Tag Archives: public policy

Make California broadband subsidy decisions on basis of impact, says CPUC draft

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Given that there’s limited state subsidy money available for broadband infrastructure upgrades in California, it makes sense to spend it in a way that’ll have the greatest impact on the greatest number of people. That was a major concern at the last California Public Utilities Commission meeting, when some commissioners pushed back on proposed infrastructure construction grants from the California Advanced Services Fund, at least partly because it wasn’t clear how the projects that were on the table fit within overall, statewide priorities. Or what those priorities might be.

A possible methodology for making those decisions was floated by CPUC staff, in a whitepaper published last Friday. You can read the details of how the data was crunched in the paper itself. In general terms, the analysis began by comparing the housing density of areas that lack acceptable broadband service – the CPUC’s baseline standard is 6 Mbps download and 1.5 Mbps upload speeds – and coming up with 46 Californian communities with population density greater than 150 households per square mile. That list was narrowed down by filtering out areas with problematic terrain, or that don’t meet the CASF “unserved” legal requirement, or where a fixed wireless operator is present, regardless of the standards (or lack thereof) those operators meet, or that have broadband service that meets the federal government’s lower standard of 10 Mbps down/1 Mbps up (boosting upload speeds requires a higher level of technology and greater service provider diligence than improving download speeds).

That left 13 communities that were designated as “high impact areas” and would move to head of the CASF subsidy line if this preliminary methodology is eventually adopted.

The whitepaper’s analytical approach is very similar to the one that the Central Coast Broadband Consortium used in 2014 to identify the areas in our region where broadband construction subsidies would likewise have the greatest impact. In fact, it uses our initial density-based screening criteria, with much appreciated due credit. There’s a fair debate to be had over which metrics to use and how to weave them into an analytical framework, but the basic approach is correct. With dwindling funds and dimming prospects for getting more, CPUC broadband subsidy decisions should be driven by objective data and systematic analysis.

California broadband subsidies back on the table in Sacramento

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The California Advanced Services Fund (CASF), which is California’s primary tool for subsidising new broadband infrastructure in under and unserved areas is once again in play in Sacramento. Friday was the deadline for lawmakers to introduce new legislation for the 2017 session, and four CASF-related bills are now in the hopper.

However, none of the bills are substantive at this point. All four are simply placeholders, awaiting agreement, action or obstruction from the players involved. Friday was the deadline for new bills, but once a bill has been introduced, it can be amended without limit, including replacing the text completely and substituting what amounts to a completely new bill – also known as gut and amend – almost right up to the end of the legislature’s session in August.

Assembly bill 854 was introduced by assemblywoman Cecilia Aguiar-Curry (D – Yolo County). Aguiar-Curry is new to the legislature, having formerly been mayor of Winters, where she was a strong advocate for broadband development. As written it makes a couple of meaningless edits to the law that authorises CASF. That might not be its final form, though – now that it’s drafted, it can be edited as the year goes on.

The same is true of AB 928 by assemblyman Bill Quirk (D – Hayward) and senate bill 460 by senator Ben Hueso (D – San Diego County). Both make the same small edit – changing a notional deadline from 2015 to 2020.

Last year, Hueso, who is the chair of the senate’s energy, utilities and communications committee, used a CASF-related bill to allow more time to use the money to install broadband facilities in public housing properties. Quirk also rocked up with a CASF-related bill last year, but it was an AT&T-written counter move to a bill that would have added more money to CASF and increased the opportunities for building new infrastructure. It’s likely that Quirk, who has shown no real interest in broadband development beyond what AT&T and other incumbents prefer to do, intends once again to use his bill as a bargaining chip if and when a fully fleshed out CASF bill is under serious consideration.

The final bill, AB 1655 by Eduardo Garcia (D – Riverside County), has more new text in it, and even goes so far as to create a new pot of money to fund broadband marketing efforts – adoption programs is the term used – and generally restructure the program, but it is simply a framework for discussion at this point. As written it contains no new money for CASF, which is dwindling down, and doesn’t have specifics about how the program would be run.

None of the bills are ready to be considered, but the placeholders are on the table and the backstage wrangling can begin.

The worse your broadband, the harder price hikes hit, FCC data says

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Broadband service is getting more expensive, particularly if you’re on the slow side of the digital divide. The Federal Communications Commission just published its 2017 urban benchmark rate survey, which it uses to set prices and data caps for subsidised rural service – via the Connect America Fund, for example – as well as standards for lifeline service.

In 2016 (which is the benchmark year for 2017 rates), urban customers subscribing to packages with download speeds of 10 Mbps, upload speeds of 1 Mbps per second and a data cap of 100 gigabytes per month – in other words, the slowest and lowest service – paid $76.49 per month. That’s $7.33 more than a year before, an 11% increase. Customers with the highest end service in the survey – 25 Mbps down, 5 Mbps up and no data cap – saw their bills go up only $1.52, increasing 2% to $90.76.

As the table above shows, the lower the level of service you buy, the greater the price increase you have to bear, both on an absolute and percentage basis.

One caveat: the benchmarks are based on the prices and terms that are offered by Internet service providers, and not on the average price that consumers actually pay. In other words, customers with low end packages might be – probably are – paying less on average than the benchmark price because when presented with a choice of comparable packages, the microeconomic assumption is that they’ll opt for the cheaper one.

Urban and suburban residents in California can typically – but not always – choose between service from a cable and a telephone company, for example, so they can make that choice. On the other hand, the benchmark rate, which also factors in expensive fixed wireless prices, would be the best that many rural residents might be able to get from the single, federally subsidised provider that serves their area.

No common carrier rules, but draft bill leaves room for net neutrality

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Say goodbye.

A republican-backed bill introduced in congress in 2015 might be the best clue we have regarding where broadband regulation is headed at the federal level. Shortly before the Federal Communications Commission redefined broadband as a common carrier service, and then used that authority to establish a code of conduct for Internet service providers – the network neutrality rules – senator John Thune (R – South Dakota) and representative Fred Upton (R – Michigan) circulated draft legislation aimed at short circuiting that action.

The bill didn’t go anywhere and there was no chance that president Obama would have signed it anyway. But it’s resurfaced recently as the Trump administration and the new republican majority at the FCC start peeling back the net neutrality decision. A story by Ali Breland in The Hill says that Thune is willing to move ahead with a compromise that would leave some restrictions in place.

His 2015 draft is a likely blueprint. It would keep the headline elements of net neutrality, such as requirements that Internet service providers “may not block lawful content, applications, or services” and that they “may not throttle lawful traffic by selectively slowing, speeding, degrading, or enhancing Internet traffic based on source, destination, or content” or “engage in paid prioritization”. All “subject to reasonable network management”.

But that’s about it. The bill would have also banned the FCC from treating broadband as a common carrier service or otherwise expanding its authority over the Internet.

Some in congress – in particular, Marsha Blackburn (R – Tennessee), the chair of a key house subcommittee – would prefer to wait and see what the FCC does. Even Thune’s approach, which he considers to be a compromise that’ll attract bipartisan support, might be too much for other republicans. Whether or not remnants of net neutrality rules remain, it appears increasingly certain that the classification of broadband service as a common carrier utility will not survive much longer.

Two nuggets of broadband policy gold offered to Trump administration

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It’s in there somewhere.

So as not to throw the baby out with the bathwater (although it’s a small baby in an ocean of bathwater), it’s worth highlighting a couple of genuine wins in the last gasp “progress report” from the Obama administration’s federal broadband opportunity council.

The acknowledgement by the federal economic development agency (EDA) that broadband infrastructure is eligible for grant funding is particularly valuable, since it’s backed up with cash. EDA is now encouraging local agencies to “incorporate broadband investments (if applicable) into their regional economic development strategies along with other assets such as transportation infrastructure, energy, land use, etc.” Whether or not that beneficence will continue into Donald Trump’s reign is still an open question, but at least it’s standard operating procedure for now.

Contrast that to the USDA’s broadband funding programs, which are largely restricted to incumbents (although that includes electric utilities, under some circumstances) and mostly involve loans, which also favor current monopolists over competitive start ups.

The second small victory comes in the form of a memo from a federal environmental protection agency executive telling staff to try to be efficient when evaluating infrastructure projects. Such efficiency…

Includes allowing entities laying cable to take advantage of trenches opened for EPA-funded projects or projects under EPA oversight where feasible, appropriate, environmentally sound, and consistent with statutory, regulatory or court-ordered requirements.

I appreciate your efforts to ensure that agency employees, grantees, contractors and our state and tribal partners all understand that the EPA supports a “dig-once” approach to environmental and human-health infrastructure investments when projects can also support greater broadband access for the American public.

Yes, there’s an abundant supply of weasel words in there, but the good news is that it leans in to the Trump administration’s regulatory fast track mind set. If anything gets chopped, it’ll be the weasel words.

Too little, too late from the federal broadband opportunity council

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Received and filed.

It’s called a progress report, but there’s not much progress to report. And the safe bet is that the federal broadband opportunity council will go into hibernation, rather than continue with whatever progress it might have made. Nevertheless, the council published a valediction of its efforts as the Trump administration was walking in the door.

The council was formed in 2015, following Barack Obama’s community-broadband-king-for-a-day speech in Iowa in January of that year. It was a federal version of the California Broadband Council (CBC), which likewise attempts to bring high level officials together to coordinate broadband programs and policies. Unlike the CBC, which at least began its life with major decision makers at the table, the federal council leaped straight into mediocrity with a line up of middle managers from the deep bureaucracy.

There were a couple of genuine advances, such as making it much easier to use economic development administration grants for broadband planning and infrastructure projects, and the startling admission from the environmental protection agency that placing a fiber optic cable in an otherwise existing trench might not harm the environment. Might not. More on that tomorrow.

Otherwise, the report is mostly bureaucratic jargon larded with euphemisms for we’ll get around to it later. Consider…

“DOT encouraged…”
“GSA and BroadbandUSA have discussed…”
“BroadbandUSA…is beta testing…”
“ATJ engaged with NSF…although no ATJ-related proposals were selected for funding…”
“The Office of Educational Technology requested funding…”

Even definitive promises came to naught. The report said that “NTIA’s BroadbandUSA website will be relaunched in January 2017″, but here it is February and nothing has changed. Either the new website wasn’t as far along as the report indicated, or the incoming administration hit the delete button.

I’m betting it’s the latter: all the signals coming out of the white house and the FCC indicate that broadband infrastructure development is to be left to the private sector, in particular incumbent monopolists.

CPUC broadband subsidy skepticism grows, grants on hold

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A proposal to build a 300 mile middle mile fiber network connecting remote communities in northern California to high speed Internet access might or might not be in line for extra cash. The Digital 299 project would go through the mountainous terrain along state route 299 from Redding in the Sacramento Valley, through Trinity County and on to Eureka on the Humboldt County coast.

Yesterday, the California Public Utilities Commission weighed a recommendation from staff for a $41 million subsidy from the California Advanced Services Fund against pleas from local communities along the proposed route for an extra $6 million that they believe is necessary to make the project financially viable. They also asked for a waiver of performance bond requirements and closer coordination of environmental reviews.

No action was taken, but commissioner Carla Peterman promised to draft an alternate version of the decision and bring it back for a vote. It’s an open question, though, whether at least two other commissioners will go along with it. Liane Randolph indicated she was favorably inclined, but as he often does, CPUC president Michael Picker complained about a lack of strategic broadband vision – ironic, since it’s his job to provide that kind of leadership – and said “I’m likely to vote against this under any circumstances”.

It was the first time the two newly appointed CPUC members, Martha Guzman Aceves and Clifford Rechtschaffen, had a chance to consider CASF broadband infrastructure subsidy policy or specific proposals. Rechtschaffen echoed Randolph’s comments, but Guzman Aceves joined Picker in taking a harder line. Like Picker, she also pushed back on a second CASF grant proposal, for the Light Saber project, a small fiber-to-the-home system in a leafy neighborhood in southern Santa Clara County. It’s a much smaller build, but still involves a substantial amount – $1 million – and Guzman Aceves was skeptical about spending state subsidy money on high income communities.

The Light Saber proposal was pulled indefinitely, at least until commissioners have a chance to consider setting broadband deployment priorities. Digital 299 will likely back for a second look sooner, perhaps at the next commission meeting in March.

Cable, mobile companies fight California rural phone standards

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A California Public Utilities Commission decision slamming the practices of telecoms companies in rural areas – like attaching lines to trees instead of poles – and requiring carriers to notify both the commission and the state office of emergency services when significant telephone outages occur has been met with a broadly based challenge from California cable and telephone companies.

In a filing authored by Comcast lawyers and joined by Charter, Cox, small telcos, Verizon’s fiber subsidiary and lobbying fronts for the cable and mobile industries, the CPUC’s rural call completion decision was characterised as illegal on the basis of a long list of alleged procedural mistakes.

AT&T and Frontier – the primary targets of the decision – aren’t a part of this challenge and have yet to be heard from.

The big issue is whether carriers will have to report smaller telephone service outages to the CPUC than previously required, and also quickly notify emergency officials. That’s a three part problem, in the eyes of the challengers. First, they’re not completely clear about whether “carrier” applies to all phone companies, including cable companies that offer phone service, as the plain word would imply, or just to certain ones, such as traditional rural incumbents. Second, they don’t like the idea of having to tell state emergency operations centers when lines go down, because they’re used to keeping that kind of information secret and if they tell public safety officials then someone might find out the phones are out. Hey, no one would notice otherwise.

Finally, the threshold for reporting outages to the CPUC was lowered to a level that’s more consistent with rural circumstances. The previous standard was geared for large, densely populated areas and was high enough that a small rural community could be completely cut off and no report would have to be filed. The whole point of the decision and investigation behind it was to address problems that rural communities have with phone service, which doesn’t set well with companies that provide the service and, at times, cause the problems.

Usually, these kinds of challenges amount to we don’t like the decision so it’s gotta be illegal, and are typically rejected by the commission. This one might be different, though. The challengers are correct in pointing out that the process was out of the ordinary. The decision was written by former commissioner Catherine Sandoval and it was scheduled for a vote at her final meeting. Usually, when commissioners have objections to a draft decision – as some did in this case – the matter is bumped to a later meeting so changes can be made and reviewed. Instead, the document was rewritten on the fly during the meeting, and then a vote was taken, with two commissioners – Carla Peterman and Liane Randolph – dissenting.

If the CPUC rejects the challenge, it’s not likely to end there. The tone and the substance of the arguments make it clear that Comcast, Charter, mobile carriers and the rest think they’ll win if they take it to court.

CPUC decision on rural call completion issues, 15 December 2016
Coalition application for rehearing of decision on rural call completion issues, 3 February 2017

CPUC set to reject cable’s bid for wireless privileges

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Decision on the way.

Update: the CPUC unanimously approved the draft decision at its 9 February 2017 meeting.

It’s a bit softer than the total smack down that was originally floated, but the latest draft of a decision that’ll go in front of the California Public Utilities Commission still says that cable companies can’t hang wireless equipment on utility poles with the same carefree abandon as mobile carriers. The reasoning is that the laws that grant cable companies the special privilege to use utility poles and such without having to meet the same standards of service or conduct as telephone companies specifically mention wires, not wireless, and that “if the legislature had intended to provide CATV corporations with a right to attach wireless facilities to utility poles – either by statute or by commission regulations – the legislature would have done so”.

The lobbying front used by Comcast, Charter and other cable companies in Sacramento – the California Cable and Telecommunications Association (CCTA) – asked the CPUC for the same pole access rights given to mobile carriers and similarly licensed companies last year. After chewing on it for a few months, commission president Michael Picker posted a proposed decision in January definitively rejecting the request and effectively saying don’t bother asking again. It drew a hard line between “‘cable’ television service”, which generally involves television and a cable of some kind (albeit with other offerings, such as broadband, allowed alongside), and pure telecoms services that lack video or a wire or both, such as wireless Internet, mobile phone and fiber back haul services.

In the sort of response you might expect to get from someone who just realised that their legal maneuver boomeranged, leaving them arguably worse off than before, CCTA asked to withdraw its request and cancel the whole proceeding.

The revised decision – posted yesterday – gives CCTA the ability to refile its request “without prejudice” and tightens up some of the language so that the hole it dug for itself isn’t quite as deep. But it leaves the essentials intact. It’s scheduled for a commission vote on Thursday.

Net neutrality on a fast track to oblivion at FCC

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No doubt about intentions.

In his short time as Federal Communications Commission chairman, Ajit Pai hasn’t actually said he’s going to scrap the 2015 decision to classify broadband as a common carrier service, and with it the network neutrality rules that depend on it. But in comments he made last week and in the substance of his big news dump on Friday, it’s clear that he’s moving quickly in that direction.

Among the actions announced late Friday afternoon was the cancellation of investigations into the zero rating practices of AT&T, Comcast, Verizon and T-Mobile. The question was whether offering customers unlimited free data to watch video sold by the carriers while charging fees and enforcing data caps on outside content violates the core principle of network neutrality: that broadband providers can’t use their control – monopoly or otherwise – over Internet access to gain a competitive advantage over other content providers.

In a preliminary finding, released in the final days of the Obama administration, the FCC said yes it does, at least where AT&T and Verizon are concerned. At the time, Pai blasted the report and said change was on the way. And so it was.

Pai also shredded draft decisions that would have regulated wholesale broadband rates and cable companies’ set top box practices, and revived an effort to exempt small and medium sized ISPs from transparency requirements. Like the zero rating investigation, all of those depend on broadband being classified as a common carrier service.

When that decision was made two years ago, then-chair Tom Wheeler labeled it the “Open Internet Order”. No longer. Pai, who speaks carefully, if often verbosely, now calls it the “Title II Order” and FCC staff are following suit. That characterisation is correct. Title II, which is FCC jargon for common carrier regulations, is at the heart of the decision and net neutrality or an open Internet or transparency or wholesale rates are issues that follow from it.

Words matter, particularly in government. Eliminate the common carrier classification and everything else disappears too.