CPUC votes today on Frontier’s California cash grab

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Frontier Communications isn’t getting any sympathy yet from the California Public Utilities Commission. Commissioners are scheduled to vote this morning on grants for two southern California fiber to the home projects, in Lytle Creek, in the mountains of San Bernardino County, and Desert Shores and Salton Sea Beach in Imperial County. The subsidies would come from the California Advanced Services Fund (CASF).

You might think that Frontier would be happy with a gift of $2.7 million of taxpayer money, but it isn’t. It wants $3.3 million, which is the full tab for building the systems. Including the cost of buying customer premise equipment for customers who don’t exist – there are about 200 empty homes in the Desert Shores project area. Frontier claimed its household count was based on its own “its well tested methodology used extensively in broadband deployment”. Turns out Frontier’s “well tested methodology” involves using 2016 population figures, instead of the newer but, um, inconvenient data generated by the California finance department in 2017.

CPUC staff rejected Frontier’s arguments that the CPUC should pay for 100% of both projects, instead of the 80% and 90%, respectively, that’s currently proposed, saying…

Frontier has offered an interpretation of AB 1665 whereby every project is evaluated according to the unique set of criteria, chosen by the applicant, that will justify full funding for that project.

Assembly bill 1665 was passed by the California legislature and signed into law by governor Jerry Brown last year. The bill rewrote the rules for the CASF program, turning it into a private piggy bank for Frontier and AT&T, with some spiffs on the side for cable companies. It’s not surprising that Frontier thinks it can whack CASF with a hammer any time it’s running a little low on cash, but that’s the product of a seemingly limitless sense of entitlement, rather than a rational interpretation of the law.

So far, the give and take has been with staff. Commissioners will have the final say later this morning.