Frontier Communications won’t be able to double dip on California and federal broadband subsidies, and Charter Communications won’t have to follow rules that tie price commitments to infrastructure subsidies. Yesterday, the California Public Utilities Commission made those decisions as it approved California Advanced Services Fund (CASF) grants totalling $12.7 million for five projects, two by Frontier and three by Charter.
Frontier is getting $11.3 million to upgrade DSL-based service for 381 homes in Lassen, Modoc and Kern counties, and to build a middle mile link from Alturas, in Modoc County, to Standish, in Lassen County. As with its past CASF grants, Frontier is only promising to deliver slow broadband service at 10 Mbps download and 1 Mbps upload speeds.
In May, Frontier applied for $13.5 million for the two projects. The CPUC chopped out $2.2 million because the Federal Communications Commission is already paying Frontier, through the Connect America Fund program (CAF II), to serve some of the homes included in its original CASF proposal. According to the resolution approving the Lassen/Mono project…
Frontier accepted $473,487.74 in CAF II grant funding to provide broadband access to 187 unserved households in the project area. This represents a $2,532.02 per household subsidy provided by the CAF II program and any remaining costs to connect CAF II households should be paid with Frontier’s own private capital, as Frontier has stated in its comments to this resolution. Based on the last-mile funding determination, Frontier is responsible to fund $936,239.91 of the $1,409,727.65 project costs to build to CAF II locations.
A similar calculation was made for the Kern County project.
Charter, on the other hand, got almost everything it wanted. The three projects approved yesterday are in Riverside, San Bernardino and Ventura counties. The $1.4 million award is only $49,000 less than requested and, crucially, the CPUC waived service price guarantees and installation fee waivers that normally come along with CASF subsidies. The dubious rationale was that 1. Charter’s billing system isn’t set up to handle exceptions for such small areas – a total of 279 homes are involved – and 2. it was nice of Charter to even ask for the money. It’s the first time that a major cable company participated in the CASF program, which is reckoned to be a significant milestone.
Both companies have two to three years to finish construction. Charter’s projects are minor extension to existing hybrid fiber-coax systems and can be done quickly. Frontier’s Kern County build isn’t much more complicated, but it’s Modoc/Lassen project is complex. The real question is whether it’ll be able to survive as a company with its current capital and ownership structure intact.
CASF broadband infrastructure grant resolutions approved 19 December 2019:
Charter Communications – Highland Orchid Drive, Country Squire Mobile Estates , Silver Wheel
Frontier Communications – Northeast Project: Phase1
Frontier Communications – Taft Cluster