If CPUC doesn’t change broadband subsidy rules, results will still disappoint

by Steve Blum • , , , ,

Waiting for AT&T to light up Point Arena.

The towns of Pt. Arena and Gualala in Mendocino County, on California’s northern coast sparked debate at the California Public Utilities Commission last week. Commissioner Michel Florio used them as examples of communities that don’t have Internet service at all, as he questioned whether the CPUC should spend $1.8 million to build a fiber-to-the-home system for somewhere between 32 and 159 households in the Sierra National Forest, in Madera County.

While arguing for the Madera project, commission president Michael Peevey claimed Florio was wrong. “Last Saturday, I was at Trinks restaurant in Gualala, they have Internet service there, I used it.”

Who’s right depends on what you consider to be broadband service. Peevey is correct in saying that there’s more than absolutely nothing there. Central Valley Cable offers Internet service in at least some parts of the area, but it’s less than the CPUC’s minimum of 6 Mbps down/1.5 Mbps up. AT&T, the incumbent phone company, doesn’t offer DSL in either town, and slow mobile broadband connections only in Pt. Arena. Verizon and U.S. Cellular also offer substandard mobile service. The CPUC’s field testing indicates it would be frustrating, at best, to rely on mobile providers on that part of the coast.

The facts support the point that Florio was making: spending millions of dollars to bring the best Internet technology available to dozen of homes, while leaving larger communities – hundreds or thousands of households – with antiquated and increasingly useless service for many years to come is difficult to justify.

There’s no obvious solution. Individual service providers decide where they want to upgrade broadband infrastructure and apply for subsidies. The backwoods of Madera County are served by Ponderosa Telephone Company, which also is willing to spend millions of dollars of its own money (the CPUC only pays 60% to 70% of the cost of subsidised projects). The Mendocino coast is served by AT&T, which isn’t. A new law passed by the California legislature, but largely written by lobbyists for telephone and cable companies, make it difficult – perhaps impossible – for competitors to use broadband subsidy money to challenge substandard incumbents.

But the CPUC still has a great deal of control. If commissioners don’t like the way the game is being played, they need to change the rules.