CPUC affirms relevance of broadband pricing and caps, approves subsidies for five Californian projects

The California Public Utilities Commission said yes this morning to spending $4.8 million from the California Advanced Services Fund (CASF) on five rural broadband projects.

Commissioners approved the subsidies unanimously and without discussion. The resolutions included language rejecting unsupported mobile broadband coverage claims made by Verizon and indicating that the commission considers broadband pricing and data caps to be relevant issues, if not formal criteria, when it decides whether to subsidise competitive broadband projects…

In addition, while the Commission in [its decision setting out rules for the CASF program] did not include broadband performance measure other than speed, the wireless broadband service offerings include data caps and pricing that are more restrictive than the proposed project’s service offerings which has lower prices and no explicit data caps.

One of the resolutions approved this morning called out Verizon’s hypocritical protest of pricing considerations, that it’s benefited from in the past…

[CPUC] staff agrees with Race that Verizon’s request to delete the discussion relating to price does not have merit. Race cites Resolution T–17350 as an example where the Commission in the past has discussed existing pricing of broadband service in a proposed project area.

Resolution T–17350 gave Verizon $286,000 from CASF last year to upgrade DSL service in the Mono County community of Crowley Lake. In approving it, the commission denied a challenge from a wireless ISP, using even more direct language…

The challenger charges customers at the 3/1 speed tier $149.95/month for service, over $100/month more than Verizon commits to charge potential customers for service at similar speeds. While the definition of “underserved area”…does not include a requirement that customers actually purchase the service and is silent regarding the price a provider should charge for service…staff found it problematic to uphold a challenge that essentially is incompatible with the CASF mission of providing broadband access to those currently lacking it. Upholding the challenge may discourage consumers in Crowley Lake and Swall Meadows from receiving advanced communication services, and the economic and social benefits that flow from such services, because their best option is not at a price they can afford.

Pricing and data caps could figure into upcoming commission decisions. One proposal, made by ViaSat, seeks to claim exclusive CASF subsidy rights over a vast swath of western California for service that’s also expensive and severely capped.

The big ticket item this morning was $3.4 million given to Race Telecommunications for an FTTH build in the high desert town of Boron. Adding in its Tehachapi FTTH project, Race has received $16 million in grants so far in this round of CASF applications. One of its proposals – for FTTH systems in four small Mono County communities – is still pending. Two other projects, in Mojave and California City, were pulled following successful challenges by Charter Communications, the incumbent cable company.

Ponderosa Telephone Company received $900,000 for an FTTH and DSL upgrade in Fresno County. A second project in Madera County was put on hold until 14 November 2013. WillitsOnline received $272,000 in grants plus a $41,000 loan for DSL upgrades in Mendocino County. Pinnacles Telephone Company was awarded $195,000, also for a DSL upgrade, in San Benito County.

CASF applications and approved projects, as of 31 October 2013.

All totalled, the CPUC has given $28 million in grants, plus the $41,000 loan, to ten of the thirty-two broadband infrastructure projects submitted last February. Seven proposals, including the two from Race, aren’t moving forward, and fifteen are still under consideration, including Ponderosa’s Madera County project.

I’ll post the final-final versions when available, but the drafts as approved this morning are here:

Boron
Boonville
Westport
Pinnacles – San Benito
Ponderosa – Fresno

Tellus Venture Associates assisted with several CASF proposals in the current round, including the Pinnacles project, so I’m not a disinterested commentator. Take it for what it’s worth.