SCE’s dark fiber future gets darker

by Steve Blum • , , ,

Southern California Edison’s bid to get blanket approval of its dark fiber deal with Verizon from the California Public Utilities Commission continues to sink deeper into a quagmire. The CPUC commissioner in charge of the review wants to change the way SCE splits dark fiber revenue with its customers. The formula in effect for almost 20 years gives 10% of gross revenue back to ratepayers, but commissioner Clifford Rechtschaffen thinks 50% is a better deal. SCE says that’s no deal at all, and intends to scrap the master contract it has with Verizon, in favor of doing fiber leases one at a time, under the old rules.

The Utility Reform Network (TURN), one of the outside organisations that “intervened” in the case, doesn’t like the idea of SCE simply canceling the review, calling it an attempt to “process shop”. It wants the commission to declare that SCE’s fiber business “has reached a level far greater than that envisioned for non-tariffed product or service, and on which the 90/10 shareholder/ratepayer revenue sharing is based”, as Rechtschaffen proposes.

There’s also the little problem of “intervenor compensation”. Under the system established by the California legislature and generously administered by the CPUC, TURN and other professional intervenors can bill SCE for the hours they spend opposing it. If the case doesn’t end in a decision, then it’s more difficult, if not impossible, for intervenors to collect.

Verizon has weighed in, too. It’s asking Rechtschaffen to change his mind and keep the details of its contract with SCE confidential, arguing that disclosure would have the exact opposite of its intended effect…

If the policy underpinning the conclusion to not provide confidential treatment to the Lease Route Orders and the redacted provisions of the MLA was to promote competitive access to Southern California Edison’s dark fiber, then that conclusion would have the opposite effect, as wireless carriers may decide that leasing from SCE would put at risk public disclosure of their competitively sensitive routes or other information and consequently refrain from leasing dark fiber from either SCE or other public utilities.

Electric utilities, like SCE and Pacific Gas and Electric, are a rare breed in the telecommunications world. They’re one of the few remaining sources of independent dark fiber in California. It’s time for the CPUC and TURN to recognise that the consumers whose interests they purport to defend need fast and affordable broadband service too. Killing what little competition remains in California’s highly concentrated broadband market is the wrong move.