Tag Archives: public policy

California broadband subsidy program heads for the deep freeze

With the stroke of a pen, governor Jerry Brown transformed the California Advanced Services Fund (CASF) into a piggy bank for AT&T and Frontier Communications. Carve outs for federally subsidised service areas and the right of first refusal on unserved areas give them an opportunity to claim CASF money for the projects they want to do, and block independent projects virtually everywhere else in their service areas.

Going forward, two questions need to be answered: what will happen to pending CASF infrastructure grant applications and how will the California Public Utilities Commission implement the new rules?

Earlier this year, the CPUC went through a preliminary information gathering exercise, in anticipation of assembly bill 1665 becoming law. No conclusions were reached, but one can hope that action will come faster than the 14 months it took to get from the last legislative rework of the CASF program to the first applications accepted under it. Technically, that application window is still open and a project proposal could still be submitted but, given that AB 1665 took effect immediately, there’s no clear path for review and approval.

The same is true for the four pending CASF grant applications. One, in the Kennedy Meadows area in the southern Sierra was submitted by the Ducor Telephone Company is on reasonably firm ground, at least from a statutory perspective. Ducor is a small rural incumbent telco, and has the same rights as Frontier and AT&T in its very limited service area.

But the other three – Surfnet in Santa Cruz County, Renegade in Santa Barbara County and the second phase of the Connect Anza project in Riverside County – are less certain. Past practice indicates that those applications should be evaluated under the rules in effect when submitted. But all three are, to one extent or another, in Frontier’s newly protected service area. Frontier tried to stop a San Bernardino County project by falsely claiming 1. they would have the entire area upgraded by August (they didn’t) and 2. that protecting federally funded areas was already California policy (it wasn’t); it is safe to assume that opposition to the pending projects will be just as fierce and disingenuous.

The only certainty is that nothing will happen quickly. Two of those projects – Surfnet and Ducor – have been stuck in the evaluation process for more than two years, despite a CPUC time limit of three and a half months for such reviews.

The days of big, state-subsidised independent broadband projects are over in California.

The hunt is on for a “balanced solution” to preemption of local wireless discretion

Preemption of municipal ownership of street lights and other vertical infrastructure failed in Sacramento this year because of overreach, not because there’s fundamental opposition to the concept. Mobile carriers and other telecoms companies will deploy bus loads of lobbyists armed with bags of cash sincerely worded nonsense arguments to push it through again next year.

The California legislature approved senate bill 649 by a slim, but sufficient, margin. Governor Jerry Brown finally nixed it, but said in his veto message that “there is something of real value in having a process that results in extending this innovative technology rapidly and efficiently”.

It’ll be back. The question is what will it look like?

One clue comes from a senate committee hearing this past May. After flying through the senate energy, utilities and communications committee – chaired by the bill’s author, Ben Hueso (D – San Diego) – SB 649 landed in the governance and finance committee. It’s supposed to look after concerns of local governments, and at least some senators – Mike McGuire (D – Sonoma County) chief among them – took that responsibility seriously.

A somewhat less one-sided version was negotiated with lobbyists for mobile carriers, and then approved by the governance and finance committee. It wasn’t enough to bring city and county associations on board, but it does offer a clue as to what might qualify as the “more balanced solution” Brown wants. One key provision allowed local agencies to charge $850 a year for wireless equipment attachments to street lights, traffic signals and other vertical assets, instead of the $250 annual lease payment that was eventually approved.

In some Californian cities, $850 would still be below market rates, but statewide it wouldn’t be the complete gift to wireless companies that SB 649 eventually became. Combined with more generous allowances for cities and counties to hold particular assets off the market for their own reasons, it might be just enough tip the balance.

CPUC posts final decision allowing CenturyLink to buy Level 3

The final version of the California Public Utilities Commission’s decision allowing CenturyLink to buy Level 3 Communications was just released. There are no apparent changes from the draft on the table when the CPUC unanimously approved it last Thursday – minor formatting aside, that could not happen under CPUC rules. Even an obvious typo on page 3 wasn’t corrected.

Download: CPUC decision approving settlement regarding proposed transfer of control of the Level 3 operating entities, 12 October 2017.

California broadband subsidies are now a rigged game

The era of state-subsidised independent broadband projects is over in California. It ended Sunday night when governor Brown signed assembly bill 1665 into law, with immediate effect.

AB 1665 added $300 million to the California Advanced Services Fund (CASF) specifically for infrastructure subsidies, but drastically changed the way the money can be spent. It’s messy and meandering, like most pork laden bills, but the key elements are:

  • The money has to be spent in areas where broadband service is available at less than 6 Mbps download and 1 Mbps upload speeds. A small fraction of the money might go to areas with 10 Mbps down/1 Mbps up in the future, but the critical number is the 1 Mbps up. That’s the limit for AT&T’s and Frontier’s ageing 1990s DSL systems in rural communities.
  • Even then, telcos, cable companies and wireless operators will be able to exercise an annual right of first refusal and block projects in areas that would otherwise qualify for funding. There’s a nominal requirement that whoever blocks projects has to upgrade service, with the help of CASF money of course, but loopholes allow delays that are long enough to kill any independent project that’s on the drawing board.
  • AT&T and Frontier will have the exclusive right to CASF money in areas where they’ve accepted federal subsidies under the Connect America Fund program, at least until mid–2020. The census blocks that have been awarded those federal subsidies are scattered in checkerboard fashion across rural California, effectively killing the business case for independents to expand in whatever CASF-eligible areas might be left.
  • Individual homeowners may apply for means-tested grants to pay some of the cost of building line extensions to their property. As a practical matter, it means cable companies, like Comcast, that have line extension charges built into their business models will be able to tap up to $5 million from CASF to get to homes that are just outside of their existing service areas.
  • By the California Public Utilities Commission’s estimate, the number of CASF-eligible households will plunge from 300,000 to 20,000. I’ve run the numbers too, with similar results: regardless of which assumptions you use, eligibility will drop from hundreds of thousands of homes to tens of thousands.

Most, if not effectively all, of those homes will be reserved for AT&T and Frontier. The game is egregiously rigged in their favor. Such hope as might be left rural California can be found in the words of Robert A. Heinlein:

Certainly the game is rigged. Don’t let that stop you; if you don’t bet you can’t win.

Wireless lobbyists will keep swinging in the California legislature

By Fcb981 (Own work) [GFDL (https://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0 (https://creativecommons.org/licenses/by-sa/3.0/)], via Wikimedia Commons

Senate bill 649 is dead, following a late night veto by California governor Jerry Brown. In his veto message, he was sympathetic to the needs of mobile carriers and other wireless providers, but called for a better balance with the interests local governments have in managing the public right of way.

Translation: try again next year, with something that’s not quite so one-sided.

It’s a sure bet that wireless carriers and their lobbying fronts will be back, along with cable companies, wireline telcos and their lobbyists looking for their slice of the bacon. It won’t be hard to find a biddable legislator – several come to mind – who will simply regurgitate whatever nonsense he’s given. Or she, but so far it’s been the guys who have carried the major local preemption bills at the behest of wireless carriers.

This year it was Ben Hueso (D – San Diego), the chair of the senate energy, utilities and communication committee, who “authored” SB 649, and vigorously, if not always coherently, defended it.

Last year it was assemblyman Mike Gatto (D – Los Angeles), likewise chair of a key committee – what was then the assembly utilities and commerce committee. He waited until the middle of the session to gut and amend an unrelated bill – AB 2788 – and turn it into something that looked a lot like what SB 649 became. Gatto didn’t have the mojo to get it passed; AB 2788 withered away in the senate without a vote.

In 2015, assemblyman Bill Quirk carried AB 57, which rolled back local discretion over wireless siting, and put deemed approved teeth into federal “shot clocks”. It was signed into law by Brown, and now cities and counties have three to five months to approve wireless site applications, with some allowance for brief pauses. Otherwise, those applications are automatically granted. Quirk was also a principal co-author of SB 649 and successfully carried AB 1145 this year. That bill gave cable companies access to public money usually reserved for public utilities, but without the corresponding obligations.

Gatto left the legislature last year, but is considered likely to be running for something next year, perhaps a statewide office. Hueso and Quirk will be back, though.

Brown approves $300 million gift to telcos but vetoes streetlight giveaway

Just before the clock hit midnight last night, California governor Jerry Brown signed assembly bill 1665 into law, but vetoed senate bill 649.

AB 1665 takes effect immediately. It lowers California minimum broadband service standard to 6 Mbps download/1 Mbps upload speeds and adds $300 million to the California Advanced Services Fund for broadband infrastructure, to be spent under rules will give it to AT&T and Frontier in exchange for token upgrades. That they would, in most cases, be making anyway.

Unless the legislature overturns Brown’s veto – an unlikely scenario – SB 649 is dead. It would have forced cities and counties to lease streetlights and other vertical infrastructure to wireless companies at a price far below market value, and would have given them open access to most other publicly-owned property.

In his veto message, Brown said making it easier to deploy wireless technology was a worthy goal, but SB 649 was tipped too far in favor of wireless companies…

There is something of real value in having a process that results in extending this innovative technology rapidly and efficiently. Nevertheless, I believe that the interest which localities have in managing rights of way requires a more balanced solution than the one achieved in this bill.

Brown is setting the stage for another attempt next year. It’s a safe bet that it’ll happen. Getting access to street light poles and traffic signals, among other things, and rolling back the ability of local governments to manage permits for wireless infrastructure is a top priority of telecoms lobbyists. Particularly mobile carriers, but also wireline telcos and cable companies that see wireless technology as a way of supplementing their existing service.

Or in the case of Frontier and AT&T, using it as an excuse to downgrade infrastructure by ripping out rural copper networks and replacing them with fixed wireless systems that, at best, will arguably meet the new, lower service standards approved by Brown.

Still waiting for Brown to decide and the dust to clear on California broadband bills

https://upload.wikimedia.org/wikipedia/commons/d/db/Jerry_Brown_Official_Portrait_as_Governor.jpg

Forty years ago, when Jerry Brown was in his first term as California’s governor and I was a cub reporter covering the capitol, he had a reputation for agonising over his legislative decisions right up to the last minute. As he went on to a second term, and then a third and fourth, he and his office became more disciplined and efficient, and usually finished working through the stack of bills sent by the legislature with time to spare.

Not so this year. I can only speculate, but it doesn’t take much of a crystal ball to see that a week of the worst fires in California’s history would throw even the most meticulous work plan out the window.

So, we’re still waiting to learn what will become of assembly bill 1665 and senate bill 649, two major broadband bills written by lobbyists representing deep pocked telephone and cable companies, and passed with varying degrees of enthusiasm by the California legislature.

Brown’s office issued a legislative update late this afternoon, listing which bills had been signed into law and which were vetoed. Neither AB 1665 or SB 649 were on it. But as the deadline nears, the proportion of vetoed bills tends to go up, and this year is no different: 31% of the bills on this afternoon’s list were vetoed, versus 26% yesterday and 25% the day before. It’s very possible Brown could veto both.

Or he could do nothing and let them become law automatically at the stroke of midnight, two hours from now.

His office might or might not put out another update tonight. Even though the decision will be made, by action or default, we might not get positive confirmation until sometime tomorrow.

It’s still a waiting game.

California broadband decisions down to the final day

Governor Jerry Brown signed 40 bills into law yesterday, and vetoed 14 more, but didn’t act on the two major pieces of broadband legislation sitting on his desk: assembly bill 1665, which would lower California’s minimum service standard to 6 Mbps download and 1 Mbps upload speeds, and senate bill 649, which preempts local ownership of street light poles and other vertical infrastructure.

He did approve AB 1145 which gives cable companies public money reserved for public utilities, without public utility obligations.

If he doesn’t act by midnight tonight, the bills automatically become law.

One way or another, major California broadband policy decisions due this weekend

**Update, 15 October 2017, 0754**: no decision yet on AB 1665 or SB 649. Governor Brown signed AB 1145 into law yesterday.

There are two significant broadband-related bills remaining on governor Jerry Brown’s desk, and one relatively minor one, and he’s leaving them until the last minute. For each, he must choose one of three options by 11:59 p.m. Sunday:

  • Sign it into law.
  • Veto it.
  • Do nothing and let it become law automatically Monday morning, at the stroke of midnight.

The two big ones are assembly bill 1665 and senate bill 649. AB 1665 would lower California’s standard for acceptable broadband service to 6 Mbps download and 1 Mbps upload speeds. It also sets aside $300 million for infrastructure deployment under rules that all but guarantee that the money will go to AT&T and Frontier Communications in exchange for minimal service upgrades that they would, in most cases, be doing anyway.

SB 649 is potentially an even bigger gift of public assets to telecoms companies. It requires local governments to lease out vertical infrastructure in the public right of way – streetlight poles, traffic signals and pretty much anything else that sticks up in the air – to wireless companies for $250 a year. That’s below – far below, in some cases – the market rate in most California cities. It also requires cities and counties to lease out other property, whether they want to or not, and prunes back their already limited discretion over where wireless infrastructure can be installed.

Then there’s AB 1145. It gives cable companies access to payments from local government for utility undergrounding projects, without requiring them to meet the obligations that normally fall on a public utility. Cable industry lobbyists also managed to get some deal sweeteners slipped into AB 1665 and SB 649 – cash is king, and Comcast, Charter and friends give a lot of it to California lawmakers. As do AT&T and Frontier.

On the other hand, Brown is hearing from a growing list of opponents) to AB 1665, and nearly every California city and county has gone on record against SB 649. The political heat is rising.

Guessing which way Brown will decide to go is a long running, and frustrating, game in Sacramento. The only thing we know for sure is that we don’t have long to wait.

CPUC leaves heavy lifting to feds, okays CenturyLink-Level 3

Update, 18 October 2017: the CPUC posted the final decision, no changes:

CPUC decision approving settlement regarding proposed transfer of control of the Level 3 operating entities, 12 October 2017.

CenturyLink’s purchase of Level 3 Communications has the blessing of the California Public Utilities Commission. In a unanimous vote yesterday, commissioners approved a decision authored by administrative law judge Regina DeAngelis that grants permission, subject to various administrative requirements and compliance with a settlement agreement reached with consumer advocacy groups. There was only a brief comment from commissioner Cliff Rechtschaffen, regarding minority contracting goals.

The settlement dances around the central problem posed by the merger: the increasing concentration of California’s already uncompetitive market for dark fiber and other wholesale services. CenturyLink will have to work with the groups – including the California Emerging Technology Fund, which was otherwise shut out of the decision – to identify a project, or maybe more than one, that’ll expand middle mile fiber infrastructure in under and/or unserved areas. But assuming this new infrastructure is eventually built, there’s no requirements regarding how, or even if, it’ll be offered to potential customers.

There’s a capital investment target, but it’s squishy. CenturyLink committed to $323 million in capital spending in California over the next three years, but only “aspires” to invest in network expansion and upgrades or meeting customer demand. That’s a loophole big enough to march a platoon of accountants through.

There are weak requirements for CenturyLink to honor existing service contracts in California for two years, and to give 90 days notice if – when – it exits the dark fiber business.

The only bona fide effort at protecting market competition so far has come from the federal justice department, which is forcing CenturyLink to give up control of a couple dozen fiber strands on key intercity routes, including five in California.

The remaining hurdle is permission from the Federal Communications Commission. Given the justice department’s okay, that seems likely to come soon, perhaps today but no later than early next week, if the FCC sticks to the timeline posted on its website.