Tag Archives: broadband subsidy

Last surviving California broadband subsidy bill goes wobbly

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Broadband infrastructure subsidies are due for a vote on Wednesday at a California assembly committee hearing, but there’s no final text yet. What started out as four placeholder bills targeting the California Advanced Services Fund (CASF) – the state’s primary broadband subsidy program – has dwindled down to one, assembly bill 1665, carried by assemblyman Eduardo Garcia (D – Riverside County).

As of this morning, no updated bill language has been posted. Over the past few months, AB 1665 has been the subject of many meetings between legislators, telephone and cable company lobbyists, and other interests, notably the California Emerging Technology Fund (CETF), which has taken the lead on this bill.

This is the third year in a row that CASF has been on the table – or the chopping block, depending on your point of view – in Sacramento. In 2015 and 2016, cable and telco lobbyists killed proposals to raise California’s broadband speed standard and put more money into CASF.

Toward the end of last year, the tax on telephone bills that pays for CASF was scrapped, after the fund hit its $315 million limit. Of that, $270 million is set aside for broadband infrastructure construction grants. If Race Telecommunications’ $29 million fiber-to-the-home project in Phelan is approved next month, there will be something like $25 million to $30 million left.

Deal points circulated by CETF last week suggest that there’s some level of agreement to add a similar amount of infrastructure subsidy money to the kitty, but details about how it can be spent were lacking.

Frontier Communications and AT&T want their federally-subsidised rural territories, where they have an effective monopoly, protected from competition even though their promised upgrades will not meet California’s current minimum standard of 6 Mbps download and 1.5 Mbps upload speeds, let alone the federal advanced services standard of 25 Mbps down/3 Mbps up. And telco and cable lobbyists alike have pushed back against funding independent middle mile systems, like the recently approved Digital 299 project in northern California.

Incumbent telephone and cable companies have had an effective veto over CASF legislation for the past few years, and AB 1665 appears to be no different. If they are successful in forcing through language that gives them first call on hundreds of millions of tax dollars to pay for substandard infrastructure that they plan to build anyway, and blocks independent middle and last mile projects even when they refuse the money, the result will be worse than no bill at all.

Federal broadband funding guide is mostly old news

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A new booklet published by the National Telecommunications and Information Administration outlining ways to finance broadband projects contains no surprises. It’s a summary of federal programs that fund, or might fund, broadband infrastructure and it’s useful as a reference. But there’s no new money on the table, and many of the programs listed are either restricted in scope – Appalachia or tribal areas, for example – or are narrowly focused on specific users, such as libraries or public housing residents.

The list is also heavily weighted toward rural areas, which are served by federal programs that tend to ignore California. The best opportunities for urban infrastructure support comes from either the Economic Development Administration (EDA) or a few indirect money sources, such as the E-rate program for schools and libraries, which provide operating subsidies that might be spent with new service providers. As far as EDA is concerned, though, it’s good news that there’s a clear statement that broadband is moving up the priority list…

EDA’s mission is to lead the federal economic development agenda by promoting innovation and competitiveness, preparing American regions for growth and success in the worldwide economy. Given that broadband is an important ingredient in economic development strategies, EDA funding may be used to support broadband infrastructure projects under EDA’s Public Works and Economic Adjustment Assistance competitive grant programs, within certain parameters.

One troubling aspect is that the list of broadband-friendly federal programs in the booklet is shorter than the report published by the white house a couple of weeks ago. For example, it doesn’t list the agriculture department’s rural community facility program that was highlighted in that report and accounted for about a quarter of the $10 billion that the white house claimed was available for broadband infrastructure projects.

The booklet is a nice resource for beginners, but if you’re already actively involved in trying to develop broadband infrastructure, it’s not nearly as helpful as you probably want.

Broadband projects should compete for more federal money, report recommends

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Broadband gets a swing at it too.

There’s not a lot new in the recommendations released yesterday by the federal Broadband Opportunity Council, an interagency talking shop launched earlier this year as part of U.S. president Barack Obama’s community broadband initiative. But it is useful source for information about existing federal broadband programs and it at least gets some commitments, and even a few deadlines, down on paper.

The big question, of course, is where’s the money? No one is proposing to appropriate any new money for broadband, but at least there’s vague guidance to include broadband as something eligible for funding in existing programs…

Recommendation: All relevant Federal programs, especially those supporting economic development, infrastructure and housing programs, will use rulemakings or guidance to open financing resources for broadband investments.

According to the report, there’s $10 billion spread over 13 programs and/or agencies that can be tapped for broadband projects. That’s not the same thing as saying that there’s $10 billion newly available for broadband infrastructure construction, though. Plenty of uses for most of those grants and loans are eligible as well, and will compete with broadband projects for funding. And some of the money is already allocated for broadband development, as with the Rural Utilities Service’s programs, or available for broadband projects, such as Economic Development Administration grants.

But there’s the hope that more money will eventually flow towards broadband infrastructure. The federal agriculture department has a rural community facility development program, with $2.3 billion earmarked for the coming fiscal year. The report says that the department will “develop and promote new funding guidance making broadband projects eligible”. That won’t happen for another year, though, even if the report’s schedule is met. Similar promises are made for public housing, education, health and law enforcement programs.

For anything to happen, though, the federal agencies involved have to come up with new rules that make money available for broadband projects in a useful way. The report is very thin when it comes to specifics and timeframes are best looked at as aspirational rather than mandatory, leaving a lot of discretion to the agencies themselves. The clock could run down on the Obama administration before anything tangible happens. For now, it’s just watch and wait.

It’s a brand new game for California broadband subsidies

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Expect a different kind of give and take.

Until this week, if you wanted to apply for a grant to build broadband infrastructure in an unserved or poorly served area of California, you could do so with a reasonable expectation that there was enough money in the kitty to cover your request. Not anymore.

Everything changed on Monday when Inyo Networks and Race Telecommunications each filed grant proposals in the $50 million range. That meant that the total amount of pending grant applications is more than the available money in the California Advanced Services Fund (CASF).

When the California Public Utilities Commission opened the current round of CASF grant applications last December, there was about $160 million available to give out. Maybe a little more, maybe a little less, depending on how much money gets spent on mapping and administrative overhead. Since then, the commission has approved three projects – in Helendale, Wrightwood and Petrolia – bringing the grant account down to about $156 million.

Including the two applications submitted this week, there are 17 projects pending, totalling $173 million, $17 million more than what’s available. There’s also a loan fund, but that’s accounted for separately.

That means that the current grant list will be trimmed, and any new applications that are submitted – the window is still open – will have to be crafted with the increased competition for money in mind.

Two of the pending projects are holdovers from 2013, and one of those – ViaSat for $11 million – seems all but certain to be rejected. That still leaves a deficit of $6 million, with more projects in the pipeline. Whether those prospective applicants decide to move ahead anyway is yet to be determined, but either way, the competition for CASF broadband subsidies isn’t a friendly game of touch anymore. It’s full on tackle football.

Public housing gets broadband love from federal government

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Fresno and Los Angeles made the list of 27 cities and one tribal nation that will be getting federal help in extending broadband service to more public housing residents. The ConnectHome program was announced yesterday by U.S. president Barack Obama. The press release was a hodge podge of details, but it seems to boil down to…

  • Some of the communities – but not LA or Fresno – will get discounted, or even free, Internet access in public housing projects from ISPs, including Suddenlink, Cox, CenturyLink and Google Fiber. Sprint also signed up to provide wireless service.
  • Several companies and non-profits will be contributing consumer equipment and training.
  • The federal housing and urban development department (HUD) will start looking at requirements for broadband connectivity in subsidised residential construction projects. It would also allow cities to use certain grant money for broadband initiatives, although the program seems focused on planning and training rather than infrastructure development.

At the local level…

Mayors…have committed to reallocate local funds, leverage local programming, and use regulatory tools to support this initiative and the expansion of broadband access in low-income communities.

In other words, no new money but broadband does move up the priority list.

ConnectHome isn’t as utilitarian or well-funded as California’s broadband subsidy program for public housing. Paid for by the California Advanced Services Fund and managed by the California Public Utilities Commission, it set aside $20 million for Internet facilities in public housing and another $5 million to encourage residents to use it. So far, the CPUC has received applications that, if all were approved, would account for about half the available money.

For now, the new federal program is relatively small, but if it signals an institutional shift at HUD towards treating broadband as an essential utility, it could have significant benefits over the long term.

Constructive ideas (mostly) offered for Californian broadband subsidy plan

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Except for a couple of not so veiled threats of legal action, the comments submitted to the California Public Utilities Commission regarding a new plan to re-start the California Advanced Services Fund (CASF) program were generally positive, with few specific recommendations for changes. The nastiness came from the cable industry’s lobbyists in Sacramento – the California Cable and Telecommunications Association – and Verizon (more on that tomorrow).

Comments from other incumbent telephone companies – with the glaring exception of AT&T, which didn’t submit any – were more nuanced. A group of 13 small rural telephone companies filed a joint letter asking for some useful clarifications regarding current procedures – essentially checking to make sure nothing else was changing – and asking for more than the 6 months proposed to upgrade underserved areas, given that many of them serve mountain communities where precious little construction work can happen in the designated October to April timeframe. Frontier Communications, another primarily rural telco, also wants more time, if federal grants are involved.

Several regional broadband consortia weighed in. I’ve already written about the Central Coast Broadband Consortium’s submission, which was done jointly with Central Sierra Connect. Representatives from the Redwood Coast, the Connected Capitol and LA County consortia filed comments along the same lines, going into greater detail about key issues like affordability, accountability of incumbents and competing applicants alike and the status of tribal governments. Four other consortia – Inland Empire, Upstate, Eastern Sierra and Tahoe – asked to add more communities to the priority list included in the draft resolution.

The CPUC’s office of ratepayer advocates made several recommendations – not dissimilar to those submitted by consortia – that would make it harder for incumbents to “game the system” and prevent competitors from getting CASF subsidies.

Finally, Tom West, who is now the manager of the North Coast consortium but filed comments as an individual, took issue with the way the commission determines if a given area is eligible for CASF funding. That is indeed a serious issue, but it’s way outside the scope of the new draft rules that are on the table – it’s a separate problem.

Anyone can submit reply comments, but if you’re interested, do it fast – those are due on Monday.

Draft resolution proposing new CASF rules, 27 May 2014

Senate Bill 740, as signed by Governor Brown

Comments from…

Central Coast Broadband Consortia and Central Sierra Connect

California Cable & Telecommunications Association

California Center for Rural Policy/Redwood Coast RBC

CPUC Office of Ratepayer Advocates

Frontier Communications

Inland Empire Regional Broadband Consortium

Kern River Valley Revitalization/Eastern Sierra Connect RBC

Los Angeles County Regional Broadband Consortia

Rural telephone companies

Tahoe Basin Project

Tom West/North Bay/North Coast RBC

Upstate California Connect Consortium

Valley Vision/Connected Capital Area RBC

Verizon