, Fort Bragg, Mendocino and any other town in Northern California, with wireless solutions that can be described as sketchy at best. Government subsidy in these cases act as market regulation to correct a market failure that leaves these Northern California economies extremely vulnerable to predatorial businesses and mindsets like yours who promise the next big wireless or satellite solution but who ALWAYS fail to deliver.

    Wireless and/or satellite internet is NOT the answer in the Northern California region simply because of our geography. The only answer in these cases is for the big companies who you want to protect to allow smaller companies to hook into their fiber networks at a cost of less
    than $7,500/month, which by the way, is what Verizon and AT&T charge right now for a hookup.

    Our demographics are just on the wrong side of the cost of doing business for a local internet service provider to hook into AT&T and Verizon’s fiber at that rate. That or give us a subsidy that is meant SPECIFICALLY FOR THIS REASON (the CASF surcharge of 0.16% on every mobile phone bill in the state), to deploy broadband infrastructure in areas of our state that are underserved because our revenues don’t meet the big guys’ ROI.