A $511,000 broadband upgrade grant for a cable system owned by CalNeva in Fresno County was unanimously approved by the California Public Utilities Commission at its 11 May 2017 meeting. The commission also signed off on environmental clearances and released $17 million in grant and loan subsidies for the Bright Fiber FTTH project in Nevada County. The $29 million proposal by Race Telecommunications for an FTTH system in the Phelan area, in San Bernardino County was bumped to the commission’s 25 May 2017 meeting.
Federal subsidies are in the pink.
As might be expected, Frontier Communications objects to a proposed $29 million California Advanced Services Fund subsidy for a fiber to the home project in its San Bernardino County territory. Its first instinct was to try to a backdoor approach at the California Public Utilities Commission, but that was rebuffed. So yesterday Frontier filed formal comments urging the CPUC to kill the Gigafy Phelan project when it comes up for a vote next week.
There are a few problems with its arguments against it.
First, it claims it’s going to upgrade the area that Race Telecommunications wants to serve. Well, not the entire area. Only 60% of the homes. And Frontier is very careful not to mention what that upgraded service will be. That’s because it’s only willing to commit to meeting a federal subsidy program’s 10 Mbps download/1 Mbps upload standard, as its previous filings at the CPUC have made abundantly clear. That service level does not meet the CPUC’s 6 Mbps down/1.5 Mbps up minimum. So even if the upgrade is completed in August, Frontier’s service in the Phelan area will still be substandard, for both the 40% of homes it’s bypassing and for many, if not all, of the remaining 60%.
Second, it makes a very odd argument against tapping two subsidy programs in one area. The CASF grant, which would give a gigabit to 100% of the homes in the project area, comes from California taxpayers, who also contribute to the federal Connect America Fund program that is financing Frontier’s substandard upgrade. It’s a fair point that taxpayers should only be paying for one broadband upgrade project, but should it be the one that offers a gigabit for $60 a month or the one that’ll lock in ten or twenty year old technology for the next twenty or thirty years?
There’s no way that Frontier will pass up that money, though. In fact, it doesn’t pass up money even when it means engaging in the kind of double dipping that it so piously objects to in its letter to the CPUC. In 2015, Frontier pursued, and received, CASF and federal subsidies to prop up its ageing DSL infrastructure in the Humboldt County town of Petrolia.
Frontier is entitled to play subsidies as dealt. But it’s gross hypocrisy to complain about the game when the other guy ends up with better cards.
A fiber to the premise project for San Bernardino County – largest yet – is scheduled to go in front of the California Public Utilities Commission in May. A draft resolution was published on Friday, which proposes to award $29 million to Race Telecommunications from the California Advanced Services Fund (CASF) to build an FTTP system in and around the San Bernardino County communities of Phelan, Piñon Hills, Oak Hills and Hesperia.
As designed, it would pass 8,400 homes, which is “the most households ever given access by a CASF-subsidized last-mile project”, according to the draft. Race is projecting a 68% take rate, which amounts to 5,700 subscribers. Another 85 potential business and institutional customers will also be reachable via the system. The subsidy comes out to $3,400 per premise, which is in line with past CASF-funded FTTP projects. In the past two years, the CPUC has approved $48 million for eleven FTTP proposals totalling 12,400 homes, a $3,900 average all up. On a project basis, the median subsidy $7,000.
As with its past CASF-subsidised projects – Race has received eight CASF grants and completed work on four – its plan calls for offering symmetrical gigabit service for $60 a month to residences. Businesses would pay $200 for 100 Mbps service. There’s no mention of data caps for either.
The Phelan project also marked another first for the CASF project. After Race submitted its initial application for a $48 million subsidy, Ultimate Internet Access – another ISP with a CASF track record – submitted a competing proposal, which would have cost less than half that. During the ensuing months of back and forth discussions, the project area was adjusted and costs were trimmed. Race came back initially with a $23 million subsidy request, but after further changes to project plans and service area the final tab ended up at $29 million.
Bridgeport and Walker in northern Mono County will get gigabit-class fiber to the home service, if the California Public Utilities Commission votes to approve a $3.1 million grant from the California Advanced Services Fund (CASF), as recommended by a long delayed draft resolution prepared by staff.
The grant would go to Race Telecommunications, which has been building fiber to the home systems along and near the Digital 395 middle mile fiber route. Both the last mile systems and Digital 395 have benefited from CASF subsidies and, in the case of the Digital 395 project, a federal broadband stimulus grant.
Combined, the two towns have 444 homes which do not have access to broadband service at the CPUC’s minimum standard of 6 Mbps download and 1.5 Mbps upload speeds. Originally, another 125 homes in Coleville – four miles to the north of Walker – was included in the proposal, but was removed because Frontier Communications had exercised its right of first refusal under CASF rules, and promised to upgrade the town. As a result, Coleville will be left out of the FTTH project.
People living in Bridgeport and Walker, though, will be able to buy symmetrical gigabit service for $100 a month, as well as tiers at slower speeds, starting at $25 per month for symmetrical 25 Mbps service.
The Gigafy North 395 project was proposed by Race almost two years ago, on 31 December 2014. The CPUC is expected to vote on it at its 1 December 2016 meeting. At that point, it will be nearly 600 days late – CASF rules, as approved by the commission, set a 106 day deadline for staff to process a grant application and either reject it or get it in front of commissioners for a vote. Even if you start the clock counting from the point where the Frontier-served homes in Coleville were pulled out, the resolution is still more than a year overdue. Welcome, but overdue.
Frontier’s federal CAF2 subsidised census blocks.
Two competing proposals to build a fiber to the home system in the San Bernardino County town of Phelan and surrounding communities are now a lot closer to meeting in the middle.
More than a year ago, in August 2015, Race Telecommunications submitted a proposal asking the California Public Utilities Commission for a $48 million grant from the California Advanced Services Fund (CASF) for its Gigafy Phelan project – that’s 60% of the then-estimated construction cost to reach about 10,000 homes with fiber. In January, Ultimate Internet Access filed an application for a $21 million subsidy to serve more or less the same number of homes in more or less the same area.
In the ensuing months, both companies have been in discussions with CPUC staff. As a result, UIA bumped up its request by $662,000 and Race slashed its proposal by more than half, to $23 million, and reduced the subsidised share from 60% of construction costs to 50%.
The CPUC posted the revised project descriptions last week, giving incumbents another formal chance to challenge the applicants’ position that the area is underserved, in other words the broadband service that’s available now doesn’t meet the minimum CASF standard of 6 Mbps download and 1.5 Mbps upload speeds. As a matter of practice, though, incumbents are allowed to challenge a CASF project proposal right up until the time the commission votes on whether or not to approve it.
Facts on the ground have changed somewhat over the past year. Frontier Communications has taken ownership of the telephone system serving the area, and has accepted federal subsidies to upgrade broadband service in much of it to at least the FCC’s 10 Mbps download and 1 Mbps upload speed standard. Charter Communications, which offers video but not Internet service, is under a CPUC order to upgrade its TV-only systems in California to broadband capability, at a minimum of 60 Mbps download speeds. Neither upgrade has actually happened yet, though.
With no discussion and plenty of advocates in attendance, the California Public Utilities Commission unanimously approved a $7.7 million construction subsidy for a fiber to the home project in Occidental and grants for three regional broadband consortia and 12 public housing programs. It also rescinded five previously approved but currently stalled California Advanced Services Fund infrastructure projects, putting $4.5 million back into the kitty. More details here.
UPDATE: The CPUC approved the Occidental project and the consortia and public housing grants, and rescinded subsidies for the five dormant CASF projects in a unanimous, consent agenda vote this morning.
Occidental, a small community in rural Sonoma County, will get gigabit broadband service for $100 a month, if the California Public Utilities Commission approves a $7.7 million construction grant at its meeting later the morning. The fiber-to-the-home project was proposed earlier this year by Race Telecommunications and originally specced at serving 757 homes. That number was reduced to 458 after agricultural land and vacant lots were factored out. That didn’t change the total price tag, so the per household subsidy from the California Advanced Services Fund would be $16,800.
But what the CPUC giveth, it can taketh away. Five previously approved projects are about to have $4.5 million in funding rescinded. More details on those are here. Only one of the recipients objected. In a the dog ate the homework sort of letter, WillitsOnline asked to keep its $149,000 grant for a DSL upgrade in the Mendocino County town of Westport, but hinted it would need more money to get it done. The resolution in front of commissioners today would reject that request but encourage WillitsOnline to reapply for what was looking like a significantly different project.
Three regional consortia are up for grants totalling $737,000 that would allow them to carry on their broadband development work, for two years in Tahoe, three years in the East Bay and five years on the Central Coast.
A dozen public housing communities in San Francisco and the Sacramento area are up for a total of $507,000 in grants to run digital literacy programs. That resolution would also change the rules and allow the programs to give out refurbished computers that are up to five years old – the current limit for CASF subsidies is two years.
I’m the project lead for the Central Coast Broadband Consortium, and the East Bay and Tahoe consortia are my clients. I’m not a disinterested commentator. Quite the contrary. Take it for what it’s worth.
No future here.
Fiber to the home service is coming to a string of small Mono County communities generally along U.S. highway 395 (and along the Digital 395 fiber backbone), but one – Lee Vining – will be left out.
The California Public Utilities Commission approved a $6.6 million grant to Race Telecommunications from the California Advanced Services Fund (CASF) to build out FTTH systems in South Chalfant, Benton, Benton Hot Springs, Swall Meadows and Mono City. But commissioners excluded Lee Vining because AT&T and Verizon offer mobile broadband service there.
The mobile service that’s available won’t support the kind of services and applications that wireline systems can – that point was confirmed by CPUC staff. High definition, interactive video streaming is an example, and it’s not just about being able to watch Netflix.
“That type of video is increasingly critical for taking classes and is absolutely critical for medical types of applications”, said commissioner Catherine Sandoval. “Truly, it’s where the future is going”.
Unfortunately, it’s not where the majority of CPUC commissioners are heading. Despite the fact that the project would pass north through Lee Vining anyway in order to reach Mono City, three commissioners – Liane Randolph, Carla Peterman and president Michael Picker – voted to exclude the town from the project. The general rationale was that the $1 million saved could be better spent elsewhere.
It was the second time in as many meetings that the CPUC has pulled particular towns out of CASF-subsidised projects because they deemed slow and expensive wireless service to be good enough, while approving money to upgrade neighboring communities to FTTH. Race will be offering the lucky towns uncapped, symmetrical 25 Mbps service for $25 per month and a gigbit for $100. People in Lee Vining, on the other hand, will have much slower service – 6 Mbps down – from AT&T and Verizon, and will be paying by the byte: to get the 50 gigabytes of data that the median U.S. consumes, Verizon’s mobile customers have to pay $350 per month, and wait a lot longer for it to be delivered.
Resolution approving $6.6 million for the Gigafy Mono project
Alternate resolution – rejected by a 3 to 2 vote – that would have included Lee Vining
CPUC staff presentation comparing the two alternatives
There’s a second bid for grant money to build a fiber to the home system in the San Bernardino County desert communities of Phelan, Piñon Hills, Oak Hills and West Cajon Valley, plus parts of Victorville and Hesperia. Yesterday, Ultimate Internet Access, Inc. (UIA) asked for a $21 million infrastructure subsidy from the California Advanced Services Fund CASF) for the project. It’s now competing directly with Race Telecommunications for the cash.
Last August, Race submitted a $48 million grant proposal, also for an FTTH build in that area. The two companies submitted nearly identical lists of census block groups, although their maps look somewhat different. Race is proposing to pass 10,028 homes at $8,000 total for each; UIA says it’ll hit 10,799 homes for $3,200. In both cases, 60% of that money would come from CASF.
One possible reason for the cost difference could be middle mile infrastructure. UIA says it’ll get its backhaul from Verizon and/or Charter. Race didn’t specify its middle mile plan in its public filing, but it usually wants to build or lease its own fiber lines that connect new projects with areas it already serves via CASF grants. For example Boron and Mojave, which are about 50 and 75 miles away respectively.
UIA is also active in the region. It’s received CASF subsidies for Helendale and Wrightwood, which are even closer.
The area has been redlined by Charter Communications, which has a video franchise there but hasn’t built out a digital system capable of providing broadband service. Verizon’s DSL service doesn’t hit the CPUC’s minimum speed of 6 Mbps down and 1.5 Mbps up, where it’s available at all.
There have been previous CASF grant proposals that have overlapped to a degree, but none have been as directly competitive as these two. There’s a scoring system in the CASF program that’s intended to sort these things out, but there hasn’t been an apples-to-apples opportunity to put it to use. Not until yesterday anyway.
“Do the folks in Trona and Searles Valley that initially expressed strong support for this project, are they aware of this change?” asked commissioner Mike Florio as the California Public Utilities Commission considered a greatly trimmed fiber to the home project proposed for several high desert communities.
“No they are not, mostly likely they are not, unless they were attending today’s meeting and received the [revised] version”, replied Rob Wullenjohn, the CPUC staff manager who oversees the California Advanced Services Fund CASF). That revised version was posted on the CPUC’s website only the day before the meeting.
The change for people in Trona and Searles Valley is mighty drastic: they’ve been cut out of project due to a last minute market entry and protest by a wireless service provider.
The discussion then dove into procedural minutia, with the consensus being that because the cutback was the result of a decision by the applicant, Race Telecommunications, the only options were to approve it or not.
That’s not true. Commissioners also had the option of bumping it to a later meeting to give the hundreds of people living in Trona and Searles Valley a chance to express an opinion and learn more details about how the cut back came about.
Commissioner Catherine Sandoval said the door wasn’t permanently shut for them. “If we were to go ahead and approve this particular application…that it would actually would be helpful to any future work. This particular application will connect to Digital 395 and also take advantage of the previous CASF grant that we granted that Race built out in Boron”, she said.
The vote was 4 to 1 in favor of the chopped down version, with president Michael Picker voting no after expressing concerns about subscriber acquisition rates.
But the door is shut for now. Three smaller towns – Randsburg, Johannesburg, and Red Mountain – will get FTTH service, starting at $25 per month for symmetrical 25 Mbps service. Trona and Searles Valley will not.