PG&E must put all its fiber on the market, not just the bits it, or others, want sold

by Steve Blum • , , , ,

PG&E agrees with many of the restrictions that the California Public Utilities Commission’s office of ratepayer advocates (ORA) wants to put on its proposed telecommunications business plan. Without knowing the details of PG&E’s 2,600 mile fiber network in northern California, it’s impossible to know whether that climb down is a strategic retreat or a concession rendered meaningless by the simple facts of its infrastructure or business plan.

The CPUC is reviewing PG&E’s application for certification as a telephone company. Over the years, PG&E has built up an inventory of fiber optic assets, either because it had internal communication needs or because another telecoms company swapped fiber strands for access to PG&E’s electricity transmission and distribution infrastructure. It wants permission to put those assets on the market, either as simple dark fiber or the medium for lit transportation services.

ORA wants to ban PG&E from “using fiber lines installed in the power zone” of utility poles for its dark fiber and lit service business. The power zone is the uppermost area of poles, where wires used for electric service are installed. The area below it, where cable and telephone companies attach their wires, is the communications zone. But that’s only on poles used for distribution of electricity – low voltage, last mile service in telecoms terms. Poles used for transmission of electricity – middle mile, in other words – don’t have a communications zone. Any fiber installed on transmission infrastructure is, by definition, in the power zone.

The conditions proposed by ORA are in the context of utility poles used “for network distribution”. If what ORA wants and what PG&E is agreeing to only involves fiber installed on poles used for distribution, and not on transmission poles, or conduit of any kind, then it might be no big deal. PG&E might not have a significant amount of fiber in the power zone of local distribution poles. That’s an expensive proposition, compared to installing fiber in the communications zone, where safety concerns are fewer and construction costs are less. So it might not make a difference either to PG&E’s business plan or to its ability to be a competitive counterweight to telecoms incumbents with monopoly business models.

But if those conditions affect more than a trivial amount of last mile fiber, or in any way restrict PG&E’s ability (or willingness) to sell access to middle mile routes on its vast transmission infrastructure – the crown jewel of its network – then the CPUC should reject them. Instead, the CPUC should treat PG&E as the incumbent it is: all of its fiber should go on the market. Otherwise, allowing it to act as a telecoms company will not “enhance competition in the public interest”, as PG&E claims.

PG&E rebuttal testimony regarding its CPCN application, 8 December 2017