CPUC antes up $5 million for student hotspots and laptops, but the pot’s not right yet

by Steve Blum • , , , ,

A plan to spend $5 million on mobile hotspots and inexpensive Chromebook-class laptops, for students to use at home while schools are shut down during the covid–19 emergency, is set for a 7 May 2020 vote by the California Public Utilities Commission. Comments on the draft resolution are due 27 April 2020.

The California Department of Education (CDE) would manage the money and target schools that have the greatest need.

The draft resolution and the original request from CDE are a bit vague on the definition of a hotspot. But connecting all the dots in the two documents draws a picture of mobile network-enabled WiFi devices, and not the amenity-grade public WiFi access points touted by the lobbying front organisation that represents Comcast, Charter Communications and other cable companies in Sacramento.

The money would specifically come from money in the California Advanced Services Fund that’s earmarked for digital literacy and subscription sales – AKA “adoption” – programs…

Only the costs of acquiring computing devices and deploying hotspot devices are allowable expenses. The Commission anticipates that the costs per computing device will not be more than $300 per device. The cost per hotspot device has not been determined but the Commission assumes that costs incurred will be reasonable.

The draft resolution leaves a big grey area for commission staff and CDE to navigate. As it points out, “the adoption account does not allow subsidising the costs of providing broadband service to households”. That restriction is baked into California law, courtesy of lobbyists for cable and telephone companies, and their non-profit helpmates, who didn’t want to create a potential revenue source for competitors but did want a $20 million slush fund to supplement their marketing budgets.

Distributing mobile hotspot hardware is one thing. Lighting it up is another. Purchasing a hotspot that comes with, say, a year’s free service might be a way around that restriction, assuming cable and telephone companies don’t use scorched earth tactics to defend their monopoly model lock on low income communities, as Charter has repeatedly done.

T-Mobile, for example, offers schools hotspots with unlimited service (with the usual caveats about slowing down heavy users) for a net $324 for 12 months and $364 for 24 months, assuming a hardware cost of $84.

On an egregiously rounded, back-of-the-envelope basis, $5 million will buy 12 months of connectivity for 15,000 households or 24 months for 14,000 households at those prices. Or $300 laptops for 17,000 homes. Or both for something like 8,000 homes. Bulk buys can bring costs down and $300 is high end for a Chromebook but, even so, it’s all in the same ballpark.

CDE also has an offer from Google to provide 100,000 hotspots and 4,000 Chromebooks. If there’s cash in that deal, and not just merchandise, it could help solve the millions for marketing but not a dime for service problem, as well as increase the number of homes reached.

In its request to the CPUC, CDE said that 188,000 California students lack Internet access at home and 203,000 don’t have a device that will allow them “to participate in a digital distance learning experience”. Assuming two students per household, $5 million will only fill something like 10% of the gap, and combining it with Google’s contribution would extend that to maybe as much as a quarter of the shortfall.

It’s a good start. Now we have to figure out how to get to the finish.