Two projects pulled as CASF challenges come thick as flying monkeys


Just set me down in Kansas. They have fiber there.

Two applications submitted by Race Communications for California Advanced Services Fund (CASF) subsidies are off the table, leaving twenty-seven still under consideration. Of those, incumbent carriers have challenged twenty projects, claiming that some or all of the areas proposed for funding already receive sufficient broadband service and are ineligible.

Race originally put in five proposals for fiber-to-the-home systems in Eastern California. Mojave and California City – towns in eastern Kern County – are already wired and receiving service that meets the California Public Utilities Commission’s (CPUC) minimum 6 Mbps download and 1.5 Mbps upload standard. Race’s applications for Boron and the Tehachapi Pass area in Kern County and for four small communities in Mono County are still under consideration.

Taking Mojave and California City off the list drops the total CASF ask by $16 million to $223 million. That’s against about $158 million available to give out.

The CPUC doesn’t release details of the challenges submitted, but judging from conversations with applicants (including my own clients) and others, wireline and fixed wireless broadband providers are defending their turf against new competitors. Challenges from Comcast, Charter, SuddenLink, Verizon and others have been directed at competitive last mile and middle projects that encroach on their territory.

It seems likely that the seven proposals that weren’t challenged were submitted by small rural telephone companies that are the incumbents in their areas.

The largest projects have caught the most flak. By far, Golden Bear Broadband is asking for the most money and ViaSat is claiming the biggest chunk of California. Those two have also attracted the most protests.

It’s also the job of CPUC staff to independently compare eligibility claims made by applicants with service information filed by incumbents, including mobile carriers. The end result could be extensive (and possibly expensive) field testing by applicants to puncture inflated service claims by the likes of Verizon.

As of 25 April 2013.

Once all the ineligible projects have been tossed, the remaining ones will be ranked and the available money given out accordingly. Expect the review and decision process to take several more months.

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.

  • Fred Pilot

    This is the problem with fixed speed-based eligibility: it locks in obsolescence in those areas of a proposed project served by older technology (i.e. DSL and cable) and discourages the deployment of fiber to the premises — the only technology with the headroom to accommodate the Moore’s law-like growth in bandwidth demand — by competitors.

    It can also lock out those areas lacking access to wireline Internet connectivity since a proposed project that would serve these areas that are not served by incumbent providers may require subsidization across both areas that are deemed served under the eligibility rules as well as those that are not in order to be economically viable.

  • rconaway

    The CASF is as bad as the CAF. Why is government even getting into the broadband industry at all and screwing up private industry. It screws up private industry and investment, plays favorites with capitalism, and reduces competition. The providers give the end user what they need at a reasonable price but the government . Why stop at broadband, everyone needs food, let’s set up government grocery stores, and keep going, we all need clothes, how about those too. Clearly the government hasn’t done a good job with the taxpayers money for the last 100 ears and has gotten progressively worse. They can’t even run the post office profitably and they have a monopoly.

    Fred, I believe you are, FTTH is not the only technology and clearly nobody needs 100Mbps to the home anyway. It’s a ridiculous premise keeps getting perpetuated at the cost of the taxpayer. You would think the Golden Eagle fiasco that just wasted $100M tax-payer dollars would be a lesson.