Tag Archives: public policy

Telcos’ California cash grab gets a nod at the CPUC

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Three parallel efforts are underway to rewrite the rules for California broadband infrastructure subsidies and use the money to support substandard service and technology deployed by AT&T and Frontier Communications. The legislature is considering assembly bill 1665, which would, among other things, add $300 million to the California Advanced Services Fund for broadband construction and operating costs, and effectively give it to AT&T and Frontier. The lower service standards and eligibility restrictions in the bill would keep independent Internet service providers out of most of rural California.

While that’s being decided, the California Public Utilities Commission is 1. tinkering with the program to bring it into compliance with a law passed last year and 2. considering what might end up being a complete overhaul of the way infrastructure grant requests are processed and prioritised.

As they’ve done so far with AB 1665, Frontier and AT&T are trying to game the system and rewrite the rules so they can lock out competitors and use CASF money as a private piggy bank to back fill their budgets and claim reimbursement for work they’d be doing anyway. They made the same self serving claims in their objections to an initial CASF priority exercise and Frontier is trying to use what should be a minor rewrite of the rules as an opportunity to grab control of the cash.

They seem to have found a willing ear at the commission. A first draft of what could become a reboot of the CASF program includes at least three gifts on big incumbents’ wish lists:

  • A lower performance standard, in particular slower upload speeds that better match the outdated first and second generation DSL systems that Frontier and AT&T maintain in rural areas.
  • Eliminating or greatly scaling back requirements that grant recipients put some of their own money into projects.
  • More opportunities to challenge applications and drag out what is already a never ending review process, including allowing annual carve outs based on promises rather than performance.

For the most part, the only regulation broadband providers face in California comes from the market, at least where it might be found. It would be a perverse outcome indeed if the CPUC – California’s utility regulator – works against the market by using taxpayer money to strengthen existing monopolies and protect them from the threat of competition.

Money lost on pole rentals is your problem, senators tell California cities

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Cities and counties will have to figure out how for themselves how to make up any losses they suffer if senate bill 649 becomes law. That’s the conclusion of a state senate appropriations committee analysis, ahead of a hearing on the measure last week. SB 649 would effectively give mobile carriers open access to city-owned property, such as light poles, at pre-determined, cut rate prices. As it currently reads, instead of charging wireless companies up to $4,000 or more a month in rent, cities could only charge rates set by legislature

Cities and counties currently negotiate lease rates for small cell attachments on publicly owned vertical infrastructure that is market based, and many local governments may use excess lease revenues to pay for other public services or to subsidize the extension of wireless service in underserved areas. This bill limits the fees that a city or county may charge for the installation of a small cell telecommunications facility on publicly owned vertical infrastructure to a range of $100 to $850 per small cell per year. Since these rates are much lower than what some current agreements provide, many local governments will lose significant discretionary revenues. Staff notes that loss of local revenues does not, on its own, constitute a reimbursable mandate.

If potentially chopping thousands of dollars per pole per year in revenue were a reimbursable mandate, then the California legislature would be required to make up the difference for cities and counties. But eliminating revenue isn’t the same as forcing cities to spend money on something, so tough luck.

In the end, the committee put SB 649 into the “suspense file”, where it will sit along with hundreds of other bills until the state budget has been passed, probably sometime in early June. Then, legislative leaders will decide which of those bills will move forward to a full floor vote. The remainder will be dead, by the rules of the senate.

FCC votes to kill net neutrality, after a fair trial of course

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Common carrier rules for broadband service are on the way out. As expected, the Federal Communications Commission voted along party lines to begin a rulemaking process that, in theory, is a neutral, technocratic assessment of current regulations that might lead to any outcome. But there’s never been any pretence that the result will be anything but a repeal of the FCC’s 2015 decision to bring broadband – wired and wireless – under the common carrier umbrella.

The agency’s official press release laid out the goals for the proceeding that was launched by yesterday’s approval of a notice of proposed rulemaking

First, the Notice proposes to reverse the FCC’s 2015 decision to impose heavy-handed Title II utility-style government regulation on Internet service providers (ISPs) and return to the longstanding, successful light- touch framework under Title I of the Communications Act.

Second, the Notice proposes to return to the Commission’s original classification of mobile broadband Internet access service as a private mobile service…

Third, the Notice proposes to eliminate the catch-all Internet conduct standard created by the Title II Order.

The Notice also seeks comment on whether the Commission should keep, modify, or eliminate the bright-line rules established by the Title II Order.

Title II is the section of telecommunications law that governs what companies that are classified as common carriers can do.

You’re likely to be disappointed if you’re hoping that the common carrier regime, and particularly the net neutrality rule, will be saved by another wave of public protest, as it was in 2014 when the democratic FCC chairman initially floated a plan that wasn’t all that much different from what’s on the table now. Republican commissioner Michael O’Rielly blew off the flood of comments that have already come in, saying “thankfully, our rulemaking process is not decided like a Dancing with the Stars contest, since counts of comments submitted have only so much value”.

Gonzales, California putting broadband into every home, business

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Basic broadband in every home and fast fiber for every business: that’s the goal endorsed on Monday by Gonzales city council members. The plan, as presented by staff, is to issue two requests for proposals.

The residential RFP is ambitious. There are 1,800 homes in Gonzales, which is located in California’s Salinas Valley. The city wants to provide a basic, lifeline-level of service to each one. As the report presented to the council explains

Staff has been exploring the possibility of entering into a bulk services agreement with a qualified Internet service provider (ISP) to deliver a basic level of Internet access to every home in Gonzales. Although this is a novel approach for a City to take, it is a common method of contracting for service in private communities. There are significant differences between the legal, regulatory and market conditions in cities and private communities, but staff has concluded that distributing a Request for Proposals to qualified ISPs, will clarify those issues and should produce legitimate options that can be implemented.

The second RFP would focus on building out fiber infrastructure in the commercial and industrial areas of the city. A recently completed middle mile project, built and owned by Sunesys/Crown Castle and largely paid for by a grant from the California Advanced Services Fund, runs the length of Gonzales, connecting to a Level 3 facility in Soledad to the south and to several long haul routes in Salinas, Watsonville and Santa Cruz to the north. The city is already in the process of building its own connection to this middle mile fiber, which will be one of the assets on the table when the RFPs are issued.

AT&T is the only company currently offering broadband service on a citywide basis, and it reaches most, but not all, homes and businesses. Download speeds range from 3 Mbps to 18 Mbps. The California Public Utilities Commission ordered Charter Communications to begin providing full triple play service to all residential areas by May 2018. That’s the result of a settlement reached between Gonzales and Charter, during the regulatory review of its purchase of Time Warner and Bright House cable systems last year. Commercial and industrial areas aren’t included in the agreement, though.

Naturally, both AT&T and Charter will be invited to submit proposals, along with any other interested ISPs. The two RFPs and more details regarding the financial and technical aspects of the plan are expected to be released later this summer.

City of Gonzales Broadband Infrastructure Strategy Update, 15 May 2017

I’m assisting the City of Gonzales with its broadband initiative and helped with its negotiations with Charter. I am not a disinterested commentator. Take it for what it’s worth.

Broadband subsidy grab by telcos, cable faces budget scrutiny in Sacramento

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The attempt to turn the California Advanced Services Fund – the state’s primary broadband infrastructure subsidy program – into a piggy bank for AT&T, Frontier and cable companies gets another hearing at the capitol today. Assembly bill 1665 will go before the assembly appropriations committee, which has responsibility for seeing that bills that raise money – in this case, reinstate a tax – and spend it are based on sound fiscal policy, both in isolation and in the context of California’s overall budget.

The legislative analysis prepared for the committee ignores several of the bill’s fatal flaws. It doesn’t mention the fact that AB 1665 would lower California’s minimum broadband speed standard to 6 Mbps down/1 Mbps up, or that it would give AT&T and Frontier Communications a protected monopoly in most of rural California, where they would not be required to upgrade service to even that level in many places.

Nor does it address the elimination of the public housing broadband facilities fund. That program is mostly used to provide free or very low cost WiFi service to people who live in public housing communities. Which seems like an innocuous enough enterprise, but it sends cable companies ballistic because it might – just might – put a dent in the revenue streams they generate from the expensive, video-heavy packages they like to sell to lower income customers.

Today’s hearing will, in all likelihood, be for show and not for go. Typically, when this kind of bill hits an appropriations committee – in either the assembly or senate – it’s shuffled into a legislative limbo known as the suspense file. It’ll sit there until the full state budget is finalised, and then legislative leaders will decide whether it will be one of lucky bills that gets sent on to a full floor vote.

It’s a bill crafted to meet the objections of cable and telephone companies that are determined to protect their monopolies at any cost. California’s lawmakers should reject it.

Oops, CenturyLink rebuttal makes the case for CPUC intervention

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CenturyLink had to say something, and there probably wasn’t much else it could say, but its response to protests filed against its proposed acquisition of Level 3 does as much to encourage a rigorous review by the California Public Utilities Commission as it does to dissuade it.

The formal opposition to the transaction comes from a coalition of consumer advocacy groups – TURN, the Greenlining Institute and the CPUC’s office of ratepayer advocates – and the California Emerging Technology Fund. CenturyLink’s response correctly points out that some of the demands have a letter-to-Santa ring to them. Suggested remedies such as employment, diversity and build out obligations are nice things, but also dance around the central problem with the transaction: California’s long haul fiber market will go from three traditional phone companies – CenturyLink, AT&T and Verizon – plus one independent – Level 3 – to just three legacy carriers with similar, monopoly-centric business models.

But what CenturyLink is trying to do right now is head off an intensive review by the CPUC, and avoid wrangling over side issues altogether. It has two problems, though. First, the CPUC has already rejected its bid for summary approval once – that boat has sailed. Second, elimination of a competitor in a market that’s already highly concentrated is exactly the sort of outcome that is adverse to the public interest and therefore grounds for rejecting the deal. As CenturyLink was kind enough to point out

In reviewing these applications over the years, the Commission has repeatedly and consistently found that the “primary question” to determine in a transfer of control proceeding under [the summary approval process] is whether the transaction will be “adverse to the public interest”…

In brief, where – as is the case here – there is no interruption of service, no change of tariffs, no transfer of operating authority, no customer transfers, no elimination of providers, the transactions have unfailingly been found not to have any adverse impact on the public.

CenturyLink then slathers on the nonsense, claiming 1. since it doesn’t directly serve Californian consumers (a genuinely de minimis extension of its Oregon network into Modoc County aside) it can’t do harm – except that without an independent Level 3 around it can squeeze competitive, consumer focused ISPs mercilessly – and 2. Level 3 will still technically be an independent company. Fortunately, CenturyLink refutes its own bullshit and later claims – without irony – that the combined company will be able to “rationalize existing facilities” and otherwise act as a single, monopoly model-driven despot.

Full review or not, CenturyLink wants to get it done by the end of September. In California, that’s not the way to bet.

Muni ISPs are as common a carrier as any other

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Buried within a half million comments about common carrier regulation of broadband service, in the midst of a system crash brought about, or not, by a John Oliver rant, is a letter from 19 municipal (to one degree or another) Internet service providers supporting the Federal Communications Commission’s current effort to roll those rules back.

In what must have been an epic, nay, herculean, speed reading session, FCC chair Ajit Pai came across those comments and felt compelled to issue a press release trumpeting the blindingly obvious conclusion that, hey, these guys agree with me so they must be pretty smart. I hope he lets his sidekick, Michael “what I am unwilling to do and will never support is allowing government-sponsored networks” O’Rielly, in on his eureka moment.

The muni ISPs make a couple of points in their letter: imposed service standards are a burden for small providers and munis don’t really need regulation since they’re directly answerable to elected officials.

Our customers have choices and can opt for another provider if we degrade their Internet experience. Moreover, because we are effectively owned by our customers and responsive to them politically, we make sure their interests are the primary drivers of our businesses. We always provide our customers with unfettered access to legal content on the Internet. We never block, throttle, or impair our customers’ traffic nor engage in paid prioritization. We have always said we would adhere to any such principles adopted by the Commission, as we have been doing since the Commission first articulated its Internet Policy principles in 2005. Yet, the Commission ignored the evidence, and imposed the straight-jacket of utility regulation, subjecting us to the constant threat that the Commission or some other party may bring an enforcement action based on the “unknown and unknowable” general conduct standard.

There is truth in their arguments. But there’s also a generous helping of disingenuousness. For example, several of the ISPs are affiliated with muni electric utilities. Being small or governed by a city council does not exempt electric utilities from Federal Energy Regulatory Commission standards or from complying with California Public Utilities Commission safety rules regarding jointly owned utility poles. And they know it.

Munis properly have latitude that privately owned utilities do not enjoy. City councils are rightly reckoned to be at least as good as the CPUC at setting electric rates and protecting consumer interests. But it isn’t a total exemption from oversight. Nor is simply being small. The federal and state rules for small rural telcos are different than those for AT&T and Frontier, but there are rules they must follow nevertheless.

Common carriers and other public utilities are subject to a complicated web of federal, state and local regulation. Dealing with it is just part of the job.

NSA shares blame with criminals for massive ransomware attack

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Cybercriminals successfully penetrated more than 200,000 computer systems in 150 countries in a continuing attack that began late last week. The initial assault was unwittingly blocked by a security blogger who triggered an off switch while trying to figure out what was going on. But that didn’t help systems that were already infected – it will can still spread from computer to computer within a network – and a new version, without the kill switch, is reported to be already out and running wild.

The ransomware encrypts data on infected networks, and demands a bitcoin payment of $300 to free it up.

It did not have to happen. The ransomware exploited a flaw in Microsoft’s Windows operating system that was 1. known to the U.S. National Security Agency and 2. leaked into the public domain earlier this year. It gives the lie to the claims of the NSA, FBI and other national security and law enforcement agencies that they can be trusted to safeguard and wisely use software and encryption backdoors, as the Washington Post’s Brian Fung explains

The NSA leak in April showed that even those vulnerabilities thought to be under control by responsible state actors can find themselves on the black market. The story of Wanna Decryptor, ultimately, is the story of nearly all weapons technology: Eventually, it will get out. And it will fall into the wrong hands.

“These attacks show that we can no longer say that vulnerabilities will only be used by the ‘good guys,’ ” said Simon Crosby, the co-founder of Bromium, a California-based computer security firm. Crosby likened the unauthorized leak of the NSA’s hacking tools to “giving nuclear weapons to common criminals.”

The NSA’s conduct was irresponsible. When it discovered the Windows exploit, it should have notified Microsoft so that the vulnerability could be fixed immediately. Instead, it kept a backdoor open to millions upon millions of computers and networks, that would have eventually been found and used by criminals, even if it hadn’t managed its own security so incompetently.

Did John Oliver take down the FCC, again?

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After another classic net neutrality rant, John Oliver is getting credit in some quarters for inspiring a flood of online comments that brought the Federal Communications Commission’s website to a grinding halt. 150,000 comments were filed in the first 36 hours after the broadcast, three times the number over the same period three years ago when Oliver issued his first net neutrality call-to-arms.

It didn’t long for the FCC’s comment system to crash, or for the agency to claim it was someone else’s fault

Beginning on Sunday night at midnight, our analysis reveals that the FCC was subject to multiple distributed denial-of-service attacks (DDos). These were deliberate attempts by external actors to bombard the FCC’s comment system with a high amount of traffic to our commercial cloud host. These actors were not attempting to file comments themselves; rather they made it difficult for legitimate commenters to access and file with the FCC.

Both random netizens and Washington, DC politicians questioned the FCC’s claim, and asked for some kind of proof.

The truth might lie somewhere in between. It now appears that a botnet was used to file tens of thousands of anti-net neutrality comments – the exact opposite of what Oliver was advocating. According to Gizmodo

Thousands of identical anti-net neutrality comments came flooding in. First noticed on Reddit and later reported by ZDNet and the Verge, more than 58,000 identical comments supporting Pai’s effort to repeal the net neutrality rules have been filed since the proceeding was opened…

Even more concerning, however, is that the names and addresses attached to those comments may not belong to whoever filed them. Both the Verge and ZDNet managed to reach a few of the supposed commenters, and found that they had no knowledge of their alleged comments.

Oliver’s campaign is on temporary hold now. Citing its procedures and rules, the FCC says it won’t formally accept comments until after it meets next week and, presumably, votes to begin the process of undoing its net neutrality decision, which defined broadband as a common carrier service

Cheap and easy access to California streetlights queued up in Sacramento

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It’s not the complete takeover of municipal property that mobile carriers originally wanted, but the latest published version of senate bill 649 would still require California cities and counties to allow on-demand access to street lights and other “vertical infrastructure” they own, often at a steep discount on the going market rate for leases…

A city or county shall not preclude the leasing or licensing of its vertical infrastructure located in public right-of-way or public utility easements…Vertical infrastructure shall be made available for the placement of small cells under fair and reasonable fees, terms, and conditions, which may include feasible design and collocation standards…Fees shall be tiered or flat and within a range of $100 to $850 per small cell per year, indexed for inflation…

A city or county shall not discriminate against the deployment of a small cell on property owned by the city or county and shall make space available on property not located in the public right-of-way under terms and conditions that are no less favorable than the terms and conditions under which the space is made available for comparable commercial projects or uses. These installations shall be subject to reasonable and nondiscriminatory rates, terms, and conditions, which may include feasible design and collocation standards.

Under current federal and state law, cities have more or less complete control over how they lease out poles, towers and other vertical assets they own and how much they charge. AT&T, Verizon and mobile industry lobbyists wrote SB 649 and recruited senator Ben Hueso (D – San Diego) to carry it for them.

It sailed through the senate’s energy, utilities and communications committee, which Hueso chairs, but ran into headwinds in the governance and finance committee, which deals more closely with local governments. Industry demands were trimmed back during closed door negotiations just before that committee voted, but even as amended SB 649 still faces heavy opposition from local governments.

Next stop is the senate appropriation committee, which is scheduled to hear the bill on Monday.