CPUC commissioners to decide if Digital Path’s sharp dealing deserves taxpayers’ money

23 November 2020 by Steve Blum
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Three card monte

Not every project proposed for a broadband infrastructure grant from the California Advanced Services Fund that could have been waved through and approved administratively was. Nine grant requests from Charter Communications received a “ministerial” blessing, but a proposal from Digital Path was bucked to the five CPUC commissioners for a decision.

Digital Path wants $415,000 from CASF for fixed wireless facilities to cover 279 homes, mostly in Sutter County, with a few in Placer County. Cover, not necessarily serve. According to the draft resolution prepared by staff for consideration by commissioners, only 97 households are expected to sign up.

Service level is an issue. The best Digital Path says it can deliver is 50 Mbps download/10 Mbps upload speeds with a 500 GB monthly data cap for $103 a month. Its cheapest market rate offering is $78 a month, for 25 Mbps down/5 Mbps up with a 250 GB cap. Its concession to low income customers is to offer qualifying households 10 Mbps down/2 Mbps up with a 190 GB cap for $39, more than twice the CPUC’s $15 benchmark rate for low income homes.

The draft resolution calls out pricing as a barrier to availability, as well as Digital Path’s disingenuous attempt to wall off vast swaths of California from federal broadband subsidies

DigitalPath’s pricing plans do not provide reasonable accommodation for the rural, typically low-income communities it primarily serves. The Sutter Placer Project would contribute to the CASF program goal to serve 98 percent of households per consortia region; however, the goal is not consequential if affordability is a barrier to adoption.

Additionally, DigitalPath challenged the highest number of [Rural Digital Opportunity Fund] locations in the United States. While the Federal Communications Commission (FCC) disqualified a significant number of those, DigitalPath still had a high number of challenges sustained by the FCC, and those areas were subsequently removed from RDOF eligibility. Although the Sutter Placer Project has no RDOF overlap, DigitalPath submitted ten other CASF Infrastructure applications proposing projects that had RDOF overlapping census blocks, of which six projects no longer have RDOF overlap because of DigitalPath’s challenges. Removing RDOF-eligible blocks from a CASF project means the provider claims it already offers at least 25/3 Mbps service to the census block, which calls into question the need for CASF funding. It also means state CASF funds would be used in lieu of potential federal RDOF funds. For these reasons, Staff recommends Commission consideration by Resolution.

Translation: Digital Path is gaming the system.

And, it appears, misleading the CPUC or, perhaps, the FCC, about the level of service currently available in the census blocks where it’s seeking CASF subsidies. To apply for a CASF infrastructure grant, an Internet service provider has to make the case that broadband service in a given census block is either non-existent or slower than 6 Mbps download/1 Mbps upload speeds. When it first tried to block federal subsidies in its turf, Digital Path claimed that it was offering speeds of at least 25 Mbps down/3 Mbps up in 40,000 census blocks, including 419 of the 492 census blocks where it applied for CASF money.

CPUC commissioners should take the hint from staff, and reject Digital Path’s grant application. Taxpayer dollars shouldn’t be used to subsidise expensive, substandard service for the fraction of homes that can afford it or reward playing Three Card Monte with census blocks and service reports.

The Connected Capital Area Broadband Consortium (CCABC) assisted DigitalPath and I assisted CCABC. I also kibitzed on other projects. I have opinions about what the CASF program should be about (in case you haven’t noticed). I’m not a disinterested commentator. Take it for what it’s worth.