CPUC considers manifesto for broadband regulation

by Steve Blum • , , , ,

Not this Karl.

California doesn’t have a competitive market for broadband service, and the distinction between it and phone service is essentially irrelevant. With all due regard for the danger of trying to boil down 168 pages into 20 words, that’s the bottom line of a proposed decision by a California Public Utilities Commission administrative law judge.

ALJ Karl Bemesderfer was given the job of sifting through mounds of data, testimony and arguments submitted in the course of a CPUC investigation into whether there’s sufficient competition among telecommunications companies in California. His draft decision, which has to be approved by commissioners before it has any effect, was posted yesterday. Key conclusions include…

  • The residential, high-speed broadband market in all of California’s geographic markets is highly concentrated.
  • No census block in California is served by a mobile carrier that consistently achieves high-speed broadband speeds.
  • Although there are varying estimates, roughly half (or more) of California households have access to only one (or no) wireline broadband provider at speeds of 25 Mbps down and 3 Mbps up…
  • Competitors’ access to the built network infrastructure is a critical aspect of the competitive landscape for telecommunications services.

Highly concentrated is a term of art that means, in this case, that even though broadband in California isn’t technically a monopoly, the power to set prices and determine service levels in concentrated in few enough hands to thwart market forces and allow carriers – telephone, cable, mobile and fixed wireless companies – to extract rents, i.e. profits that a genuinely competitive environment wouldn’t otherwise allow.

The remedies Bemesderfer proposes “are limited to those for which we presently have clear and unambiguous legal authority”. If commissioners agree, broadband companies would have to provide detailed information regarding both last mile and, critically, middle mile services, and staff would have to supplement it with independent research and analysis.

If commissioners agree.

A vote could come as soon as 1 December 2016, or it could be bumped off into next year, when the make up of the commission might be different – two commissioners, Mike Florio and Catherine Sandoval, who tend to take a harder line regarding broadband regulation, are coming to the end of their terms and governor Jerry Brown has not announced whether or not they’ll be reappointed.

Proposed decision analyzing the California telecommunications market and directing staff to continue data gathering, monitoring and reporting on the market

Pro tip: read the whole document. There’s a lot worth learning in it.