No quick changes for Californian broadband subsidy program


Glaciers are slow, but reliably arrive.

Because it was tagged as urgency legislation and then approved by a two-thirds vote of the California legislature, senate bill 740 took effect the moment it was signed by Governor Brown. Even so, don’t expect any immediate changes to the way the California Advanced Services Fund (CASF) is managed or broadband construction subsidies are given out.

Eleven months ago, the California Public Utilities Commission began the lengthy process of changing CASF eligibility rules, under the assumption that the legislature would allow it. Even so, it’s still going to take six months to a year to finish rewriting the rules. Only then will the CPUC give cities and independent ISPs a chance to apply for CASF grants and loans.

An early draft of new rules was floated back in March. The general idea was to require something like the same level of financial scrutiny and collateral that telephone companies have to meet in order to be certified by the CPUC. The draft generated a fair number of comments and counter-comments that the CPUC administrative law judge working on the draft is still digesting.

Passage of SB 740 means the guess work ends and the CPUC can move ahead with writing rules to comply with it. The work done to date provides a good foundation, but it’s still many months from being complete.

Meanwhile, the CPUC is chewing through the CASF subsidy proposals submitted last February. If you take SB 740 at face value – it appears to reaffirm current CASF policy and practice – it should have no effect on the pending applications. But don’t bet the ranch that the incumbent cable and telephone companies that have been complaining bitterly about some of the proposals won’t try to use the new law to raise objections, legitimate or not.

Assembly bill 1299, which was also signed by the governor, doesn’t take effect until January. That gives the CPUC some breathing room to write rules for the public housing broadband programs it creates. Since it’s a relatively small amount of money – $20 million for broadband facilities and $5 million for marketing – and it has similarities with the regional broadband consortia program, writing those rules might not take so long.

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.