With the stroke of a pen, governor Jerry Brown transformed the California Advanced Services Fund (CASF) into a piggy bank for AT&T and Frontier Communications. Carve outs for federally subsidised service areas and the right of first refusal on unserved areas give them an opportunity to claim CASF money for the projects they want to do, and block independent projects virtually everywhere else in their service areas.
Going forward, two questions need to be answered: what will happen to pending CASF infrastructure grant applications and how will the California Public Utilities Commission implement the new rules?
Earlier this year, the CPUC went through a preliminary information gathering exercise, in anticipation of assembly bill 1665 becoming law. No conclusions were reached, but one can hope that action will come faster than the 14 months it took to get from the last legislative rework of the CASF program to the first applications accepted under it. Technically, that application window is still open and a project proposal could still be submitted but, given that AB 1665 took effect immediately, there’s no clear path for review and approval.
The same is true for the four pending CASF grant applications. One, in the Kennedy Meadows area in the southern Sierra was submitted by the Ducor Telephone Company is on reasonably firm ground, at least from a statutory perspective. Ducor is a small rural incumbent telco, and has the same rights as Frontier and AT&T in its very limited service area.
But the other three – Surfnet in Santa Cruz County, Renegade in Santa Barbara County and the second phase of the Connect Anza project in Riverside County – are less certain. Past practice indicates that those applications should be evaluated under the rules in effect when submitted. But all three are, to one extent or another, in Frontier’s newly protected service area. Frontier tried to stop a San Bernardino County project by falsely claiming 1. they would have the entire area upgraded by August (they didn’t) and 2. that protecting federally funded areas was already California policy (it wasn’t); it is safe to assume that opposition to the pending projects will be just as fierce and disingenuous.
The only certainty is that nothing will happen quickly. Two of those projects – Surfnet and Ducor – have been stuck in the evaluation process for more than two years, despite a CPUC time limit of three and a half months for such reviews.
The days of big, state-subsidised independent broadband projects are over in California.
The era of state-subsidised independent broadband projects is over in California. It ended Sunday night when governor Brown signed assembly bill 1665 into law, with immediate effect.
AB 1665 added $300 million to the California Advanced Services Fund (CASF) specifically for infrastructure subsidies, but drastically changed the way the money can be spent. It’s messy and meandering, like most pork laden bills, but the key elements are:
- The money has to be spent in areas where broadband service is available at less than 6 Mbps download and 1 Mbps upload speeds. A small fraction of the money might go to areas with 10 Mbps down/1 Mbps up in the future, but the critical number is the 1 Mbps up. That’s the limit for AT&T’s and Frontier’s ageing 1990s DSL systems in rural communities.
- Even then, telcos, cable companies and wireless operators will be able to exercise an annual right of first refusal and block projects in areas that would otherwise qualify for funding. There’s a nominal requirement that whoever blocks projects has to upgrade service, with the help of CASF money of course, but loopholes allow delays that are long enough to kill any independent project that’s on the drawing board.
- AT&T and Frontier will have the exclusive right to CASF money in areas where they’ve accepted federal subsidies under the Connect America Fund program, at least until mid–2020. The census blocks that have been awarded those federal subsidies are scattered in checkerboard fashion across rural California, effectively killing the business case for independents to expand in whatever CASF-eligible areas might be left.
- Individual homeowners may apply for means-tested grants to pay some of the cost of building line extensions to their property. As a practical matter, it means cable companies, like Comcast, that have line extension charges built into their business models will be able to tap up to $5 million from CASF to get to homes that are just outside of their existing service areas.
- By the California Public Utilities Commission’s estimate, the number of CASF-eligible households will plunge from 300,000 to 20,000. I’ve run the numbers too, with similar results: regardless of which assumptions you use, eligibility will drop from hundreds of thousands of homes to tens of thousands.
Most, if not effectively all, of those homes will be reserved for AT&T and Frontier. The game is egregiously rigged in their favor. Such hope as might be left rural California can be found in the words of Robert A. Heinlein:
Certainly the game is rigged. Don’t let that stop you; if you don’t bet you can’t win.
Nobody says it like Linda.
Just before the clock hit midnight last night, California governor Jerry Brown signed assembly bill 1665 into law, but vetoed senate bill 649.
AB 1665 takes effect immediately. It lowers California minimum broadband service standard to 6 Mbps download/1 Mbps upload speeds and adds $300 million to the California Advanced Services Fund for broadband infrastructure, to be spent under rules will give it to AT&T and Frontier in exchange for token upgrades. That they would, in most cases, be making anyway.
Unless the legislature overturns Brown’s veto – an unlikely scenario – SB 649 is dead. It would have forced cities and counties to lease streetlights and other vertical infrastructure to wireless companies at a price far below market value, and would have given them open access to most other publicly-owned property.
In his veto message, Brown said making it easier to deploy wireless technology was a worthy goal, but SB 649 was tipped too far in favor of wireless companies…
There is something of real value in having a process that results in extending this innovative technology rapidly and efficiently. Nevertheless, I believe that the interest which localities have in managing rights of way requires a more balanced solution than the one achieved in this bill.
Brown is setting the stage for another attempt next year. It’s a safe bet that it’ll happen. Getting access to street light poles and traffic signals, among other things, and rolling back the ability of local governments to manage permits for wireless infrastructure is a top priority of telecoms lobbyists. Particularly mobile carriers, but also wireline telcos and cable companies that see wireless technology as a way of supplementing their existing service.
Or in the case of Frontier and AT&T, using it as an excuse to downgrade infrastructure by ripping out rural copper networks and replacing them with fixed wireless systems that, at best, will arguably meet the new, lower service standards approved by Brown.
Forty years ago, when Jerry Brown was in his first term as California’s governor and I was a cub reporter covering the capitol, he had a reputation for agonising over his legislative decisions right up to the last minute. As he went on to a second term, and then a third and fourth, he and his office became more disciplined and efficient, and usually finished working through the stack of bills sent by the legislature with time to spare.
Not so this year. I can only speculate, but it doesn’t take much of a crystal ball to see that a week of the worst fires in California’s history would throw even the most meticulous work plan out the window.
So, we’re still waiting to learn what will become of assembly bill 1665 and senate bill 649, two major broadband bills written by lobbyists representing deep pocked telephone and cable companies, and passed with varying degrees of enthusiasm by the California legislature.
Brown’s office issued a legislative update late this afternoon, listing which bills had been signed into law and which were vetoed. Neither AB 1665 or SB 649 were on it. But as the deadline nears, the proportion of vetoed bills tends to go up, and this year is no different: 31% of the bills on this afternoon’s list were vetoed, versus 26% yesterday and 25% the day before. It’s very possible Brown could veto both.
Or he could do nothing and let them become law automatically at the stroke of midnight, two hours from now.
His office might or might not put out another update tonight. Even though the decision will be made, by action or default, we might not get positive confirmation until sometime tomorrow.
It’s still a waiting game.
Governor Jerry Brown signed 40 bills into law yesterday, and vetoed 14 more, but didn’t act on the two major pieces of broadband legislation sitting on his desk: assembly bill 1665, which would lower California’s minimum service standard to 6 Mbps download and 1 Mbps upload speeds, and senate bill 649, which preempts local ownership of street light poles and other vertical infrastructure.
He did approve AB 1145 which gives cable companies public money reserved for public utilities, without public utility obligations.
If he doesn’t act by midnight tonight, the bills automatically become law.
**Update, 15 October 2017, 0754**: no decision yet on AB 1665 or SB 649. Governor Brown signed AB 1145 into law yesterday.
There are two significant broadband-related bills remaining on governor Jerry Brown’s desk, and one relatively minor one, and he’s leaving them until the last minute. For each, he must choose one of three options by 11:59 p.m. Sunday:
- Sign it into law.
- Veto it.
- Do nothing and let it become law automatically Monday morning, at the stroke of midnight.
The two big ones are assembly bill 1665 and senate bill 649. AB 1665 would lower California’s standard for acceptable broadband service to 6 Mbps download and 1 Mbps upload speeds. It also sets aside $300 million for infrastructure deployment under rules that all but guarantee that the money will go to AT&T and Frontier Communications in exchange for minimal service upgrades that they would, in most cases, be doing anyway.
SB 649 is potentially an even bigger gift of public assets to telecoms companies. It requires local governments to lease out vertical infrastructure in the public right of way – streetlight poles, traffic signals and pretty much anything else that sticks up in the air – to wireless companies for $250 a year. That’s below – far below, in some cases – the market rate in most California cities. It also requires cities and counties to lease out other property, whether they want to or not, and prunes back their already limited discretion over where wireless infrastructure can be installed.
Then there’s AB 1145. It gives cable companies access to payments from local government for utility undergrounding projects, without requiring them to meet the obligations that normally fall on a public utility. Cable industry lobbyists also managed to get some deal sweeteners slipped into AB 1665 and SB 649 – cash is king, and Comcast, Charter and friends give a lot of it to California lawmakers. As do AT&T and Frontier.
On the other hand, Brown is hearing from a growing list of opponents) to AB 1665, and nearly every California city and county has gone on record against SB 649. The political heat is rising.
Guessing which way Brown will decide to go is a long running, and frustrating, game in Sacramento. The only thing we know for sure is that we don’t have long to wait.
As we’re waiting for governor Jerry Brown to decide the fate of the two big broadband bills of the 2017 California legislative session – assembly bill 1665 and senate bill 649 – it’s a good time to take a quick look at some other relevant legislation he’s approved.
Brown signed SB 19 and SB 385 into law. Together, those two bills reorganise some of the California Public Utilities Commission’s responsibilities, although telecommunications oversight was left untouched.
He also okayed AB 1034, which would restrict the ability of government agencies to cut off telecommunications services. It’s an issue that’s arisen during protests, when agencies – BART is the example – shut down cell service as a means of crowd control. Now, that can only be done with a judge’s order or in an “extreme emergency situation that involves immediate danger of death or great bodily injury”.
Although its applicability to broadband service is certain to be challenged, Brown approved SB 313. Among other things, it makes it illegal for a business to…
Charge the consumer’s credit or debit card, or the consumer’s account with a third party, for an automatic renewal or continuous service without first obtaining the consumer’s affirmative consent to the agreement containing the automatic renewal offer terms or continuous service offer terms, including the terms of an automatic renewal offer or continuous service offer that is made at a promotional or discounted price for a limited period of time…
A consumer who accepts an automatic renewal or continuous service offer online shall be allowed to terminate the automatic renewal or continuous service exclusively online, which may include a termination email formatted and provided by the business that a consumer can send to the business without additional information.
Anyone who has tried to figure out how much broadband service really costs, after promotional packages expire, or tried to cancel it, will appreciate this bill.
PG&E has revealed more details about its telecommunications business plan. In testimony filed with the California Public Utilities Commission, as it seeks permission to expand its telecoms service offerings, PG&E reiterated that it has no intention of offering residential fiber to the home service, or otherwise competing in the retail space. But its motivation for providing “lit” fiber service to wholesale customers appears to be greater than previously assumed. And so is its interest.
Right now, PG&E is leasing dark fiber – bare strands of glass – to a few customers, either fiber it installed on its own poles, towers and conduit for its own use, or installed at a telecoms company’s request (and expense). There’s not much more of that inventory available, though. Of the 2,600 miles of cable it owns, only 1,000 miles has spare capacity that might be leased out. On average, that spare capacity amounts to only about 4 fiber strands, enough to offer two customers a pair of dark strands each.
Although it doesn’t make a direct connection to this very restricted dark fiber supply, PG&E clearly states that it intends to move up the value chain and offer lit fiber service. Which would allow it to serve many customers on a single pair of fiber strands…
PG&E proposes to offer “lit fiber” and other services (as market demand and availability of PG&E facilities allows) to third-party communication services providers, communication companies, and large institutional (wholesale) customers that need point-to-point services along routes where PG&E can make lit fiber available. Lit fiber is fiber optic cable that has electronic equipment (such as transmitters and regenerators) connected to it to “light” the fiber, enabling the transmission of data. In providing lit fiber, PG&E would be the service provider, owning and maintaining the equipment to light the fiber. The customers would be free of the maintenance and operation of the equipment. This contrasts to the dark fiber services that PG&E currently provides where the customers are responsible for providing and maintaining the equipment that lights the fiber.
Mobile carriers and infrastructure companies are called out as particularly good prospects. PG&E sees a sweet spot in providing long haul connectivity, via lit fiber, to mobile and other telecoms companies that need to tie a lot of far flung locations into their core networks.
Governor Jerry Brown has two weeks to decide if California’s broadband speed standard should be slower than it is now, and if the California Advanced Services Fund should be turned into a piggy bank for AT&T, Frontier Communications and the cable industry. That’s what assembly bill 1665 would do, if Brown allows it to become law.
He’s getting plenty of encouragement to sign it, from the California Emerging Technology Fund and, one might safely assume, the platoon of lobbyists that telephone and cable companies maintain in Sacramento and back with generous cash contributions to politicians of both parties. Of course, the payments these companies make – which the chief counsel for the state’s ethics agency once described as “kind of legalised bribery” – would be dwarfed by the $300 million that AB 1665 sets aside for them.
There are groups asking the governor to veto the bill, too. The Central Coast Broadband Consortium sent an opposition letter (full disclosure: I drafted it). The North Bay North Coast Consortium sent one too, signed by Mendocino County supervisor Dan Hamburg…
AB 1665 was to re-authorize this vital and popular state broadband program, and we worked hard this year to find a sponsor and bring this bill forward after 2 failed prior attempts. A large coalition of groups came to support the “Internet For All Now” act and momentum was gained. Unfortunately, when the incumbents saw that they could not stop this bill, they were able to insert one damaging amendment after another, each worse than the last, so that eventually the original intent of the bill was lost and now our state broadband program is a give-away to the large incumbent carriers and makes it virtually impossible for the independent providers to get funded. The loss of competition that will result from this bill will be extremely damaging to California’s future.
The California Public Utilities Commission hasn’t taken a public stance on AB 1665, but a strong indicator of where commissioners might lean on it can be found in a Federal Communications Commission filing they unanimously approved on Thursday. They recommended that the FCC keep its current 25 Mbps download/3 Mbps upload speed standard in place.
That’s quite different from lowering California’s minimum speed standard to 6 Mbps down/1 Mbps up standard, as AB 1665 would do.
The latest draft of the California Public Utilities Commission’s broadband advice to the Federal Communications Commission specifically calls out speed as a key benchmark, and recommends that the standard for advanced telecoms capability remain 25 Mbps download and 3 Mbps upload.
The first draft ducked the speed issue and focused on other metrics such as latency and dropped connections. Which are important, particularly for high end commercial and industrial applications. But speed matters and the comments that CPUC commissioners are scheduled to consider at their meeting later this morning put it at the top of the list…
The 25/3 speed tier, the FCC’s current benchmark for “Advanced Services,” represents a useful, reasonable, and forward-looking dividing point to define a “high-speed” broadband tier. We note that higher speeds improve the performance of video streaming services from companies like Netflix and Amazon, as well as live-video feeds from companies like Facebook and Twitter. While Netflix recommends a five Mbps connection for high definition video streaming, households that include multiple end-users using multiple devices to access multiple services at the same time may find that download speed inadequate.
A significant justification cited by the FCC in its 2015 Broadband Progress Report, in creating the new 25/3 benchmark, was that households may be comprised of multiple individuals using multiple devices. The FCC has periodically raised the minimum bandwidth for “Advanced Services” over the last decade, and it is reasonable to anticipate that “Advanced Services” will not be static in the next decade. Fixed providers (especially cable providers) are already routinely offering speeds substantially in excess of the 25/3 benchmark.
Recommendation: The CPUC should inform the FCC of its findings…and recommend that at a minimum the FCC maintain its 25Mbps/3Mbps speed benchmark for fixed advanced telecommunications capability.
It’s an important message, both for the FCC, which is considering dumbing down the standard to please telecoms lobbyists and for governor Brown, who has a bill sitting on his desk – assembly bill 1665 – that would lower California’s speed standard to 6 Mbps down/1 Mbps up. Also at the behest of big
campaign contributors telephone and cable companies.