Cities, independent ISPs not welcome in FCC rural broadband experiment

FCC keeps friends close, and telephone companies closer.

Only traditional telephone companies, or companies and agencies that jump the same regulatory hurdles, can apply for grants to take part in the FCC’s upcoming rural broadband experiment program. That’s the word today from the California Public Utilities Commission.

Commissioner Catherine Sandoval led a workshop at the CPUC’s San Francisco headquarters this morning to look at how the FCC’s request for “expressions of interest” in its rural broadband program plays out in California. It’s fair to say it’s complicated, but there are some clear red lines…

  • Only Eligible Telecommunications Carriers (ETCs) can receive money from the FCC’s Connect America Fund, which is the source of the subsidies.
  • Cities or ISPs or anyone else who wants to take part, and get paid to do so, have to follow the laws in their state.
  • To qualify as an ETC in California you need to have a Certificate of Public Convenience and Necessity (CPCN) issued by the CPUC, which involves a lengthy and (to put it kindly) traditional process. States differ, so YMMV.
  • Incumbent and competitive local exchange carriers – old school, regulated telephone companies – have CPCNs already.
  • For the most part, independent ISPs do not.
  • Local Californian governments do not have CPCNs either. I can’t swear there isn’t an exception somewhere in our vast and noble state, but cities are exempt from CPUC oversight and avoid unnecessary regulatory entanglements like the plague.

It’s not game over though. Not completely. Not yet exactly.

Independent ISPs can apply for a CPCN and then apply for ETC status, all whilst applying to take part in the FCC’s subsidised rural experiments. But the CPUC is taking more than a year to process CPCN applications from ISPs these days. Don’t expect a lot of love from the FCC if your project schedule includes years of processing time. And by the way, your business plan also has to include voice service and all the legacy regulatory overhead that goes with it.

Cities can partner with a telephone company. This being an experiment, why not? Well, because it’s something new and the deadline for expressions of interest is 7 March 2014, and neither telephone companies nor cities do new in two weeks.

On the other hand, cities or independent ISPs can put whatever they want into an expression of interest letter and file it on 7 March. It’s not an actual application to participate – that comes later, probably May (or June or…). You can express your interest and leave the details for later. You can urge the FCC to loosen the rules (although there’s not a lot they can do quickly enough, given the federal laws involved). You have a chance to make your case for broadband system construction and operation subsidies. It might be a slim chance but if you don’t even try it’s no chance at all. It’s the difference between slim and none.