The final piece of the California broadband subsidy puzzle is on the table. The California Public Utilities Commission posted a draft of the new “line extension program”. It’s a pilot project set up by the legislature in 2017 when it rigged the California Advanced Services Fund (CASF), turning it into a piggy bank for AT&T and Frontier Communications.
The line extension program was included at the urging of cable lobbyists, who wanted to tap the piggy bank too, but didn’t want to take on any of the regulatory responsibilities that normally go along with state broadband infrastructure grants. The solution was to launder the money through customers: if they live in a home that has no access to broadband, then they can apply for a grant and give the money to an Internet service provider willing to build a line extension to them. The ISP owns the new facilities, but doesn’t have to meet other CASF obligations such as price guarantees.
The new draft rules put tight restrictions on who can qualify for the money. Instead of being simply “unserved” as the California legislature defines it (i.e. without access to broadband service at speeds of at least 6 Mbps download and 1 Mbps upload), a household has to be “non-connected”, which means it “does not have a service connection to any broadband service”, at any speed. Applicants have to live at the location that will be hooked up and have an annual household income that’s low enough to qualify for the CPUC’s other low income programs – about $34,000 for a couple and $60,000 for a family of five, for example.
There’s a per-household grant limit of $5,300 for a wireline connection and $500 for a wireless one, which can pay for up to 95% of the cost of the extension. The remaining 5% has to come from the service provider that will end up owning it. A project can include more than one eligible household, so the total grant could be more, but it could also be less if the new facilities also serve ineligible homes.
For the now, the CPUC is taking comments on the draft plan. Commissioners could vote on it as early as the end of April.