Short broadband to-do list for California legislators upon return from summer vacation

by Steve Blum • , , , ,

California lawmakers are taking an abbreviated summer break. They usually leave Sacramento for a month around July, but since they were off for so long earlier this year due to covid-19 and because of the uncertain condition of the state budget, their effective vacation was trimmed back to less than two weeks. They’re scheduled to return to the capitol a week from today. When they return, they’ll have just a handful of broadband-related bills to act on.

The assembly’s incumbent-friendly communications and conveyances committee is scheduled to take up senate bill 1130 next Tuesday, the day after the legislature reconvenes. SB 1130, carried by Lena Gonzalez (D – Los Angeles) would raise California’s minimum broadband standard to symmetrical 25 Mbps download and upload speeds, and make other useful changes to the California Advanced Services Fund. An opposing bill, assembly bill 570, that tracks with talking points pushed by cable and telephone company lobbyists, is headed for the senate’s energy, utilities and communications committee. AB 570 is authored by Cecilia Aguiar-Curry (D – Yolo), would cement in the current, pitiful 6 Mbps down/1 Mbps up standard and make other changes to the California Advanced Services Fund that suit incumbents with monopoly business models and deep pockets full of cash for pliable legislators.

SB 431, authored by Mike McGuire (D – Sonoma) has been stalled in the assembly communications and conveyances committee for more than a year, but is now scheduled for a hearing next Tuesday. Given the monied interests it offends, its prospects are dim. SB 432 would give the California Public Utilities Commission explicit instructions to established reliability standards for telephone, cable and mobile companies, and any other Internet service provider in high fire threat areas. Fortunately, the CPUC isn’t waiting for explicit instructions.

AB 2421, by Bill Quirk (D – Alameda) would require cities and counties to issue permits for back up generators at macro cell sites, following a minimal and expedited review. Those generators would also be exempt from California Environmental Quality Act requirements. AB 2421 was passed unanimously by the assembly in June, and is queued up in the senate.

Other broadband policy bills could appear as the legislature works towards adjournment at the end of August, but for now it’s a short list.

I’ve advocated for SB 1130, and for other useful changes to CASF. I am involved and proud of it. I am not a disinterested commentator. Take it for what it’s worth.

FCC chokes on Digital Path’s map spam, CPUC still chewing on it as broadband subsidy decisions for rural California are made

by Steve Blum • , , , ,

Spam

Nearly 426,000 California “locations” – homes, businesses, institutions – are eligible for the Federal Communications Commission’s $16 billion broadband subsidy auction in October. The California Public Utilities Commission has about $145 million for broadband infrastructure grants, primarily in rural communities. Both agencies have to sort out challenges from incumbent Internet service providers that want to block subsidies in order to protect their turf, as well as decide where to spend subsidy dollars.

In theory, the FCC’s Rural Digital Opportunity Fund (RDOF) could bring faster, cheaper and more reliable broadband to as many as 8 million rural Californians, because the program’s rules require ISPs to serve everyone in a given area, whether eligible for subsidies or not. It won’t be that many in practice, but it will be more than some rural Internet service providers hoped. Half a dozen wireless ISPs (WISPs) and several wireline incumbents tried to maintain their monopoly hold on large swaths of rural California by filing dubious, if not out right bogus, claims that they provide adequate service in tens of thousands of census blocks.

At the top of the list is Digital Path, a WISP that operates in many rural Californian communities with a base in the northeast of the state. It challenged more census blocks than any other ISP in the U.S.

Digital Path gave the FCC a list of 40,000 census blocks where it claims to offer service at a minimum of 25 Mbps download/3 Mbps upload speeds to nearly a million Californians. That’s fast enough that those census blocks wouldn’t be eligible for RDOF money.

As it turns out, the FCC wasn’t planning to offer subsidies in at least 35,000 of those blocks. Of the remaining 5,000 blocks, the FCC only deemed Digital Path’s map spam valid in 1,300 blocks. Even so, that was enough to eliminate about 22,000 mostly rural Californians from potential federally funded broadband service upgrades.

Digital Path’s federal filing could – should – complicate, and maybe kill, its own requests for California broadband subsidies. In May, it submitted 11 applications asking for a total of $4.8 million from the California Advanced Services Fund (CASF). To get CASF money, applicants are required to assert that each census block where they want to build is eligible for the program. Which means it lacks broadband service at a minimum of 6 Mbps download and 1 Mbps upload speeds.

Of the 492 census blocks where Digital Path is applying for CASF money, 419 census blocks are included in Digital Path’s federal challenge.

In other words, in April Digital Path told the FCC it offered broadband service at a minimum of 25 Mbps down/3 Mbps in those 419 census blocks, then a month later told the CPUC those same blocks were eligible for CASF subsidies because the available service was slower than 6 Mbps down/1 Mbps up. That assertion may have been based on the CPUC’s online eligibility map, which would not have included the service reports that Digital Path submitted to the FCC four weeks prior. Apparently, the “continuing obligation to make corrections” to service reports that Digital Path cited in its FCC challenge letter doesn’t extend to the CPUC.

In June, Digital Path made another attempt to prevent potential competitors from using subsidies to provide faster, cheaper and/or more reliable service. It filed another batch of broadband speed claims with the CPUC, challenging 12 projects proposed for CASF grants – nearly twice as many as the next most prolific challenger, Frontier Communications (which has its own credibility problems).

With $533 million in CASF grant proposals competing for $145 million in available funds, legitimate challenges will play a role in determining who wins. Character should count, too.

The Central Coast Broadband Consortium (CCBC) supported Charter’s San Benito County proposal and assisted Etheric Networks with its application. The Connected Capital Area Broadband Consortium (CCABC) assisted DigitalPath. I assisted the CCBC and the CCABC, and also kibitzed on other projects. I also have opinions about what the CASF program should be (in case you haven’t noticed). I’m not a disinterested commentator. Take it for what it’s worth.

Bill to beat down broadband subsidy program drops in California assembly

by Steve Blum • , , , ,

Liberty valence 625

It was long expected. On Monday, assemblywoman Cecilia Aguiar-Curry (D – Yolo) gutted an affordable housing bill and substituted text that would, if enacted, reaffirm that California’s broadband standard is stuck in the 1990s at 6 Mbps download and 1 Mbps upload speeds, and make it even more difficult to use the California Advanced Services Fund (CASF) to bring modern service to rural communities.

Assembly bill 570 is the cable and telephone industry’s response to senate bill 1130, which is carried by senator Lena Gonzalez (D – Los Angeles) and would raise California’s minimum broadband speed to a symmetrical 25 Mbps down and up. The AB 570 language tracks with talking points pushed by Comcast’s and Charter Communications’ Sacramento lobbying front, the California Cable and Telecommunications Associations (CCTA), and parroted by the California Emerging Technology Fund, a non-profit that takes its money from cable and phone companies these days.

They’ll be the big winners even if all AB 570 does is kill off SB 1130.

But it might go farther than that. AB 570 would also allow government agencies to tap into CASF and use it to backfill information technology and telecoms budgets. Up until now, CASF’s primary job has been to pay for upgrading rural broadband infrastructure, at least when it wasn’t being gamed by incumbents. The perilous condition of state and local government finances this year will make any new source of operating revenue very attractive to lawmakers.

That’s just in case the millions of dollars they’re paid by the likes of AT&T, Frontier, mobile companies and the cable industry isn’t sufficient motivation to embrace AB 570.

Aguiar-Curry rubbished SB 1130 during a California Forward-sponsored broadband policy webinar in May, even though she said she hadn’t read it yet. She was also a key backer of 2017’s AB 1665, which lowered California’s broadband standard to 6 Mbps down and 1 Mbps up, and turned CASF into a piggy bank for monopoly model incumbents.

This time, she’s taking the lead.

I’ve advocated for SB 1130, and for other useful changes to CASF. I am involved and proud of it. I am not a disinterested commentator. Take it for what it’s worth.

Frontier’s “pervasive lack of credibility” drives FCC’s rejection of its service claims; CPUC urged to ignore its “high level rhetoric and promises”

by Steve Blum • , , , ,

There’s rapidly increasing skepticism in San Francisco and Washington, D.C. of Frontier Communications’ corporate honesty. Frontier was blasted in two separate agency actions in recent days: the California Public Utilities Commission’s review of its post bankruptcy plans and the Federal Communications Commission’s broadband subsidy auction, as it prepares to distribute the Rural Digital Opportunity Fund.

Challenges filed by incumbent broadband providers, aimed at blocking federal subsidies in their captive rural markets, were largely dismissed by the Federal Communications Commission last week. After reviewing tens of thousands of challenges in California alone, the FCC issued its verdict and published a new list of census blocks eligible for RDOF subsidies. In unusually blistering terms, the FCC dismissed Frontier’s claims it was providing adequate broadband service in 23,000 U.S. census blocks…

Given the numerous and significant concerns in the record regarding the validity of Frontier’s filing, including its own admission that it had misfiled its June 2019 data and then misfiled (again) the data for its challenge, and inconsistent explanations for its challenge, we conclude that taken together there is a pervasive lack of credibility and accordingly deny Frontier’s challenge regarding its deployment and decline to exclude those blocks from consideration for eligibility.

Frontier’s facile attempt to convince the CPUC to approve whatever settlement comes out of its New York bankruptcy proceeding on the basis of faith in its selfless devotion to the interests of Californians was similarly slammed in protests filed this week by a major telecoms union – the Communications Workers of America (CWA) – and three advocacy organisations, and CPUC staff.

CWA and the three organisations – TURN, the Greenlining Institute and the Center for Accessible Technology – pointed to the major role that Frontier plays in California’s telecoms market, and said the CPUC…

Has a statutory obligation to conduct a full analysis of the impact of this transaction that goes beyond a high level public interest review and to require [Frontier] to provide the Commission with more than high level rhetoric and promises.

They cited, among other things, Frontier’s failure to live up to promises made when it acquired Verizon’s decaying copper telephone systems in California and questioned its willingness to meet obligations attached to state subsidies, including money from the California Advanced Services Fund.

The CPUC’s quasi-independent public advocates office also asked for a full review, citing Frontier’s “unsubstantiated claims” and demanding specific plans for “network infrastructure investments, service quality and reliability improvements, consumer protections, including pricing, and broadband deployment”.

Frontier’s wish for quick and cursory CPUC approval by October is a forlorn hope.

California tops up federal broadband subsidy bids, as FCC trims RDOF eligibility list

by Steve Blum • , , , ,

Pouring wine

Californian communities lost potential broadband subsidy money last week, but might have gained some back yesterday. On Thursday, the Federal Communications Commission eliminated 48,000 “locations” – homes, businesses, community facilities – in what appears to be 3,100 census blocks from the preliminary eligibility list for the Rural Digital Opportunity Fund (RDOF), following a review of tens of thousands of challenges from incumbent broadband providers who wanted to freeze out potential competitors. I say “appears to be” because the FCC’s numbers don’t line up with census bureau stats – that discrepancy should be resolved eventually.

Yesterday, California governor Gavin Newsom signed assembly bill 82 into law. It waives restrictions on the California Advanced Services Fund (CASF) – California’s primary broadband infrastructure subsidy program – and allows the California Public Utilities Commission to add money from it to RDOF-funded projects.

A census block is eligible for RDOF money if it lacks broadband service at 25 Mbps download/3 Mbps upload speeds. CASF subsidies are usually restricted to census blocks without service at 6 Mbps down/1 Mbps up, which means that far fewer rural homes and communities are eligible. AB 82 allows CASF funds to be spent on projects that also receive RDOF money.

RDOF subsidies are awarded via a reverse auction. Broadband providers bid down the amount of money they’re willing to accept in exchange for offering a particular level of service in a given area. Putting CASF subsidies on the table allows Californian providers to bid lower and, it is hoped, win even more federal money that’ll be spent here.

Thursday’s changes mean about 10% of the locations are gone from the preliminary RDOF eligibility list that the FCC published in March. Because of the formulae used to calculate maximum subsidy amounts, only 6% of the maximum potential money is off the table. But the maximum doesn’t mean much. The ten year total reserve price for eligible census blocks in California dropped from $2.5 billion to $2.3 billion. In theory, all of that money could end up in California. In reality, it won’t – half or a little better is a more realistic expectation.

One California rural broadband subsidy bill goes to the governor, another moves on to the assembly

by Steve Blum • , , , ,

Cvin fiber marker sr49

Friday was a good day for broadband at the California capitol, as two bills expanding eligibility for infrastructure subsidies won lopsided votes. Senate bill 1130 was approved by the senate, and now awaits action in the assembly. Following senate approval on Thursday, assembly bill 82 was blessed by the assembly and is now on governor Gavin Newsom’s desk. He’s expected to sign it today.

The big, difficult and high impact bill is SB 1130. It would raise California’s minimum broadband to 25 Mbps download/25 Mbps upload speeds, and encourage – but not require – the California Public Utilities Commission to spend California Advanced Services Fund (CASF) money on infrastructure projects that deliver similarly symmetrical 100 Mbps down and up service. SB 1130 would also impose much needed open access requirements on CASF-subsidised middle mile projects. Monopoly model incumbents are against it, and the front organisation for Comcast, Charter Communications and other cable operators – the California Cable and Telecommunications Association – is, so far, the face of the opposition.

The 30 to 10 vote for SB 1130 (there’s one abstention in there, but that has the same effect as no) was mostly along party lines. One republican – Ling Ling Chang, from Orange County, joined democrats in voting aye. She was also the sole senate republican to vote aye on SB 822, the 2018 California network neutrality bill.

The more immediately useful bill, though, is AB 82. It takes effect as soon as Newsom signs it and allows the CPUC to top up October bids for federal broadband subsidies with CASF money, even when it would be spent in places that wouldn’t be eligible for it under normal circumstances. In 2017, the California legislature bowed to telco and cable lobbyists and lowered California’s broadband standard to 6 Mbps down/1 Mbps up, in order to protect their rural low speed, high price rural business model, and to fence off lucrative, high income neighborhoods from competition. The eligibility standard for federal Rural Digital Opportunity Fund (RDOF) subsidy program is 25 Mbps down/3 Mbps up.

AB 82 passed easily with 57 ayes, with democrats and republicans on both sides of it in the 80 member assembly, and with a strict 29 to 11 party line vote in the senate. It wasn’t particularly a vote on broadband – AB 82 is a catch-all, budget clean up bill that also deals with alcohol, cannabis and privacy issues, among others.

I’ve advocated for SB 1130, and for other useful changes to CASF. I am involved and proud of it. I am not a disinterested commentator. Take it for what it’s worth.

FCC limits on cell site expansion permits challenged by California cities

by Steve Blum • , , , ,

West sac cell site

California cities are pushing back against the tighter limits on wireless infrastructure permit reviews that the Federal Communications Commission approved in a party line vote earlier this month. Three cities in Los Angeles County – Glendora, Rancho Palos Verde and Torrance – and the California and Oregon leagues of cities filed a challenge to the FCC’s ruling with the San Francisco-based ninth circuit federal appeals court.

The FCC ruling said cities, or other local agencies, can’t delay starting a 60-day federal shot clock and can’t add aesthetic requirements when granting permit for expansions or other additions to cell sites and towers, or other wireless facilities, so long as the changes are within certain limits. In other words, when the work falls under what are usually called the “6409” rules, after the section federal law involved. The FCC said that the 60-day shot clock begins as soon as a wireless company takes the first step in a permit process, whether or not they’ve filed a formal application. If the shot clock expires, the permit is “deemed granted”.

The cities and associations filing the petition for review argued, as might be expected, that the FCC exceeded its authority…

The Commission’s new rules and significant changes to its existing rules unlawfully preempt local and state government authority promulgated without response to the arguments advanced by Petitioners in the record…

Petitioners seek review of the Ruling on the grounds that the Ruling is arbitrary, capricious, and an abuse of discretion.

The cities’ filed on Monday. I haven’t seen any other appeals from any other parts of the U.S. Assuming that’s the case, it’ll be handled by the ninth circuit, which is also considering a similar, but much larger, challenge to the FCC’s 2018 preemption of local ownership of city street light poles.

That case was heard in February, by three ninth circuit judges. There’s no particular timeline for a decision, but they’ve been working on it long enough that it could come at any time. Expect a similar journey of a couple of years for this latest appeal.

T-Mobile asks CPUC for permission to employ fewer people in California

by Steve Blum • , , , ,

Sprint store

T-Mobile wants the California Public Utilities Commission to dial back some of the obligations it imposed when it approved the Sprint merger in April. A “petition for modification” of the CPUC’s decision asks for three changes:

  • Strike the order to add 1,000 new jobs in California. As it has consistently argued, T-Mobile says the CPUC doesn’t have that authority. Meanwhile, T-Mobile is offering hundreds of former Sprint employees the, um, opportunity to “consider a career change”.
  • Push back a deadline for “providing average speeds of 300 Mbps to 93% of California” by two years, to 2026. T-Mobile seems to think there was a misunderstanding. It says the clock on its voluntary commitment to reach that service level started running when the merger closed, not when it was first proposed in 2018.
  • Trust the Federal Communications Commission and the California Emerging Technology Fund, which is now on T-Mobile’s payroll to the tune of $7 million a year, to verify 5G coverage and speed promises. As it stands, T-Mobile has to prove its claims using the CPUC’s independent Calspeed testing program.

The modification request won’t have much, if any, of a direct effect on the CPUC’s decision allowing the Sprint merger and the long list of conditions it attached. The request for extra time to meet the 300 Mbps download benchmark might get some consideration, but T-Mobile’s appeal doesn’t say anything new about the requirements to add 1,000 jobs in California and to do speed testing the CPUC’s way.

The deal’s opponents will respond, of course, and the commission will take up T-Mobile’s petition and opponents pending request for a rehearing eventually. Minor tweaks aside, both are likely to be rejected. At that point, the CPUC’s lengthy – two years and counting – process will be complete, which clears the path to court challenges, at the state and federal level. That’s where the real action will happen.

Nearly all broadband subsidy proposals could survive California’s chopping block. Nearly

by Steve Blum • , , , , ,

There won’t be enough money in the California Advanced Services Fund (CASF) to pay for all the broadband projects proposed for subsidies last month. Grant requests total $533 million, but there’s only $145 million in tax revenue projected to be available for CASF infrastructure projects, as the program is designed and run now.

Something has to give. But not everything. One potential remedy is to top up project budgets with federal money. Two other possibilities are to reduce the share of those budgets paid for by CASF and/or eliminating some proposals completely.

Limited changes to CASF rules landed in the hopper at the California capitol on Monday. Two state budget clean up bills – “trailer bills” – with identical language were introduced: assembly bill 82 and senate bill 108. The tweaks allow CASF grants to be combined with subsidies from the federal Rural Digital Opportunity Fund (RDOF), even when a project area has existing broadband service that exceeds California’s achingly slow 6 Mbps download/1 Mbps upload standard. A project area is eligible for RDOF money if it lacks service at 25 Mbps down/3 Mbps up.

Maybe the feds will ride to the rescue, but that’s a question for later. RDOF broadband subsidies are awarded via a complex reverse auction that is scheduled for October. For now, Californians have to rely on what’s left in CASF for broadband infrastructure upgrades. That means pruning back the $533 million thicket of grant applications.

Start by tossing Exwire’s $4.5 million proposal for the Kingswood neighborhood near Lake Tahoe. Charter Communications filed a competing (and more plausible) application and can upgrade broadband service there for less money. Pull out Hunter Communications’ $290 million fiber project in Mendocino County, too. Even if it were cut in half, it would soak up all the money remaining in CASF. To get back into the game before RDOF money shows up, Hunter will have to dramatically downsize and redesign the project. Maybe it will, but for now consider it sidelined.

That leaves 52 grant applications, most of which are asking CASF to pay for 100% of project construction costs. If you dial the subsidy level down to 60%, the total ask drops to $143 million, which is a neat fit for the estimated money available.

The world doesn’t run that neatly, though. Requiring 40% matching funds would likely eliminate many, maybe most, applicants – bankrupt Frontier Communications comes to mind. So another way to filter out proposals is by cost per home served.

There are four projects needing subsidies of more than $50,000 per home: Darlene Road, Ventura County (Charter), Cuyama, Santa Barbara County (Frontier), Long Valley, Plumas County (Plumas Sierra Telecoms) and the biggest ask remaining, the $82 million proposal made by a startup ISP, WiConduit, in western Sonoma County. Lop off those four and the remaining 48 projects total $132 million, leaving enough in the kitty to maybe add one or two (but not three) of the high cost proposals back in.

The culling process that California Public Utilities Commission staff will ultimately use won’t be this simple. There are many ways to stray from the CASF trail. For example, some projects could be killed off by eligibility challenges from competitors. Others could be rejected because of incomplete or inchoate applications. And some applicants might be deemed unfit or unqualified – project budgets have to backstopped by letters of credit and company financial statements have to be blessed by outside accountants.

This natural attrition combined with a shot at extra money from RDOF means there’s hope for everyone. There’s even the tantalising prospect that hybrid CASF/RDOF proposals for new projects will be entertained. Stay tuned.

The Central Coast Broadband Consortium (CCBC) supported Charter’s San Benito County proposal and assisted Etheric Networks with its application. The Connected Capital Area Broadband Consortium (CCABC) assisted DigitalPath. I assisted the CCBC and the CCABC, and also kibitzed on other projects. I also have opinions about what the CASF program should be (in case you haven’t noticed). I’m not a disinterested commentator. Take it for what it’s worth.

California broadband subsidy fund dwindles to less than a third needed for pending projects

by Steve Blum • , , , ,

Sick piggy bank

With only $145 million in collectable tax revenue left to spend on broadband infrastructure subsidies, the California Advanced Services Fund (CASF) will run dry this year. Last month, 54 broadband projects totalling $533 million in grant requests were proposed for CASF funding. Many, if not all, will be trimmed and some will almost certainly be rejected completely.

My blog post yesterday details the $130 million shortfall in tax revenue collected for CASF – actual and projected – over the final five years of the program, assuming that the legislature doesn’t extend it or the California Public Utilities Commission can’t raise the tax rate applied to in-state phone bills that funds it. Most of the shortfall – almost $120 million – will hit the account that pays for extending and upgrading broadband infrastructure, mostly in rural Californian communities.

That means that the $575 million authorised by the legislature for broadband infrastructure subsidies over the past 12 years drops to about $457 million in real money. Since 2008, the CPUC has awarded $282 million to Internet service providers, nearly all as grants. There was a loan program early on, but that didn’t prove to be popular and it was wound down, with the remaining money in the loan fund reallocated to grants.

The overhead for running CASF is also paid for by the phone tax revenue. As of a year ago – the most recent figures available – administrative costs totalled $17 million since the beginning of the infrastructure subsidy program, and have risen over the years. If you assume that the $2.2 million spent on administrative costs just for the infrastructure program in fiscal year 2018–19 stays steady and all projects are wrapped up by 2025, total overhead climbs to $30 million.

There’s some uncertainty in the numbers. CPUC overhead might continue to rise and project oversight could drag on, but in some years investment income has more than covered administrative costs. Maybe all the 77 projects already approved for CASF funding will be completed, but that’s not the way to bet. Money allocated to cancelled projects and a small but steady stream of loan repayments could add to the total available for new infrastructure grants. On the other hand, it might not be a bad idea to leave a reserve for projects that overrun budgets through no fault of their own – for example, because of tougher utility pole attachment standards imposed by the CPUC itself.

With that caveat in mind, add up all the expenses, subtract them from the actual dollars the CPUC will collect for the CASF infrastructure program, and you end up with $145 million left to spend on broadband projects. Tune in tomorrow for a look at how those $533 million worth of grant proposals might be carved down to fit.

CASF Infrastructure Account as of 23 June 2020
Authorised – total$575,000,000
Infrastructure shortfall (est.)($117,654,165)
Infrastructure Account net of shortfall$457,345,835
Infrastructure awards as of 31 Dec 2019$271,333,358
Infrastructure grants awarded in 2020$10,825,350
Cumulative admin overhead as of 30 Jun 2019$16,732,595
Estimated admin overhead FY 2019–25$13,142,082
Total Infrastructure Account spent/encumbered$312,033,385
Funds remaining for new CASF infrastructure grants$145,312,450

The Central Coast Broadband Consortium (CCBC) supported Charter’s San Benito County proposal and assisted Etheric Networks with its application. The Connected Capital Area Broadband Consortium (CCABC) assisted DigitalPath. I assisted the CCBC and the CCABC, and also kibitzed on other projects. I also have opinions about what the CASF program should be (in case you haven’t noticed). I’m not a disinterested commentator. Take it for what it’s worth.