Tag Archives: public policy

Case against San Bernardino FTTH embraces low federal expectations

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A proposed $28 million grant for a fiber to the home project in the Phelan area of San Bernardino County has drawn two formal challenges. One, from Frontier Communications, was completely predictable, but the other, from the California Public Utilities Commission’s office of ratepayer advocates (ORA), was somewhat unexpected.

Only somewhat, because ORA has a track record of sporadically opposing grants for FTTH systems from the California Advanced Services Fund (CASF). However, its objections usually second guess design or budget decisions. This time though, ORA is taking Frontier’s side, arguing that CASF subsidies shouldn’t be given for projects in areas where incumbents are getting federal money via the Connect America Fund program.

There are two big problems with that argument. First, the federal money generally pays for minimal upgrades to existing, and typically antiquated, broadband infrastructure. To get the money, Frontier only has to commit to providing service at 10 Mbps download and 1 Mbps upload speeds. In other words, substandard service that leaves communities underserved by the CPUC’s minimum benchmark of 6 Mbps down and 1.5 Mbps up, and therefor eligible for CASF money.

ORA makes much of Frontier’s claims that it can do better, but if this project is approved, Race Telecommunications will offer gigabit service for $60 a month to every home in its footprint. And that’s an enforceable obligation, since it’s tied to the grant money. Frontier, on the other hand, can’t be forced to deliver on its half promises about speeds and it’s making no commitments about prices.

Second, Frontier won’t be serving all the homes in Race’s proposed project area: the federal money is scattered around a checker board of census blocks, per the map above. Some people will be left without broadband service at all, and others will end up with speeds that wouldn’t have been considered sufficient ten years ago, let alone today.

The real problem is that the federal program is poorly designed. It pays for propping up incumbents’ slow service, out of date infrastructure and inconsistent deployment. If the aim is to avoid overlapping subsidies, then it’s the federal money that should be spent elsewhere. Its increasingly aggressive rhetoric and lawyerly intimidation notwithstanding, Frontier does not own exclusive rights to the Phelan community. The people – the ratepayers – there deserve advocacy too.

Bill preempting local control of cell permits, light poles amended in California assembly

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The language has been tweaked and a new formula added for setting rental rates, but the basic principle remains: California senate bill 649 would give mobile carriers and other wireless broadband providers – licensed or not – on-demand access to city and county owned vertical assets in the public right of way at below-market rates, and take away much of the discretion local governments have over where and how wireless telecoms facilities are built.

Although the bill generally applies to "small cells", the definition it uses – 27 cubic feet of stuff on a pole plus 35 cubic feet of gear on the ground, plus electric meters and switches – is big enough to include most modern wireless installations. There’s also language in it now that applies to any telecoms equipment: “a city or county may not adopt or enforce any regulation on the placement or operation of communications facilities”.

SB 649 is in the California assembly, where it’s due for a hearing in front of the local government committee on Wednesday. One of the more controversial provisions is gone. Language that limited local permits to the administrative variety has been removed. That means that local governments could exercise a bit more control than previous versions would have allowed, but only a bit. Other severe restrictions remain.

The compensation formula for leasing space on municipal infrastructure in the public right of way, such as light poles, has changed again. Instead of a cap of $850 per year, local governments could charge a flat $250 administration fee plus a share of the costs of owning and maintaining a pole. It’s hard to know at this point what that means in dollar terms, but it’s not likely to be a much different result than would have been allowed under the previous version. The legislation would, in effect, give a subsidy to mobile and other wireless companies by charging them less than fair market value for the use of publicly owned assets.

Wednesday’s hearing is probably the last, best chance for Californian cities and counties to kill SB 649, as they tried unsuccessfully to do in the senate. The local government committee is likely to pay more attention to their concerns than the assembly communications and conveyences committee, which so far this year has been more accommodating to telecoms industry interests.

CPUC tells FCC not to confuse copper networks with telecoms service

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Don’t confuse copper wireline infrastructure with the services it supports. That’s the message from the California Public Utilities Commission to the Federal Communications Commission. In comments regarding possible changes to federal wireless and wireline telecoms regulations, the CPUC said that the "FCC’s assumption that copper has outlived its usefulness is overstated"…

Copper technology is not inherently obsolete. Copper was originally used for telecommunications because it could serve as the backbone of a universal voice network: it was cheap to install, easy to use, and readily available. When the voice network expanded to provide broadband capability, new copper technologies were invented to provide data services and the internet to homes and businesses, using the existing architecture and infrastructure. Meanwhile, telecommunications carriers have gradually pushed fiber technologies further out from the core (where its capacity was well-suited to the big traffic requirements of interoffice communications), but fiber-to-the-home is not yet ubiquitous. Many carriers—especially those without a wireless affiliate—provide high-speed service to the home using either fiber or copper. For example, advances in the G.fast protocol have led to carrier strategies for serving multi-dwelling units using the existing copper loops. And some services—certain credit card readers, alarm systems, closed captioning, and emergency services, for example—still rely on copper technology. In a transitional technical environment like this one, all of these technologies—copper, fiber, wireless—should be used to their fullest. The FCC’s conflation of “fiber facilities” with “next-generation services” masks the difficulties that may arise if copper retirement is approached hastily.

That’s a position that four of the five CPUC commissioners agree with – they voted to approve these comments at their meeting on 15 June 2017, with commission president Michael Picker abstaining.

The comments also pushed back against federal preemption of California’s utility pole and right of way regulations, pointing out that the CPUC "currently has three ‘pole and conduit’ proceedings open". Under federal law, individual states can opt to regulate pole access and other telecoms policy themselves. California is one of twenty states that has done so.

Trump touts broadband lipstick in Iowa, but will he put it on a pig?

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Broadband is now explicitly included in president Donald Trump’s planned trillion dollar infrastructure program. Up until now, his focus has been on big civil engineering projects, like roads, bridges and dams. But Trump made it clear in a speech in Iowa earlier this week that telecoms infrastructure will be included…

If we continue to train our workers in these new technologies, then we will usher in a new era of prosperity for American agriculture and for the American farming family.

We must also ensure that these students have the broadband Internet access they need in order to succeed and thrive in this new and very modern and very changed economy and world. That is why I will be including a provision in our infrastructure proposal — $1 trillion proposal — you’ll be seeing it very shortly — to promote and foster enhanced broadband access for rural America also. We know that Wall Street wants it very badly, but you know what else? The farmers also want it. And you’re going to have it.

The big questions, though, are what kind of broadband infrastructure and who is going to build and operate it?

Trump is not a details guy, particularly when the issue involves something that doesn’t interest him personally. He’s shown no particular passion for broadband development or the nitty gritty of telecoms policy. Which means that he’ll be relying on his advisors to come up with a plan to improve broadband availability in rural America.

Federal Communications Commission chair Ajit Pai is one of those key advisors and a policy maker in his own right. He’s been very specific about how he thinks any rural broadband development subsidies should be spent: channel it to incumbents via existing programs, like the Connect America Fund, that set low speed standards – 10 Mbps download/1 Mpbs upload – which can be achieved by tweaking decades old technology. Instead of replacing it.

It would be a tragedy if that mindset prevails, but so far AT&T, Frontier Communications and other incumbents have successfully pushed that message both in Washington, D.C. and in Sacramento, where lawmakers are lining up to reduce California’s minimum broadband speed standards. It’s good that Trump is talking about broadband, but not if it means stranding rural (and inner city) communities with 1990s service levels.

California cities meet wave of mobile carrier land grabs

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I’ve been involved in several meetings between mobile infrastructure companies and staff from various California cities over the past couple of months. There’s a new gold rush going on now. And mobile carriers – Verizon, AT&T, T-Mobile and Sprint – are running around trying to do deals with cities ahead of 5G and pre-5G network upgrades. They want to put “small cells” on street lights and other city-owned vertical assets. Deals which might be preempted in their favor by SB 649 anyway.

What they want is to lock up real estate years ahead of actual construction. The networks won’t be fully built for 10 to 20 years, but if they can claim vertical assets, right of way and other prime locations now, they’ll be in a controlling position in any given city for a couple of decades.

5G networks rely on lots of small, short-range cell sites. Short range means you can have a lot more cells in a given area, which means the radio frequency bandwidth (also known as spectrum) can be re-used over and over.

For example, suppose you had one big cell tower that covered an entire city, which used all the spectrum a carrier has, and that amount of spectrum had a total capacity of 300 Mbps (e.g. you might have 300 people each watching their own 1 Mbps video stream at the same time). Then you replace it with 100 small cells, each with a 100 Mbps capacity and arranged so that the particular frequencies each uses doesn’t interfere or overlap with its neighbor.

All of a sudden you’ve gone from 300 Mbps total city capacity to 10,000 Mbps. That’s a too-simple example, but the principle applies.

There is no 5G technology standard currently, although there might be by the end of the year. Even so, it’ll be three to five years before the equipment is developed and proven, and then put into mass production and deployed on a large scale. In the meantime, these companies are trying to lay a claim to lots of sites for later, while using a few now that rely on current 4G technology (although they play egregious word games with that).

It’s a good idea for cities to work with mobile carriers and infrastructure companies, but it’s essential to do it in a way that creates a level playing field for everyone – incumbent mobile carriers and their vendors as well as the new ventures and technologies that are on the way – and doesn’t allow one player to lock up street lights, right of way and other real estate they won’t use for years. Given the level of local preemption activity going on in Sacramento and Washington, it makes sense for local governments to use the leverage they have while they have it.

Charter moves fast where fiber competition looms

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But is it fast enough?

If you want to steer telco and cable company capital investment toward your community, apply competitive pressure, preferably with a full scale fiber to the home project. Once again, that lesson has been learned as the simple and reliable mechanics of microeconomic theory have pushed a major cable company to accelerate spending in an area it has long ignored.

Charter Communications is required to upgrade the antique analog cable systems it has long maintained in redlined communities. That’s one of the conditions attached to the California Public Utilities Commission’s approval of its purchase of Time Warner and Bright House cable systems in the state. Charter’s deadlines for doing so range from two to three years, with most of its territory in California due for digital service within two and half years of the merger’s approval. That happened nearly a year ago, so the time remaining is more like one to two years.

So who goes to the top of Charter’s priority list? According to claims it has filed with the CPUC regarding where broadband subsidy dollars should be spent, the community on Charter’s fast track is one in San Bernardino County that’s been targeted by a competitor…

Charter agreed to rebuild its broadband footprint in both Phelan and Prunedale/Aromas/Salinas—two of the priority areas identified in the White Paper. In Phelan, Charter completed its rebuild in December 2016, revitalizing its plant and improving broadband services available in 250 census blocks identified in the White Paper as high impact. Similarly, Charter is scheduled to complete the rebuild of its plant in Prunedale/Aromas/Salinas no later than May 2019.

Phelan, where Race Communications is in the hunt for a California Advanced Services Fund subsidy for an FTTH system, was upgraded within months of the CPUC’s order taking effect. In the northern Monterey County neighborhoods around Prunedale and Aromas, Charter is happy to wait the full three years.

It’s uncertain whether Charter’s plans are enough to knock Monterey County off of the CPUC’s bang for the buck list. But it is crystal clear that the faster build happened in the community where Charter faces the bigger competitor.

AT&T fiber redlines low income communities, U.C. Berkeley study finds

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Where high income households are thick on the ground, AT&T builds out fiber to the home systems, but does minimal upgrades for middle income areas and leaves low income communities with 1990s-style legacy DSL or nothing at all. That’s the top line conclusion from a study done by U.C. Berkeley’s Haas Institute for a Fair and Inclusive Society

  • The median household income of California communities with access to AT&T’s fiber-to-the-home (FTTH) network is $94,208. This exceeds by $32,297 the $61,911 median household income for all California households in the AT&T wireline footprint.
  • In contrast, the median household income of California communities for whom the most advanced broadband technology available from AT&T is its slower U-verse fiber-to-the-neighborhood (FTTN) network is $67,021, which is $27,187 (28.9 percent) lower than the median household income of fiber-to-the-home households.
  • Approximately one-quarter (27.6 percent) of households — about 2.7 million households —in AT&T’s California footprint are stuck with slow DSL. The median household income for California households for whom DSL is the most advanced broadband technology available from AT&T is $53,186, which is $41,022 (43.5 percent) lower than the median household income of fiber-to-the-home households.

There’s also a distinct urban/rural divide in AT&T’s broadband infrastructure deployment strategy. While metropolitan areas get fiber and VDSL upgrades, rural areas are ignored. According to the study, almost no homes in 14 rural counties have access to AT&T broadband at the FCC’s minimum standards of 25 Mbps download/3 Mbps upload speeds and one-third lack access at the CPUC’s minimum of 6 Mbps down/1.5 Mbps up. In its overall service territory in California, 252,000 homes do not have access to AT&T broadband service at all.

In many respects, the report’s findings are no surprise. AT&T has been very clear that fiber infrastructure would only be going into high potential areas and that it plans to rip out copper networks in rural California and replace them with wireless service.

The study recommends that policymakers, and the California legislature in particular, should demand greater accountability from AT&T and promote more equitable high speed broadband deployment. Unfortunately, the California assembly has not taken the study’s findings or recommendations to heart. It just voted to lower California’s minimum broadband speeds, specifically to accommodate the substandard technology that AT&T maintains in rural and lower income communities.

FTTH expansion proposed for Riverside County desert communities

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Anza Electric Cooperative wants to expand its fiber-to-the-home system in southwestern Riverside County. After being awarded a $2.7 million FTTH infrastructure grant from the California Advanced Services Fund in 2015, Anza used its existing electric plant as the backbone for a fiber network aimed at reaching 3,800 homes in its service territory.

Now, it’s asking the California Public Utilities Commission for another $2.2 million, to reach 1,200 more homes and "several businesses", and provide free service to fire stations and the Ronald McDonald camp for kids with cancer According to the public version of its grant application summary

Connect Anza will deploy a fiber optic cable on existing poles and rights of way and establish a network of sufficient capacity to establish high speed, quality internet service for Anza Electric Cooperatives (AEC’s) existing service territory covering over 500 square miles, located wholly within western Riverside County. The area encompasses the communities of Mountain Center, Pinyon Pines, and Garner Valley which totals approximately 200 square miles of our service territory…

Connect Anza, as an integral part of AEC, will provide reliable, affordable broadband high speed, Fiber-ToThe-Home (FTTH) internet service to its member-owners at the lowest possible cost. Connect Anza will offer speeds of 50Mb/s both down and up to residents at a price point of $49.00 per month with no cap or limits. AEC will also offer VoIP service including CASF e911 requirements at a monthly rate of $20.

There’s one big difference between this project and Anza’s previous one: the first time around, it was going head to head with Verizon, which paid virtually no attention to its own wireline telephone systems, let alone potential competitors.

Since then, Frontier Communications has taken over those systems, including the ones that don’t offer even 1990’s legacy DSL in most of Anza Electric’s territory. The relatively few areas where broadband service is offered, speeds don’t reach the CPUC’s minimum of 6 Mbps download and 1.5 Mbps upload speeds. In contrast to Verizon, Frontier aggressively, and increasingly beligerently, challenges CASF grant proposals that pose a competitive threat to its monopoly control of, at best, poorly served areas of rural California. It won’t be so pleasant this time around.

California FTTH grant approved under current subsidy program rules

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California’s primary broadband subsidy program will stay on its present course, at least until the legislature changes it or the California Public Utilities Commission resets priorities and rules going forward. That’s the takeaway from a CPUC vote to approve a $1.1 million grant from the California Advanced Services Fund (CASF) for a fiber to the home project in southern Santa Clara County.

It’s an important message to independent Internet service providers who might be considering CASF-funded projects in the future: it’s expensive to prepare and submit applications – more than $100,000 in some cases – and the prospect of having one rejected a year or two later because the rules changed increases the risk beyond the point most are willing to go.

By a 3-to-2 vote, the commission approved the Light Saber Project grant, which will pay about 60% of the cost of building out an FTTH system to 150 homes in the Paradise Valley community, in the hills east of Morgan Hill. It was the second time commissioners considered the grant. The first time, they kicked it back for more work.

This time around, the debate wasn’t really about the project itself. Rather, the debate centered on whether CASF grants should be put on hold until the commission sets new priorities for the program and/or the California legislature rewrites the rules completely.

Broadband subsidy priorities shouldn’t be set retroactively, commissioner Liane Randolph told her colleagues…

The applicant put together a project under our current system, proposed it to us and as we’ve discussed there are changes and kind of systemic modification we can make to the program, or we’re happy to take further legislative direction on how to prioritise projects, but I’m hesitant to not let a particular project move forward when they’ve presented it with the program we currently have in the effect and are administering it right now.

Commissioner Martha Guzman Aceves didn’t agree, saying that as it stands, the CASF program lacks focus…

The bigger driver for me is the lack of prioritisation of the program and that’s really the context. I think the legislation will inform that. Now, the bigger issue for me is that we do have a structure that I don’t currently agree with, but I appreciate that these are the rules that are in place today.

Randolph was joined by commissioners Carla Peterman and Clifford Rechtschaffen in voting to approve the project. Along with Guzman Aceves, commission president Michael Picker also voted no.

Sometimes, telecoms lobbyists can’t help telling the truth

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When I see a headline like "Broadband speeds have soared under net neutrality rules, cable lobby says", I gotta click on it. So I did and landed on an article by Jon Brodkin on Ars Technica.

There’s no Damascene conversion involved, though. What Brodkin is highlighting is how cable lobbyists, such as the National Cable Television Association (or whatever they say the acronym stands for these days), brag about faster Internet speeds, while at the same time bemoaning the infrastructure investment apocalypse that must surely follow the FCC’s 2015 decision to regulate broadband as a common carrier service…

As we can see, the NCTA has flexible messaging and applies conflicting arguments to different situations. When the NCTA tells the Federal Communications Commission that it should roll back net neutrality regulations, the association says that the rules harm investment and raise prices on consumers. But when trying to convince the public that US broadband is a marvel of innovation and that we should all be grateful to cable companies, the NCTA says speeds are soaring and that customers are paying less.

So which is it? On an aggregate basis, broadband speeds in the U.S. are still climbing, although improvements are unevenly distributed, with affluent areas getting attention and poorer rural and inner city areas not. The NCTA’s latest puff piece is based on the the most recent State of the Internet figures published by Akamai, which is a reliable gauge of worldwide Internet performance and traffic. The exact magnitude and distribution of those improvements might be open to debate, but the general trend isn’t.

On the other hand, there’s little evidence that common carrier rules have slowed infrastructure investment. Forbes thinks it has, but Brodkin’s research shows that big incumbent telecoms companies, including AT&T, Comcast, Charter and Altice, are still putting out a happy, happy, joy, joy message to Wall Street.

Broadband service is getting better for some in the U.S., and the areas where infrastructure investment is lacking never had it in the first place. Common carrier rules don’t seem to be doing any great harm. Thank you NCTA for clearing that up.