Tag Archives: cpuc

Californian broadband subsidies create rural competition, of a sort

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The Digital 299 middle mile fiber project approved by the California Public Utilities Commission on Thursday is a big step toward levelling the competitive playing field for broadband in the Klamath Mountains. It’s a rugged and sparsely populated region, with very little wireline or mobile broadband access, and fixed wireless service that seems to rely on expansive coverage claims backed up by lawyerly disclaimers rather than recognised and verifiable technical standards.

That’s why the region qualified for a $47 million broadband infrastructure grant from the California Advanced Services Fund. That money will mostly go toward building a 300 mile long fiber network, generally along State Route 299, but $1.5 million will be spent on last mile, gigabit service for the town of Lewiston in Trinity County and $3.1 million will pay for up to 15 wireless towers along the line. The result will be three big, competitive kicks…

  1. Cheap (relatively) Internet bandwidth. Assuming the system is run on an open access basis with reasonably transparent pricing – likely, at least at first, but not guaranteed by the CPUC – any ISP will be able to bring in gigabits of capacity at prices that match or beat what’s available to mainstream communities in the Sacramento Valley.
  2. Ready made towers, with backhaul included. If the price is right, mobile carriers will come, as Frontier Communications, the only wireline company along the route, seems to know. It vociferously objected to this common sense add-on to the project. Given that it has no qualms about accepting federal subsidies for service that fails to meet Californian standards, it’s a safe bet that Frontier’s motivation isn’t concern for taxpayer dollars.
  3. A shining testament that a better world awaits. People living in the 300 homes in Lewiston – a town that makes Boron look like an LA suburb – will get a symmetrical gigabit for $60 a month. Their neighbors along SR 299, and particularly in the communities that the CPUC unjustly chopped from the project), will know what’s possible and will not have to accept poor mouthing from incumbent providers.

Don’t get too carried away by the competitive prospects. Internet access along the Digital 299 route will be greatly improved and core broadband infrastructure will be much better than similarly remote areas of California, but the economics of broadband along the Digital 299 route will, absent additional subsidies, keep service levels low and/or prices high by urban standards.

Push back on public funding will only increase. Attempts to put more money in the CASF kitty are stalled in Sacramento and CPUC president Michael Picker, who echoed incumbent talking points before voting *no* on the Digital 299 grant, is embracing the monopoly first model of FCC chair Ajit Pai.

But even if it’s not a free market paradise the Klamath region has a fighting chance, where before it had none. That’s a win.

Middle mile fiber link to California’s north coast gets $47 million

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The Digital 299 middle mile fiber project will receive a $47 million subsidy from the California Advanced Services Fund. The line begins in Shasta County, just south of Redding where it will connect to long haul fiber on the I-5 corridor, and runs along State Route 299 through Trinity County, ending on the coast in Humboldt County at Eureka, with laterals to a potential submarine cable landing site on Arcata Bay and Humboldt State’s marine lab in Trinidad. It also includes a spur up to Hoopa tribal lands along State Route 96. It’ll be built and operated by Inyo Networks/Praxis Associates, the commonly owned companies responsible for the similar Digital 395 project in eastern California.

The California Public Utilities Commission voted 4 to 1 to approve the grant yesterday, with president Michael Picker voting no. It pays for 70% of middle mile construction costs – $45 million of $65 million total – and 60% of a small last mile build for 300 homes in the Trinity County community of Lewiston, $1.5 million of $2.4 million total. People living in Lewiston will be able to get symmetrical gigabit Internet service for $60 per month.

Originally, Inyo Networks proposed offering this fast and cheap package to a total of 1,000 homes, in Douglas City, Hayfork and Burnt Ranch as well as Lewiston, but it had to slash 700 homes from the last mile component of the project. That was because Frontier Communications protested, promising instead to upgrade broadband speeds to 1,200 homes in the area to 10 Mbps download and 1 Mbps upload speeds. That’s something Frontier has to do anyway, to meet requirements attached to federal broadband subsidies it’s accepted. It’s also below the CPUC’s minimum 6 Mbps download and 1.5 Mbps upload standard, but Frontier dodged around that requirement by telling the CPUC that it “estimates that approximately 70 percent of these households will receive speeds greater than the minimum speed (12 mbps down and 2 mbps up, or higher)”.

The project budget also includes construction of up to 15 towers that would be attached to the network and provide a platform for mobile carriers, public safety radio systems and other wireless services: potential middle mile fiber customers, in other words.

CPUC approves Digital 299 fiber project, Webpass transfer, pole access enquiry

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In a 4 to 1 vote, the California Public Utilities Commission voted to spend $47 million on the Digital 299 middle mile fiber project this morning. It’s a 300 mile network connecting Trinity and Humboldt counties to long haul routes in Shasta County. The no vote came from president Michael Picker.

The CPUC also unanimously approved Google’s purchase of Webpass, a mostly wireless broadband provider that is also licensed as a wireline telephone company – hence the need for commission review – and granted a request to begin consideration of new access rules that would allow licensed telephone companies to hang wireless equipment on utility poles.

All or nothing for Digital 299 tomorrow

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Update, 23 March 2017: the CPUC voted 4 to 1 to approve the Digital 299 grant this morning.

The Digital 299 middle mile fiber system will either get all of the $47 million that its backers are requesting from the California Advanced Services Fund, or it won’t be subsidised at all. The California Public Utilities Commission will make that choice tomorrow, assuming the current schedule holds, when it considers whether or not to fund a 300-mile fiber route that would begin near Redding, where it would connect to existing fiber lines along the I-5 corridor, and run through Trinity County and terminate on the Humboldt County coast, at Eureka and Trinidad.

When it was proposed in August 2015, the applicant – Inyo Networks – asked for a $51 million grant, based on the assessment that the project area was unserved, in other words, there was no broadband service available at all. That would have made the project eligible for 70% funding from CASF. However, after it had been under review for a year and a half – despite the fact that commission rules call for that work to be completed in three and a half months – that figure was trimmed back to $41 million. CPUC staff rated most of the territory as underserved – eligible for only 60% funding – and accepted late objections from Frontier Communications and Charter Communications which resulted in the majority of the included last mile service area being taken out and a reduction in the middle mile subsidy, respectively.

When the Commission first considered the project last month, Inyo Networks and supporters from the Humboldt area asked for $6 million more for the project, as well as easier completion bond requirements. At the time, commissioner Carla Peterman said she’d draft an alternate resolution that would do that. Instead, the original resolution was rewritten – it was published last week, but I missed it – to raise the grant amount and relax bonding specs. That means that there will only be one resolution on the table – the lower cost option is gone, absent a move by commissioners to revive it.

The big question now is whether it can muster three votes. At last month’s meeting, president Michael Picker said he’s “likely to vote against this under any circumstances”, and rookie commissioner Martha Guzman Aceves expressed similar skepticism. That means fellow rookie Clifford Rechtschaffen, Liane Randolph and Peterman will all have to vote yes. Otherwise, Digital 299 dies.

Broadband subsidies should be spent on California’s future

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There’s more than $100 million left for broadband infrastructure subsidies in the California Advanced Services Fund and the California Public Utilities Commission is considering whether to set its own, statewide priorities for spending it. The first draft of a staff white paper that looks at objective methods of determining those priorities is open for comment, and I submitted three recommendations on behalf of the Central Coast Broadband Consortium on Friday…

  1. Be forward looking in assessing broadband development needs. Adopting the 10 Mbps download/1 Mbps upload speed standard, as the draft white paper in effect does, is a step backward for California, rather than a sorely needed leap forward. The technology and infrastructure required to deliver service at that level is inferior to that required to meet the CPUC’s current minimum service level of 6 Mbps download/1.5 Mbps upload speeds. Likewise, eliminating areas from consideration that are partly served by fixed wireless service will leave hundreds of thousands of Californians with either no broadband access at all or service that has no standards of reliability, affordability or public safety to meet.

    Instead, the commission should base its needs assessment on the availability of service that meets the federal 25 Mbps download/3 Mbps upload standard for advanced services and complies with the same kind of quality, reliability and integrity requirements that the commission mandates for other telecommunications service providers.

  2. Assess social impact as well as economic feasibility. When the CCBC conducted its priority-setting exercise in 2014, we evaluated both the social impact and the economic feasibility of pursuing broadband infrastructure projects in the areas we assessed. The draft white paper properly and cogently assesses economic feasibility, but does not consider social impact.

    We recommend running, as we did, a separate social impact analysis based on population (as opposed to number of housing units or households), number of community anchor institutions, the proportion of the community that would be reached by CASF-funded projects, and median household income. The result would be two analytical tools that could be applied by policy makers, and that could be rolled up, as we did, into a single, unified ranking.

  3. Apply the results of the analysis on a prospective basis. As of today, seven CASF broadband infrastructure grant proposals are pending and have been under review for an average of 435 days, 330 days past the deadline established by Decision 12-02-015 and reaffirmed by Resolution T-17443. Two major projects, Digital 299 and Gigafy Phelan, have been awaiting action for 586 days. These seven projects required hundreds of thousands of dollars and thousands of hours to prepare, and were submitted in reliance on good faith and the published criteria for such grants, as established by the commission.

    The delays and inconsistencies in the review and approval of CASF infrastructure projects has made it very difficult to find capable, reputable and financially able private sector partners. If the commission breaks faith with applicants and applies any new project criteria or priorities retroactively, it will make such recruitment impossible.

The first hint as to what commissioners will do with the remaining CASF money and, perhaps, what they think of the draft methodology should come on Thursday, when they consider a $41 million grant proposal for Digital 299, a northern California middle mile project.

CPUC considers pole access, Google and fiber

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Update, 23 March 2017: the CPUC voted 4 to 1 to approve the Digital 299 grant this morning, and unanimously approved Google’s purchase of Webpass and the enquiry into expanded utility pole access.

Three important decisions are in front of the California Public Utilities Commission this week: a $41 million (or perhaps $47 million) grant for a northern California middle mile fiber project, formally considering whether telephone companies can attach wireless gear to utility poles and what the aesthetic impacts might be, and allowing Google to buy Webpass, a mostly wireless Internet provider that’s also licensed to offer wireline service.

Although the pole access decision is routine – it would not establish new rules, just begin the process – the scope of the commission’s enquiry will be broad. But apparently that’s okay with utility companies, since none filed any objections. You can safely bet, though, that anyone with a stake in wireless services or utility poles will be watching it like a hawk.

The Webpass purchase is also uncomplicated on the face of it. Since Webpass has a CPUC-granted license to operate as a telephone company – a certificate of public convenience and necessity (CPCN) – Google needs permission to take it over. The transaction attracted the attention of a chronic protester, who was ultimately convinced to go away, and it has big implications for both current Webpass customers and Google’s plans (or lack thereof) to be a broadband service provider. Once it owns Webpass and its CPCN, Google can claim all the privileges of a phone company, including potentially the right to hang wireless equipment on utility poles.

Digital 299 is also on the agenda for this week’s CPUC meeting. It’s a proposed 300 mile fiber line linking existing routes that run through the Sacramento Valley along the I-5 corridor to the Humboldt County coast and points in between. There’s a draft decision on the table that would approve a $41 million subsidy from the California Advanced Services Fund, and commissioner Carla Peterman has promised to offer an alternate version that would add another $6 million.

The pole access item and the Webpass transfer are likely to be approved without comment – so far, there’s no indication otherwise – but the Digital 299 project faces an uncertain future. Two commissioners – Martha Guzman Aceves and president Michael Picker – have already expressed opposition. If just one of the three others join them, it’s dead.

CenturyLink gets extortionate pricing bonus from Level 3 deal

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Level 3 is engaging in “extortionate pricing” for the middle mile fiber connections it leases to broadband companies, and the problem will only get worse if CenturyLink is allowed to buy it. That’s the claim made by Windstream, a relatively small incumbent telephone company, based in Arkansas, that also offers data networking and other telecommunications services to businesses outside of its primary coverage area.

Windstream filed comments with the Federal Communications Commission, as it decides whether CenturyLink’s proposed purchase of Level 3 will go forward. As did Frontier Communications, which got a big amen from Windstream…

Like Frontier, Windstream is concerned that the combined entity will use its augmented scale and market power to engage increasingly in these and other practices that are contrary to the public interest and fair and reasonable competition, and are detrimental to Windstream’s continued effort to invest in its network to provide robust and affordable broadband service, particularly in rural and high-cost areas. As Frontier notes, “[a]bsent conditions aimed at remedying these practices, the Commission should conclude that the proposed transaction will substantially frustrate or impair the Commission’s implementation or enforcement of [federal telecoms law], which requires carriers to engage in just and reasonable practices.

There’s not much the FCC can do about Level 3’s current pricing policies, even it it wanted to do so. Former chairman Tom Wheeler folded his hand on regulation of middle mile services shortly after Donald Trump won the presidency, and it’s a safe bet that the FCC as currently comprised won’t take it up again. The real question is whether the FCC will allow CenturyLink to buy Level 3, significantly reduce what little competition exists in the middle mile fiber market and kick its predatory pricing practices into overdrive.

Meanwhile, here in California, there’s no word on whether the California Public Utilities Commission will weigh in on the deal. No formal proceeding has been opened, which indicates that CenturyLink and Level 3 hope to slide their hook up through on a simple, administrative basis. Given the CPUC’s clear declaration that middle mile competition matters, allowing such a lawyerly slight of hand would be a travesty.

Competitive pole access, urban streetscapes considered by CPUC

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The California Public Utilities Commission will decide whether wireline telephone companies and other licensed telecommunications companies can attach wireless equipment to utility poles on the same terms as mobile carriers. Responding to a request from the Wireless Infrastructure Association (WIA), a lobbying group for companies that build and own cell towers and similar facilities, CPUC president Michael Picker is proposing to start the process that could eventually grant that permission.

But the questions he wants to ask go beyond the simple technical and legal considerations that go along with the current pole attachment rules, and touch on broader questions of competitive barriers and how much infrastructure is too much, particularly in urban areas…

Although the scope of this proceeding is limited to [licensed telecoms companies’] wireless pole attachments, we will take comment on (1) whether there is sufficient space and load-bearing capacity on the stock of existing utility poles to support additional telecommunications attachments, including wireless pole attachments, that may be necessary to provide ubiquitous, competitive, and affordable telecommunications services; (2) whether the cost of replacing existing poles to support additional telecommunications attachments poses a barrier to entry; and (3) whether urban streetscapes can accommodate more pole attachments, the replacement of existing poles with larger poles, and possibly an increase in the number of poles. We will also take comment on the range of pole attachments and services contemplated by WIA.

It’s not clear what he plans to do with the information about the type of wireless services that might be offered, but that sort of regulation is primarily a federal matter and CPUC has very limited, and decreasing, scope in that regard. But if it’s just about getting more information into the record and in the hands of policy makers, it’s a very positive step.

Picker’s willingness to consider WIA’s petition stands in contrast to his decision – ratified by the commission as a whole – to deny cable companies the same privileges. As a practical matter, though, most cable companies have licensed telecom subsidiaries, as their lobbyists have pointed out.

The commission will vote on Picker’s plan to take a deeper look at competitive access, or lack thereof, to utility poles, but it would be very unusual for permission to be denied – that would, in effect, decide the issue – so expect to hear more about it in the coming months.

California bill tells telephone, cable companies to take rural 911 seriously

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Press 1 to pay your bill. If you’re having a heart attack, stay on the line and a representative will be with you shortly.

When broadband or phone service goes down in rural California, the last people to know are often the dispatchers at emergency 911 centers. When they do figure it out, there’s not much they can do about it except hope for the best. Such notification requirements that exist have thresholds that are set with urban areas in mind – hundreds of thousands of households, for example – and can leave rural communities in a telecoms black hole for hours or days on end.

A proposed law pending in Sacramento would address part of that problem. As currently drafted, senate bill 566, authored by senator Mike McGuire (D – Healdsburg) would do two important things. It would require companies that provide 911 dial-in access – telcos as well as cable and VoIP companies – to notify the state office emergency services within an hour when rural lines go down, and provide direct contact with real humans while repairs are underway. OES would then be responsible for keeping local public safety agencies and 911 centers informed.

Under current practices, cable and telephone companies can send emergency operators into the same toll free, customer service hell as everyone else. You can guess how well that works, but if you want the gory details, you can take a look at the results of last year’s investigation into rural call completion issues by the California Public Utilities Commission. The end result of that proceeding was new requirements that go some way toward fixing the problem, but only so far. Even that, though, was too much for telecoms companies, who have launched an all out legal challenge to the new standards.

McGuire’s bill simplifies those rules – when service goes down, call 911 and stay on the case, period – and, more importantly, bakes them into law, rather than leave the details up to a CPUC that is, at times, happy to let telcos do as they please. SB 566 has a long way to go until – or if – it’s passed and signed by the governor. It’s currently awaiting its first hearing, in front of the state senate energy, utilities and communications committee.

To attract broadband investment, the CPUC has to be a trustworthy partner

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Yesterday, the California Public Utilities commission held a workshop in San Francisco to talk about setting priorities for broadband infrastructure subsidies and to review the methodology and policy assumptions behind a recently published draft white paper on the topic.

Much of the discussion focused on how those priorities would be used to evaluate projects currently proposed for grants from the California Advanced Services Fund (CASF), as well as any new ones that might develop. There was considerable concern that applications submitted under the current first come, first served procedures will be tossed out and new proposals solicited.

If that happened, it would be a very bad move by the CPUC.

It takes a lot of time and money to plan a CASF infrastructure project and prepare a grant application. There are seven pending projects and five of those have been gathering dust under review for more than a year, despite commission rules that call for a decision within three and a half months. The CASF program depends on recruiting private sector partners who are willing to raise the necessary matching funds – typically 40% of the tab – and risk spending the upfront money to submit a proposal and shepherd it through the vetting process, with no guarantee of success.

That’s a tough sell under any circumstances. But it would be all but impossible if the rug is pulled out from under the current batch of applicants. They relied on the approval criteria and review deadlines as published and promoted by the CPUC. It would be a pure bait-and-switch ploy to change the game after they’ve invested years and, in some cases, hundreds of thousands of dollars in vain attempts to play by the rules.

Trust is a fragile thing. CPUC must maintain it if it wants private companies to buy into its priorities, whatever those turn out to be.