CPUC takes another look at a Santa Clara County FTTH subsidy

by Steve Blum • , , ,

A stalled Santa Clara County fiber to the home project might get back on track this week. A proposed $1.1 million grant for the Light Saber Project is scheduled to go in front of the California Public Utilities Commission next Thursday.

It’ll be the second time that commissioners have taken a look at it. LCB Communications/South Valley Internet, an independent Internet service provider in southern Santa Clara County, applied for a $2.8 million grant from the California Advanced Services Fund (CASF) in 2015 for a plan to build out fiber to more than 500 homes in the San Martin and Paradise Valley communities, south and east of Morgan Hill, respectively. A wireless ISP challenged the application, claiming it provided service at or above the CASF minimum of 6 Mbps download and 1.5 Mbps upload speeds. The result was that San Martin, where most of the homes and lower income households were located, was removed from the project.

That left 150 homes in Paradise Valley. The grant request was trimmed to $1.1 million and sent on to the commission for consideration in February. It ran into headwinds at the meeting: the idea of subsidising FTTH service to a relatively affluent community was not well received. The median household income in Paradise Valley is $102,000 per year, which is quite a bit higher than many other communities in California. On the other hand, it’s in Santa Clara County, where the California housing and community development department sets a low income threshold of $85,000 for a four-person household.

No vote was taken and Light Saber was sent back for more work. Some of the details were adjusted, the budget was trimmed a bit, and now it’s being resubmitted to commissioners. But as the new draft of the grant resolution points out, it "is substantially the same as the prior draft resolution". What might have changed, though, is how the project is viewed in the context of the CASF program rules and project grant standards. The CPUC is considering whether to change those rules, in a process that was initiated, in part, because of the push back on Light Saber as well as the Digital 299 project, which was likewise put on hold at the same meeting. When Digital 299 came back for a vote and was approved in March, there was an acknowledgement that it had been submitted with good faith reliance on the rules as written. That reasoning applies equally well to Light Saber.