Tag Archives: ab82

AT&T not on FCC’s list of potential RDOF bidders, but 505 others are

by Steve Blum • , , , ,

Paicines pole route

AT&T is not on the list of 505 would-be rural broadband subsidy bidders released by the Federal Communications Commission on Tuesday. It’s also not listed as a member of any of the 38 consortia – bidding groups – and none of the other 467 contenders are obviously AT&T subsidiaries. None of the FCC registration numbers directly held by AT&T match up to any of the listed bidders either.

It’s difficult to prove a negative, but so far it appears that absence of evidence is also evidence of absence. AT&T does not appear to be interested in going after the $16 billion in ten year operating subsidies that the FCC will be awarding in the Rural Digital Opportunity Fund reverse auction next month.

The list is a bit of a tease. The FCC isn’t telling us which states these companies intend to bid in – California might or might not be in their dreams.

Other major California Internet service providers are also missing from the list, or have been tagged as having “incomplete” applications. Only one of California’s incumbent telcos filed complete paperwork the first time around. Consolidated Communications, which operates in a small area east of Sacramento, is ready to go. There were no other obviously Californian ISPs among the 121 organisations on the “complete” list.

Frontier is one of the 384 ISPs on the “incomplete” list, sailing under its bankruptcy-induced “debtor in possession” flag. So is Cox Communications, Altice (aka Suddenlink) and a couple of smaller cable operators, Horizon and Mediacom. But not Charter, despite signalling earlier this year that it would chase RDOF money, or Comcast, which comes as no surprise. Also in the incomplete category are Californian wireless Internet service providers and independent wireline ISPs.

The auction is scheduled to begin on 29 October 2020. Bidders that need to clean up their paperwork have until 6:00 p.m. eastern time on 23 September 2020 to do so. The FCC doesn’t seem likely to grant any extra time. At the same time that it published the lists, the FCC also published a sharply worded order denying five requests for extension of an earlier deadline. Pleas for waivers of eligibility or due diligence requirements usually get the same treatment.

The list will only get shorter as auction time nears.

CPUC adds California money to federal broadband subsidy bids. If

by Steve Blum • , , , ,

Cvin fiber marker sr49

Internet service providers might get California help to improve their chances at winning in the Federal Communications Commission’s Rural Digital Opportunity Fund (RDOF) auction. Broadband infrastructure subsidies from the California Advanced Services Fund (CASF) could be added to their bids, per yesterday’s decision by the California Public Utilities Commission.

If.

If commission staff opens a second window for CASF grant applications quickly enough. If those proposals leverage RDOF money. And, particularly, if there’s any money left in the fund.

The decision also tweaked rules for broadband facilities grants in public housing and allowed CASF money to be spent on technical assistance for tribes (but not for other primary jurisdictions, such as cities or counties).

CASF rules set an annual date for project proposals. Usually, it’s the first of April, but it was bumped to May this year because of the covid–19 emergency. The CPUC received 54 applications totalling $533 million in requests, which is twice the theoretical CASF funding limit and more than three times the money that’s actually available.

That prompted the head of the CPUC’s communications division to send out a warning to applicants that it would be in their best interest to go after RDOF money too. A bill attached to the state budget tweaked the law to allow CASF money to go to co-funded projects that meet RDOF eligibility standards, instead of the usual, and pathetic, 6 Mbps download/1 Mbps upload speed limit on project area eligibility.

Yesterday’s decision, written by commissioner Martha Guzman Aceves, gives staff discretion to allow a second round of applications that “incorporate federal broadband funding opportunities, such as RDOF”.

The objective is to help California get its fair share (or a bit more) of the $16 billion in RDOF money that the FCC will award by reverse auction in October. Adding CASF subsidies to project financial models will allow for more aggressive bidding, giving Californian Internet service providers a competitive edge over ISPs in other states.

The mechanics of how that is supposed to happen are still to be determined. There’s a standard six month timeline for reviewing and approving CASF grant proposals, so standard procedures won’t work for an auction that’s a little more than two months away. The big if – if CASF money is available – also has to be answered.

To do that, the 54 pending applications need to be trimmed – some or all rejected completely, or proposals and service areas adjusted to allow RDOF to backfill project budgets.

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.

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

by Steve Blum • , , , , ,

CASF funding status Part 3:

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.

CASF funding status Part 1: California’s broadband upgrade fund could lose $120 million, after senate committee caps subsidy bill

CASF funding status Part 2: California broadband subsidy fund dwindles to less than a third needed for pending projects

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.

Newsom, CPUC line up on (relatively) minor changes to California broadband subsidy program

by Steve Blum • , , , , ,

Paicines pole route

A second, perhaps competing, revision to California’s broadband infrastructure subsidy program is queued up for possible consideration at the state capitol. The California Public Utilities Commission is proposing changes to the law governing the California Advanced Services Fund (CASF), to make it easier to use it to attract federal broadband money to the state by supplementing the budgets of projects competing for federal grants.

The administration’s proposal is flying under the radar right now. It’s consistent with the vague reference to better competing for federal broadband dollars in governor Gavin Newsom’s budget revision last month. And it’s one of a couple hundred budget-related bills floated by the administration.

One change proposed by the draft is to allow CASF money to be combined with federal funds, such as the Rural Digital Opportunity Fund program (RDOF) due to launch in October, even in areas that have broadband service at or above the dismal 6 Mbps download/1 Mbps upload speeds that lobbyists for monopoly model telcos and cable companies, and their allies, convinced lawmakers to set as California’s broadband standard in 2017. The CASF threshold for co-funding federally subsidised broadband projects would be “broadband service at speeds consistent with the applicable federal speed standards”. For RDOF, that means any community that lacks service at 25 Mbps download/3 Mbps upload speeds.

As far as it goes, the proposed bill is very useful. But it falls short of the statutory overhaul and more ambitious broadband service upgrade already under consideration in the state senate.

The draft bill echoes senate bill 1130, which would also raise CASF’s minimum standard. It references the same 100 Mbps service level for subsidised infrastructure but, as with the recent amendments to SB 1130, it’s only a goal and not a requirement – the CPUC would be free to fund systems that deliver slower speeds. But it’s a weaker echo. Other SB 1130 provisions – a 25 Mbps down/25 Mbps up minimum eligibility standard and open access middle mile requires, for example – are missing.

The draft bill is among more than a hundred “trailer bills” collected by the state finance department from various state agencies for consideration by the legislature as it works through the state budget for the fiscal year that begins in July. Another trailer bill proposed by the CPUC would raise salaries for commissioners. So far, the drafts amount to little more than executive branch requests. Legislators will have to introduce them as formal bills and then vote on – and possibly amend – them.

Trailer bills have legitimate uses. The original purpose was to make statutory changes necessary to implement the budget. But trailer bills get little or no practical public review and take effect immediately. It’s a legislative loophole that California lawmakers are increasingly using to sidestep opposition to bills that have, shall we say, limited popularity (h/t to Scott Lay at Around the Capitol for the pointer). That popularity can be limited to lobbyists with bags of cash to hand out to biddable senators and assembly members.

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.