Golden Bear fiber plan not sturdy enough to survive incumbent challenges

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The two thousand mile, $120+ million Golden Bear middle mile fiber network is officially dead. Snaking through the canyons and river valleys of far northern California, the project was touted as a way of bringing fast, inexpensive backbone connectivity to areas far removed from bandwidth-rich regions to the south.

Effectively, backers were asking for 100% grant funding from the California Advanced Services Fund (CASF). Nominally, the limit is somewhere between 60% and 70%, depending on the level of broadband service, if any, that is available. There’s at least some support on the commission for popping that limit, at least for a middle mile project that lights up economically disadvantaged areas, such as the Sunesys proposal in the Salinas Valley. But the rules also limit funding to areas where residents can’t get service that hits 6 Mbps download and 1.5 Mbps upload speeds, and there’s little enthusiasm for subsidising fiber builds on routes where it’s already available.

Golden Bear failed on both counts. According to a story in the Santa Rosa Press-Democrat, a flood of challenges from incumbent service providers such as AT&T, Verizon, Comcast and others forced the original plan to be scaled back to the point where it didn’t make technical or economic sense, so the backers pulled the plug.

There were other problems with the proposal, not least the lack of skin the backers were putting in the game. Originally, the applicants asked for $119 million from CASF to pay what was positioned as 90% of the cost of building about a thousand miles of fiber and leasing another thousand. But it soon became apparent that the 10% match was conceptual: in kind contributions at best. Although details were closely held, the total cost to CASF was believed to have climbed into the $140 million range.

It’s not a total failure, though. Past experience with grand fiber plans that don’t fly on the first try shows that the technical and business planning done and community support gathered can be leveraged for incremental, rational projects. To paraphrase Winston Churchill, it’s not the end or even the beginning of the end, just the end of the beginning.

Tellus Venture Associates assisted with several CASF proposals in the current round, including the Sunesys middle mile project, so I’m not a disinterested commentator. Take it for what it’s worth.

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.

  • Fred Pilot

    “But the rules also limit funding to areas where residents can’t get
    service that hits 6 Mbps download and 1.5 Mbps upload speeds, and
    there’s little enthusiasm for subsidising fiber builds on routes where
    it’s already available.”

    This is a major shortcoming in how the CPUC is administering the CASF. It makes no sense to treat Internet service like a energy utility that is based on delivery of measured units of energy (kilowatt hours). The Internet provides various types of communications and information services and doesn’t lend itself to a consumption-based model used in energy and water utilities. As such, it also makes no sense to define a minimum level of service based upload and download speeds that are predicated on treating Internet communications as a limited commodity like energy and water utilities.

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