CPUC, California lawmakers need to be as rational as a telecoms monopolist

by Steve Blum • , , , ,

Update: the CPUC delayed action on the Gigafy Phelan project, and rescheduled it for consideration at its 25 May 2107 meeting.

Frontier Communication’s request to the California Public Utilities Commission to squash a potential competitor is economically rational – it has a monopoly and wants to keep it – which is why it should be rejected. Utility regulators exist to moderate monopolist impulses, not turbocharge them. If the CPUC rejects a $29 million infrastructure grant request from Race Telecommunications for its Gigafy Phelan fiber to the premise project, it will be handing over effective broadband ownership of 8,000 San Bernardino County homes to Frontier, which in turn will redline 3,000 of them because they haven’t been blessed with federal subsidies. Of the remaining 5,000, only a fraction will receive service that meets the CPUC’s minimum standard of 6 Mbps download and 1.5 Mbps upload speeds.

I made that point in reply comments I filed on Friday with the CPUC, as a rebuttal to the challenge Frontier mounted. I also debunked Frontier’s attempt to invoke assembly bill 1665, which would kill Race’s project if it actually makes it into law…

The bill in question – Assembly Bill 1665 – has not been enacted or similarly endorsed by the California Legislature. It is a controversial bill which has only been heard in a single assembly committee. In fact, a Frontier representative raised objections to the bill during the hearing…

It is disingenuous in the extreme to characterise AB 1665 as California policy or, indeed, anything other than a wish list submitted for consideration by its prospective beneficiaries, which include Frontier Communications, its objections notwithstanding.

Frontier’s objections to AB 1665 amount to almost isn’t good enough, I want it all. Which make plain its intent to use policy makers as tools to cement its grip on rural broadband customers while scooping any available subsidy money into its own pocket. Which is a completely and economically rational way of looking at the world. The CPUC and California legislators should respond in kind.

Race Telecommunications reply comments on Resolution T-17525 – CASF grant to construct the Gigafy Phelan project, 5 May 2015
Tellus Venture Associates reply comments on Resolution T-17525 – CASF grant to construct the Gigafy Phelan project, 5 May 2015