CPUC urged to recognise differences between public agencies and private companies

by Steve Blum • , , , , ,

Treat munis like munis.

A consumer advocacy group – The Utility Reform Network (TURN) – wants the California Public Utilities Commission to be more flexible in evaluating broadband subsidy proposals submitted by local governments. The comments came in response to proposed new rules that open up the California Advanced Services Fund (CASF) to organisations other than traditional telephone companies.

As the proposed rules now stand, cities (and other local agencies) would have to meet the same financial requirements as private companies (at least those that aren’t traditional telephone companies). Which includes posting a construction bond that guarantees completion of projects that receive CASF grants and loans. It’s a common enough hurdle for private companies to meet but could be problematic for cities

TURN remains concerned that such a requirement may be a non-starter for [government agencies] that may act as a disincentive to even applying for CASF monies. If the requirement remains, TURN respectfully requests that the Commission consider instituting a process whereby an otherwise fully eligible governmental candidate can appeal for a waiver of the performance bond requirement. In this manner, if a governmental entity is unable to obtain a performance bond, they may still be able to be awarded a CASF grant and thereby provide broadband services to their citizens.

Performance bonds are usually used to ensure that private companies make good on promises to public entities, and aren’t generally intended to guarantee that one government agency meets another’s requirements. There are other ways of doing that, although none are as simple (at least from the CPUC’s perspective) as a performance bond.

Comments on the proposed new rules were also filed by a group representing small, independent telephone companies and by the Office of Ratepayer Advocates (ORA), the CPUC’s in-house gadfly or watchdog, depending on how lucid they seem to you at any given moment.

The small telcos support the proposed rules as written, particularly language that establishes penalties for making untrue statements in applications. ORA just wants tougher restrictions all around. The commission is scheduled to vote on the rules at its 5 February 2014 meeting.