Tag Archives: cpuc

Frontier, cable lobbyists urge CPUC to cut them in on public housing, broadband adoption decisions


Big telco and cable interests accounted for two of the fourteen organisations that commented on proposed changes to the California Advanced Services Fund’s (CASF) broadband subsidy program for public housing and the new digital literacy and broadband access grants that’ll be available later this year. Frontier Communications and cable lobbyists submitted their remarks on Friday. AT&T was silent.

The California Cable and Telecommunications Association (CCTA), which is the lobbying front for Comcast, Charter Communications and other cable companies in California, wants the CPUC to better protect its members’ monopoly business model in public housing communities. Changes in the law – pushed by CCTA and cable company lobbyists – make it impossible to use CASF grants to install free WiFi in public housing properties where there’s cable service. Cable companies do offer low cost Internet service to people who qualify, as most, if not all, those who live in public housing do. But they also use those programs as opportunities to up sell residents into expensive, market rate TV (and broadband and phone) bundles.

To make sure that Charter and Comcast and the others can defend those walled gardens, CCTA’s comments recommend that the CPUC allow greater opportunities to challenge public housing grant proposals, even to the extent of knocking applications off the current fast track review process simply by raising “legitimate concerns”. Which can mean pretty much anything. Including digging around to see if applicants are using cable connections to feed WiFi hotspots, which is another of CCTA’s peeves.

Frontier’s comments can summed as give me the money. One recommendation is that adoption programs should be tied to, or at least prioritised for, CASF infrastructure projects. Which is convenient because last year’s legislative changes largely limit those grants to Frontier and AT&T. Other recommendations go sideways from there, asking the CPUC to hurry up and approve Frontier’s infrastructure project subsidies.

Reply comments – rebuttals or otherwise – are due 2 April 2018, and the CPUC is expected to decide how to move forward with the public housing and adoption grant programs sometime in June.

People who live in public housing deserve equal treatment from California broadband subsidy program


Public housing property owners can get grants from the California Advanced Services Fund (CASF) to install broadband facilities and serve residents. Hundreds of communities have taken advantage of it, despite churlish opposition from cable companies, particularly Charter Communications. The California Public Utilities Commission is revising the program, to bring it into line with new rules laid down by assembly bill 1665 last year.

The biggest change is to retroactively enforce restrictions, imposed by an earlier measure, senate bill 745, that require properties receiving grants to be “unserved”, which means that at least one residence lacks service at 6 Mbps download and 1 Mbps upload speeds. That was done at the behest of cable lobbyists, who want to protect their turf, and the pricey TV and Internet bundles they sell on it, from the horrors of free WiFi.

It was a bad decision – one of many made by the legislators who voted for AB 1665 and the organisations, particularly the California Emerging Technology Fund, who backed it. But it’s a done deal and the CPUC has no choice but to adapt.

One change the CPUC should make is to raise the standard for subsidised broadband service in public housing communities that do qualify under the new rules. Right now, the CPUC allows subsidised public housing broadband projects to deliver download speeds as slow as 1.5 Mbps, with no requirement for upload performance. As I wrote in the formal comments I drafted for the Central Coast Broadband Consortium and submitted to the CPUC on Friday, that’s not enough…

Californians who live in [publicly supported communities (PSCs)] have the same needs as Californians living elsewhere. Assembly bill 1665 set a minimum of 10 Mbps download and 1 Mbps upload speeds for CASF- funded infrastructure projects. This level of service is below the 25 Mbps download/3 Mbps upload advanced services standard established by the Federal Communications Commission, adopted by the U.S. Department of Agriculture for its broadband funding programs, and contemplated by the U.S. Department of Housing and Urban Development for its PSC broadband program. The CCBC recommends establishing the minimum speed standard for PSC facilities at the same 10 Mbps down/1 Mbps up level that is required for other CASF-funded infrastructure projects, and establishing a priority for projects that meet the 25 Mbps down/3 Mbps up standard.

Thirteen other organisations submitted comments on Friday, including public housing organisations and the California cable industry’s lobbying front. You can find them all here. Rebuttal filings are due in two weeks.

Comments on proposed changes to California’s broadband subsidy program posted


Fourteen organisations offered comments on Friday regarding California Advanced Services Fund (CASF) grant requirements and application procedures for public housing broadband facilities and for broadband adoption efforts, which are generally reckoned to be digital literacy classes and “broadband access” programs – i.e. computer centers, hotspots and free computers – programs. Suggestions for how the CASF broadband infrastructure loan program should be wound down were also submitted.

The new adoption grant program, and the revisions to the public housing and infrastructure loan programs were mandated by assembly bill 1665, which was approved by the California legislature and signed into law last year. It also made drastic changes to the way CASF subsidises broadband infrastructure projects, making independent broadband projects all but impossible to pursue and effectively turning the new $300 million account into a piggy bank for AT&T and Frontier Communications. Those new rules will be written later this year.

I’ll have more to say later about Friday’s filings. Full disclosure: I drafted and submitted the comments from the Central Coast Broadband Consortium – I’m as guilty as the rest. For now, you can find links to it all below – fine reading for a rainy weekend afternoon. Enjoy.

Comments on phase 1 (public housing, adoption and infrastructure loans – see appendix B below) of proposed changes to the California Advanced Services Fund program, filed on 16 March 2016:

Regional Broadband Consortia
Central Coast Broadband Consortium
CSU Chico Geographical Information Center (Northeastern and Upstate California Connect Consortia)
Gold Country Broadband Consortium
North Bay North Coast Broadband Consortium

Public Agency
City and County of San Francisco

Internet Service Providers
Bright Fiber Network, Inc.
California Cable and Telecommunications Association
Frontier Communications

Non Profit Organisations
California Emerging Technology Fund
Radio Bilingue, Inc.
Satellite Affordable Housing Associates
Tech Exchange
Tenderloin Neighborhood Development Corporation

CPUC scoping memo and proposals
Scoping memo and ruling of assigned commissioner, Martha Guzman Aceves, CASF program changes, 14 February 2018
Appendix A, AB 1665 changes to CASF program
Appendix B, CPUC staff proposals for broadband adoption, public housing and loan programs
Appendix C, CPUC staff proposed changes for broadband infrastructure grant, line extension and regional broadband consortia programs

FCC will have to defend net neutrality repeal in San Francisco


The luck of the draw means the future of network neutrality and broadband’s status as a common carrier service will be argued in San Francisco. Credit for that is split between the California Public Utilities Commission and Santa Clara County, who filed separate challenges to the Federal Communications Commission’s decision to eliminate net neutrality rules and scrap common carrier obligations for broadband service with the ninth circuit federal appeals court.

Several other organisations filed their appeals in Washington, D.C., and a federal judicial panel randomly gave the job of consolidating and deciding the cases to the San Francisco-based ninth circuit.

Both the CPUC and Santa Clara County call the FCC’s decision “arbitrary, capricious, and an abuse of discretion” and claim that it violates both the federal constitution and federal communications law. In other words, they’re challenging the way the decision was made rather than its substance. That’s an easier – which is not to say easy – case to make. Republican commissioners rushed the decision through, and might not have dotted all the i’s and crossed all the t’s. To put it mildly, democratic commissioner Jessica Rosenworcel certainly thinks so – she called the FCC’s action a “rash decision” resulting from a “corrupt process”…

This decision and the process that brought us to this point is ugly. It’s ugly in the cavalier disregard this agency has demonstrated to the public, the contempt it has shown for citizens who speak up, and the disdain it has for popular opinion. Unlike its predecessors this FCC has not held a single public hearing on net neutrality.

There’s no shortage of Californians involved in the challenges to the FCC’s decision. California attorney general Xavier Becerra joined the appeal filed by his New York counterpart. Mozilla filed its own challenge. The Open Technology Institute and the Coalition for Internet Openness did too. Both list several Silicon Valley companies as major backers. OTI counts Google and Apple among its contributors (as well as Comcast and Charter, although I doubt this is what they signed up for).

CPUC vs. FCC, petition for review of order of agency, board, commission, or officer, 22 February 2018
County of Santa Clara vs. FCC, petition for review, 22 February 2018
Coalition for Internet Openess, petition for review, 5 March 2018
U.S. judicial panel on multidistrict litigation, in the matter of restoring internet freedom, consolidation order, 8 March 2018

Wrangling over electric company fiber continues at CPUC


Both Southern California Edison and TURN, a consumer advocacy group, are lobbying the California Public Utilities Commission in the hope of pressing home their respective arguments about how much money generated from telecoms services, such as dark fiber leasing, privately owned electric companies can keep. The narrow issue that’s on the table is a master fiber lease agreement between SCE and Verizon that needs to be approved by the CPUC, but it could have far reaching effects on how, or even if, electric companies pursue telecoms opportunities and ultimately on the availability of independent long haul dark fiber in California.

SCE met with commissioner Clifford Rechtschaffen last month, before he pulled his proposed decision off the commission’s agenda last week. As drafted, it would require SCE to give 75% of gross fiber leasing income to its electric customers, rather than the 10% that’s currently required. SCE told Rechtschaffen that “the proposed 25/75 shareholder/ratepayer revenue sharing mechanism would cause SCE to not pursue any opportunities under the [Verizon master lease agreement] because they would not be economically feasible”.

TURN made its case in a conference call with Rechtschaffen’s staff, saying that there’s no support for the claim that reducing SCE’s cut from 90% of gross revenue to 25% will discourage future investment. That’s an odd point to argue. When you take expenses into account – which all have to come out of that remaining 25% – there’s not much left over to generate a return on investment for shareholders. No return means no investment. No investment means no more competitive dark fiber will be built. Which perfectly suits the monopoly-centric business models of California’s major long haul fiber owners – AT&T, CenturyLink and, yes, Verizon.

There’s no way of knowing at this point if Rechtschaffen plans to make any changes to his draft, or if at least two other commissioner will go along with it at their next meeting on 22 March 2018.

My clients include Californian cities that have municipal electric utilities with fiber interests, and cities that just want better broadband. I am not a disinterested commentator. Take it for what it’s worth.

CPUC not ready to cripple dark fiber competition just yet


No decision so far from the California Public Utilities Commission regarding changing the rules of the game for privately owned electric companies when they engage in dark fiber leasing and other telecoms business activities. The commission was scheduled to vote Thursday on a draft decision that, as currently written, would require Southern California Edison to give 75% of the gross revenue it gets from leasing out dark fiber to its electric customers. Up until now, it’s only had to hand over 10% of gross telecoms revenue to ratepayers.

The vote was bumped two weeks, to 22 March 2018. It’s the second time it was delayed. The first time, CPUC president Michael Picker pulled it off the agenda – any commissioner is allowed to do that once for any particular item, usually. This time, it was commissioner Clifford Rechtschaffen who asked for the delay. He’s the “assigned commissioner” in this case, and he’s the one who opened up what was originally a routine request by SCE to approve a master fiber lease deal with Verizon, and turned it into what could end up being a much broader reevaluation of how telecoms businesses of private electric utilities are regulated.

SCE and consumer advocacy groups – who have a strangely narrow view of what consumers need – continue to press their respective points of view, and changes might still be made to the draft decision.

Both SCE and Pacific Gas and Electric installed fiber networks on their electricity transmission infrastructure, originally to manage those systems. Installing a couple of fiber strands costs virtually the same as installing a couple of hundred, while going back and adding more strands later effectively doubles the cost. So network operators, of any sort, routinely add extra strands – usually lots of extra strands – when building new fiber routes.

PG&E and SCE were no different. Over the past twenty years or so, they’ve leased out extra capacity to other telecoms companies, and turned it into a nice side business run according to rules established by the CPUC back when it all started. They’ve also built extensions to their original fiber networks, to serve telecoms customers. Fiber built to support electric operations was treated as an allowable expense by the CPUC, which regulates electric rates partly on that basis, but extensions for fiber customers were not.

Up until now, it’s been a win-win scenario for electric companies and consumers, who need affordable broadband access as much as they need electric service. PG&E and SCE are major source of independent, long haul dark fiber capacity in California, which is a segment of the broadband market that woefully lacks competition, as the CPUC has acknowledged.

Reducing the incentives for them to compete would be a very bad decision.

My clients include Californian cities that have municipal electric utilities with fiber interests, and cities that just want better broadband. I am not a disinterested commentator. Take it for what it’s worth.

California line extension subsidy program sends money to cable companies via low income homes


When lobbyists for big telcos and cable companies rewrote California’s primary broadband infrastructure subsidy program – the California Advanced Services Fund (CASF) – last year, they carefully maximised the money they’d get while minimising, even eliminating, independent competition and inconvenient rules.

One of the perks approved by lawmakers is particularly pleasing to the cable lobbyists who asked for it: a money laundering scheme that allows them to get broadband construction subsidies without the need for any annoying oversight or other regulatory entanglement with the California Public Utilities Commission, which gives out the grants.

Assembly bill 1665 allows an “individual household or property owner” to apply for a grant to pay for the cost of connecting to an “existing or proposed facility-based broadband provider”. It refers to this sort of connection as a “line extension”, which is a term commonly used in the cable industry, where homeowners and businesses are routinely charged for the full cost of extending service to their property, regardless of whether or not the new line passes other potential customers.

It was possible to get grants for line extensions under the old CASF program, but cable companies refused to take part because it meant subjecting themselves to the CPUC’s service obligations and due diligence requirements.

Both Comcast and Charter Communications have promised service to prospective new business or residents, and then once they’ve moved in told them it would cost tens of thousands of dollars. Surprise!

CPUC staff drafted an outline of what the program might ultimately look like. Per the legislature’s urging, grants would be limited to low income households – those eligible for lifeline telephone service or making less than $49,200 a year – and properties that are used for “farming, for low-income housing, for educational purposes” and potentially other purposes, if commissioners so choose.

Grants would cover 95% of the construction cost of the line extension, with the remainder possibly coming from the service provider. That’s not unreasonable. You might even call it generous. The legislature made it clear that the new facilities would belong to the lucky service provider, while the burden of complying with CPUC rules and oversight would fall on the household getting the grant.

There are other details to be determined, including a tighter definition of “line extension”. As drafted, the rules would allow wireless and satellite providers to also get the money, after it’s been thoroughly laundered through residents or property owners. Exactly what that means and what limits will be placed on wired connections still have to be decided.

Written comments can be submitted to the CPUC through 16 April 2018.

Scoping memo and ruling of assigned commissioner, Martha Guzman Aceves, CASF program changes, 14 February 2018

Appendix C, CPUC staff proposed changes for broadband infrastructure grant, line extension and regional broadband consortia programs

CPUC considers giving broadband subsidy priority to low income areas


One-third or more of broadband infrastructure subsidies would go to low income areas, if the California Public Utilities Commission adopts new rules proposed by staff for the California Advanced Services Fund (CASF). Although the draft rewrite published on Wednesday by commissioner Martha Guzman Aceves is just the starting point for a debate that won’t be resolved until the end of the year, it is consistent with comments that she and other commissioners have made on many occasions.

The proposal sets aside at least $100 million of the $300 million pumped into CASF by the California legislature for last mile broadband projects in low income areas. It would raise the funding amount for projects from the current 60% to 70% of construction costs, to 100% in low income areas and 80% elsewhere, and allows some operating costs to be subsidised as well.

An area would be considered to be “low income” if the median household income is less than $49,200 per year.

Many of the other proposed changes are taken directly from assembly bill 1665, which was effectively written by telco and cable lobbyists, and then passed by the California legislature and signed into law by governor Jerry Brown last year. Middle mile projects – such as the Sunesys project in the Salinas Valley and Digital 395 in easter California – would be banned, areas where AT&T and Frontier Communications receive federal subsidies would be roped off, and incumbents of all kinds would be able to block independent competition by claiming jus primae noctis a right of first refusal.

The proposed new rules also change the way projects are developed. Broadband companies would still be able to come up with their own projects and submit grant applications, but the CPUC could also identify high priority projects on its own initiative and issue a request for proposals, which any private service provider could respond to.

The CPUC will hold a series of public workshops throughout California to discuss the proposed changes to the infrastructure subsidy program, and will accept written comments until 16 April 2018.

Scoping memo and ruling of assigned commissioner, Martha Guzman Aceves, CASF program changes, 14 February 2018

Appendix C, CPUC staff proposed changes for broadband infrastructure grant, line extension and regional broadband consortia programs

CPUC begins rewrite of California broadband infrastructure subsidy rules


California’s broadband primary infrastructure program, the California Advanced Services Fund (CASF), is in for an overhaul by the California Public Utilities Commission. Last year, the California legislature passed and governor Jerry Brown signed assembly bill 1665, which pumped more money into the fund but also placed severe, incumbent-centric restrictions on how it can be spent.

It’s up to the CPUC, though, to decide the detailed objectives, rules and procedures for the program. Yesterday, commissioner Martha Guzman Aceves posted a scoping memo and ruling, which outlines extensive changes proposed by CPUC staff, and a schedule for reaching a decision.

There will be two phases. Because of deadlines set by the new law, the first order of business will be to create a new program that will fund what the legislature broadly defines as broadband adoption initiatives. As Guzman Aceves’ ruling states, funded activities…

Could include increasing access to free publicly available broadband, after-school broadband access and digital inclusion for communities with low adoption. Grants from this Account could be for digital literacy training programs and public education to communities with limited broadband adoption, including low-income communities, senior communities, and communities facing socioeconomic barriers to broadband adoption.

Phase 2 will focus on broadband infrastructure subsidies. Industry lobbyists wrote and lawmakers approved sharp restrictions on where broadband projects can be funded, what kind of infrastructure is allowed and who can apply for the subsidies. AB 1665 lowered California’s broadband speed standard to 6 Mbps download and 1 Mbps upload speeds, which had the effect of reducing the number of eligible homes from somewhere in the hundreds of thousands range to the low ten of thousands. It also carved special privileges for incumbents, with substantial perks for AT&T and Frontier Communications.

Other issues will be rolled into the two phases, including changes to the public housing and regional broadband programs, and establishment of a line extension program, which would funnel money through individuals to Internet service providers for relatively small extensions of existing systems. It’s a program that was pushed by cable lobbyists, who don’t want to deal directly with the CPUC.

I’ll do deeper dives in the coming days on the draft rules proposed, as a starting point, by CPUC staff, but you can read through everything by clicking the links below. The first milestone comes on 16 March 2018, when comments are due on the adoption and public housing program proposals. The schedule outlined by Guzman Aceves calls for both phases to be wrapped up before the end of the year.

Scoping memo and ruling of assigned commissioner, Martha Guzman Aceves, CASF program changes, 14 February 2018

Appendix A, AB 1665 changes to CASF program

Appendix B, CPUC staff proposals for broadband adoption, public housing and loan programs

Appendix C, CPUC staff proposed changes for broadband infrastructure grant, line extension and regional broadband consortia programs

Competitive dark fiber gets a reprieve in California


A proposal to flip – and maybe kill – the business model for dark fiber enterprises run by private electric utilities is on hold at the California Public Utilities Commission. It was pulled off today’s CPUC agenda by commission president Michael Picker and tentatively rescheduled for March.

Last year, Southern California Edison asked for permission to do a master fiber lease deal with Verizon. It seemed to be routine. SCE has been negotiating dark fiber leases on terms established by the CPUC for nearly 20 years. But Clifford Rechtschaffen, the commissioner assigned to the case, decided to transform a narrow, course-of-business request into a broad rewrite of established rules.

The result was a proposed decision that, if approved by the full commission, would require SCE to give 75% of its gross revenue from the deal to its electric customers, instead of the customary 10%. Since all operating expenses would have to be paid out of the remaining 25%, that would make the fiber business much less attractive to SCE, perhaps even to the point they’d walk away from it.

The rationale rests on a fundamental misunderstanding of how fiber optic networks are constructed. SCE originally built its fiber network to provide internal communications between its own locations. As is common practice, it installed more fiber strands than it needed – the cost of upsizing a fiber cable, say, from 12 strands to 144 strands is negligible. Nearly all of the expense is labor – including legal and consultant expenses to get through the regulatory hoops – and it’s the same no matter how many strands are in the cable.

The twisted logic at play here is well illustrated by the latest comments filed by TURN, a consumer advocacy organisation…

If SCE’s claim were true, such that it had in the past prudently installed excess fiber optic capacity for future years, then the Commission could reasonably expect that SCE would have stopped installing more fiber optic network facilities of late and instead relied on that excess capacity.

TURN’s argument is nonsense. The “excess capacity” is, so to speak, in upsized cables between points A and B. If SCE needs to get to point C, that excess capacity is useless. It’ll have to build a new line between points B and C, and it would be irresponsible for it to put in the bare minimum of strands it needs at the time. More strands means more open access dark fiber, which in, um, turn means more competition in what passes for a telecoms market in California.

TURN and its fellow travellers need to take the blinders off and understand that what’s good for an electric company can sometimes be good for utility customers, who need energy and telecoms services alike. That’s something the CPUC needs to recognise too.

Reply comments of the Utility Reform Network on the proposed decision on SCE’s’s application to lease fiber optic cables to Verizon wireless under a master lease agreement, 5 February 2018.

Reply comments of Southern California Edison Company on the proposed decision, 5 February 2018.

My clients include Californian cities that have municipal electric utilities with fiber interests. I am not a disinterested commentator. Take it for what it’s worth.