The art of estimating broadband subsidy costs by households in rural California

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It’s one house, but how many homes?

Maybe 800 homes on the western side of California’s Sierra Nevada mountains will get upgraded broadband service, many via fiber to the home connections, if a pair of draft resolutions is approved by the California Public Utilities Commission.

CPUC staff is recommending giving Ponderosa Telephone Company a total of $2.7 million from the California Advanced Services Fund (CASF). About $1.8 million would go to an FTTH build in two small Madera County communities, Beasore and Central Camp, and $900,000 would help pay for a DSL upgrade and limited FTTH service in the Big Creek area of Fresno County.

The actual number of customers to be served is uncertain. U.S. census data says there’s only 79 homes in the Big Creek area and 32 homes total in Beasore and Central Camp. On the other hand, Ponderosa claims the numbers are 635 and 159 respectively, an estimate based on seasonal and multi-tenant housing and on their existing telephone customer list. By Ponderosa’s reckoning, they’re asking for subsidies of $1,400 per home in Big Creek and $11,000 per home in Beasore/Central Camp. Using the census numbers, as the CPUC traditionally does, the subsidies jump to $11,000 and $55,000 respectively.

There’s a certain amount of art involved in counting households in remote rural areas. The census frequently misses people – particularly those who want to be missed. Several residences, of varying sorts, might be at the same address. Plus there are occupants of second and seasonal homes, who might be counted elsewhere for census purposes. Ponderosa provided documentation to back up its claim, which was further supported by aerial photographs of the communities.

Along with projects proposed by Pinnacles Telephone Company, Race Telecommunications and WillitsOnline, the two Ponderosa grants are scheduled to be voted on at the CPUC’s 31 October 2013 meeting.

Meanwhile, the CPUC will take up three others tomorrow, in Forest Hill (Placer County), Olinda (Shasta County) and Winterhaven (Imperial County).

About Steve Blum

Steve Blum is president of Tellus Venture Associates, a management, planning and business development consultancy for municipal and community broadband initiatives. He is a 30-year industry veteran and an expert in developing new broadband infrastructure and services, including wireless, fiber optic and satellite systems. His career includes playing key roles in the launch and growth of DirecTv in the U.S., as well as other satellite broadcasting platforms around the world. For the past ten years, he has helped build municipal wireless and fiber optic broadband systems. His client list includes many California cities, such as San Leandro, Palo Alto, Oakland, Los Angeles, Lompoc and Folsom. He’s a member of the executive team for the Central Coast Broadband Consortium and has worked with other regional consortia in California. Steve is the author of seven books on the Internet and satellite broadcasting and is a frequent contributor to professional journals and industry events. He holds an A.B. in History from the University of California, Berkeley, an M.A. in East Asia Studies from the University of Washington, and an M.B.A. from the University of St. Thomas. He is a triathlete and multiple Ironman finisher, and is currently ranked in the top 100 of the Challenge Triathlon world rankings, out of more than 30,000 athletes.