Fresno broadband subsidy proposal scores two major, welcome firsts

by Steve Blum • , , , ,

Update: the CPUC unanimously approved the grant for the CalNeva project in Coalinga and Huron at its 11 May 2017 meeting.

For the first time, a cable company is in line for a broadband construction subsidy from the California Advanced Services Fund (CASF). The California Public Utilities Commission is expected to decide whether or not to give CalNeva Broadband a $511,000 grant to upgrade former Comcast cable systems in Coalinga and Huron in Fresno County and provide broadband and television service to 5,500 homes.

The technology will be hybrid fiber coax (HFC), using mostly existing plant, with about seven miles of fiber and 50 miles of coax in Coalinga and Huron. Huron will be tied to the network operations center and middle mile fiber in Coalinga via a licensed, gigabit class microwave link.

CalNeva operates small cable systems in several remote, rural communities in California and Nevada. Unlike the major cable companies, they don’t seem to mind getting involved with the CPUC. That’s a refreshing change. I’ve worked on several projects where we’ve tried to interest cable companies in participating in CASF-funded projects, and received the same answer every time: no. The problem, as they see it, is that they don’t want to come under CPUC’s oversight, even in a small way. CASF is technically a telephone industry program, and companies that get grants have to agree to live by the CPUC’s telephone industry rules. At least where the details of grant administration and obligations are concerned. Cable companies, on the other hand, have lobbied themselves clear of nearly all regulatory oversight in California and they don’t want to do anything that might endanger that status.

Another refreshing difference is the speed with which this application was processed: it’s the first time the CPUC has held to its promised timeframe. The proposal was submitted in mid-January and the draft resolution approving the grant was published last month. Assuming it’s taken up by the CPUC on 11 May 2017 as expected, it’ll be a few days past the 105 day decision deadline, but well within any reasonable expectations or practical interpretation of the rules.

When evaluating whether or not to pursue CASF grants, companies have to weigh the opportunity cost of putting investment capital – usually 30% to 40% of the total project cost cost – on ice while a decision is made. A reliably quick decision, even if it’s a fast no, is less risky and costly to broadband companies, particularly independent ones, than the endless and arbitrary process many have endured. Five other active CASF project proposals have been under review for an average of 512 days – more than a year past the deadline. And that’s not counting the ones that died of old age.

If timely decisions become the norm – and the CalNeva project shows that it’s possible – the CASF program will be a much more credible and effective way of closing California’s digital divide.