Tag Archives: broadband

Big incumbents tell CPUC to tilt California broadband subsidies in their favor

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Four Internet service providers, all of whom have participated at one time or another in the California Advanced Services Fund (CASF) infrastructure subsidy program, offered their ideas on how that money should be managed and allocated. So did a lobbying front representing cable companies – including Charter Communications, Comcast and Cox Communications – which have never participated. The big boys – AT&T, Frontier Communications and the cable industry – want grants on their own terms, while blocking competitors that might threaten their monopoly business models.

AT&T offered a long list of suggestions to the California Public Utilities Commission. Some had merit, for example including latency as an evaluation criterion for project funding and measuring project reach by total housing units, whether occupied or not. Others were self serving. AT&T heartily endorsed the idea of limiting project proposals to once a year – great for a large, bureaucratic organisation like itself (or even a medium sized one like the CPUC) but hellish for nimble competitors. It also wants the CPUC to not do any ground truthing and simply rely on AT&T’s service claims. Given AT&T’s inaccurate reporting, that would hardly be a benefit to communities that AT&T doesn’t consider to be high potential.

Frontier Communications essentially told the commission that it should just give it as much money as it wants, on demand. After all, what’s a piggy bank for if you can’t whack it with a hammer any time you’re running short?

Geolinks wants the commission to give wireless infrastructure proposals the same weight as fiber projects, arguing nonsensically that they “will likely offer the same speeds”. It’s a wireless Internet service provider that hasn’t applied for CASF grants but did try unsuccessfully to jump in via the commission’s right of first refusal process.

Race Communications has received several CASF grants and understands the process well, including the endless opportunities for incumbents to game the system and delay, or even kill, competitive projects. It makes several useful recommendations to streamline the CASF program so that it doesn’t favor companies, such as AT&T and Frontier, that have all the lawyers and lobbyists they need to create mischief.

The California Cable and Telecommunications Association (CCTA), which speaks for Comcast, Charter and Cox, among other cable companies, wants to slow the grant approval process down, opposing expedited reviews. Its major members have refused to participate in the CASF program in the past, because of the regulatory danger they perceive. Grants for independent middle mile projects, which are largely banned now by state law because of its own lobbying efforts and those of AT&T and Frontier, also drew CCTA’s attention. It wants the CPUC to make sure none slip through any loopholes.

The full list of CASF-related comments are here. The CPUC will accept rebuttals, the deadline is 1 May 2018.

FCC pits one local technical expert against big telecom’s lobbyist horde

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Ajit Pai is trying to stop the bleeding on his Broadband Deployment Advisory Committee (BDAC). The Federal Communications Commission chairman appointed David Young to the committee, as a representative of the National League of Cities. Young is the fiber infrastructure and right of way manager for Lincoln, Nebraska’s public works department. It’s not explicitly stated, but the intent seems to be to fill at least one of the chairs left vacant by recent resignations by high profile municipal representatives. Pai is now dealing with accusations that the committee’s broadband policy work was hijacked by telephone and cable company lobbyists, as well as the recent arrest of a former BDAC chair on fraud charges.

It’s completely appropriate for the League of Cities to take a place on the committee. It’s a national lobbying front for municipalities, allowing cities to push their common interests in Washington, D.C. Since BDAC’s membership – official and unofficial – largely comprises lobbyists representing telecoms companies, it’s course-of-business for the League to take a set at the table, too.

I don’t know Young, but after taking a look at how Lincoln supports fiber build outs in the community, it seems apparent that he knows his stuff. And his stuff is boots on the ground management of city permit processes and utility easement issues. That’s important experience, and the FCC should listen to his advice.

But the resignations of San Jose mayor Sam Licardo and New York City chief technical officer Miguel Gamino – both because of the way the FCC is kowtowing to cable and telco lobbyists – left a bigger hole than Young can fill. He should have been on the committee with Licardo and Gamino from the beginning. The FCC should have given equal weight to the technical and policy expertise offered by municipal representatives, particularly when crafting model policies that state and local governments will be urged – or perhaps required – to follow.

That didn’t happen. So when BDAC meets later this month, it’ll be one new, fresh local face versus a platoon of entrenched beltway bandits working for big cable and telephone companies. That’s something to keep in mind when evaluating whatever comes out of it.

California broadband subsidy rules and $300 million on the table

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The main event is finally under way. By yesterday’s deadline, thirteen organisations filed comments regarding how the California Public Utilities Commission should spend $300 million in new California Advanced Services Fund (CASF) money (plus however much more is left in the kitty) on broadband infrastructure subsidies. I haven’t read through them all yet – if you’re interested, I’ve posted them all here – but a top line glance shows that service providers, including the big incumbents who expect to use CASF as a private piggy bank, have a lot to say.

So do regional broadband consortia, and organisations that usually jump in on broadband issues. Yesterday’s round of comments focused mostly on broadband infrastructure grant rules, including the new $5 million line extension program that cable companies lobbied for – they want to evade CPUC oversight by laundering grant money through homeowners.

I drafted and submitted the Central Coast Broadband Consortium’s comments (with much appreciated distribution help from Trish Steel at the Mendocino Broadband Alliance). Our one big recommendation is to base infrastructure grant amounts on the level of service that the subsidised infrastructure will provide…

The CCBC recommends that the Commission…add one further criterion for determining the level of funding: the service level that a proposed project is capable of delivering and that the applicant commits to offering and fulfilling for at least two years following project completion.

In the Connect America Fund II auction phase, the Federal Communications Commission (FCC) has established “technology-neutral service tiers” and other service level metrics that will determine project eligibility and, effectively, the level of funding…the weighting used by the FCC for the various speed tiers can be applied to funding level decisions made by the CPUC. The CCBC recommends setting a base funding level of 80% of project costs and applying the FCC’s weighting criteria…

We made a similar recommendation for the line extension program, with the addition of suggested cost sharing and oversight requirements for the ultimate beneficiaries – the Internet service providers, including cable companies, who will own the infrastructure and bill homeowners for the service it supports.

Comments were also due on proposed changes to the CASF-funded regional broadband consortia program. California lawmakers approved a long wish list submitted by AT&T, Frontier and cable companies such as Comcast and Charter Communications that use a front organisation to do most of their public lobbying (the real lobbying, involving millions of dollars in cash payments from telecoms companies to legislators, is done behind closed doors of course). One of the lesser items on that list was restrictions on what regional consortia can do with the CASF money they get. We urged the commission not to take a narrow view of what those restrictions mean.

I’ll more to say about all comments as the week goes on and I make my way through them. Rebuttal comments are due in a couple of weeks.

Federal ag department looks to co-ops to lead broadband development

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At least one member of the Trump administration isn’t trying to smack local broadband initiatives with a preemption sledgehammer. Agriculture secretary Sonny Perdue spoke to a gathering of representatives of rural electric cooperatives. Those are (usually) small electric systems that are organised as buyer cooperatives – electric customers are the owners. The federal agriculture department has been subsidising them for more than 80 years. Many of those co-ops have branched off into the broadband business, also with subsidies from the agriculture department’s Rural Utilities Service (RUS).

Perdue likes that idea. He said the expansion of broadband infrastructure and service is “rural electrification of the 21st century”…

We are at the beginning, I think, of a seismic shift in technology and when you think just the beginning, you said, well, the Internet’s been around for how many years? Well, only 15 or so. When you think about that – how quickly it comes upon us, how quickly we become dependent on these technological advances. The partnership between rural electric cooperatives and the federal, state and local communities, I believe, can be, must be revolutionary in the change. I think it will be literally transformative around our country as we participate with you, as you participate with local, state and federal authorities to make sure this happens, just like it happened beginning in 1936 with the [rural electrification] act. You got the potential to do the very same thing in the 21st century.

The big question on the table now is what will he do with the $600 million that congress set aside for new broadband grants and loans. Perdue said his department is working on it. He didn’t offer any details, although he encouraged rural cooperatives to offer ideas on how the money should be spent.

Looked at one way, Perdue’s speech is a genuine plus for independent broadband development in the U.S. His good words and encouragement for rural cooperatives are 100% in line with federal agriculture department policy and practice. Which is great if you live in the midwest or south, where rural cooperatives are thick on the ground – RUS broadband programs are custom tailored to serve them.

That’s not so good for California, or many western states, where the utility cooperative model didn’t take hold with the same enthusiasm. There are only three in California – in Riverside, Modoc and Plumas and Sierra counties – and as a result, RUS broadband money tends to go to other states. Perdue is right about the valuable role cooperatives play, where they exist, but he needs to expand his department’s thinking about how to get the same results where they don’t.

Streetlight gifts to mobile carriers spread to other states

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California is not the only state where lobbyists for mobile carriers and other big, incumbent cable and telephone companies are giving stacks of cash offering somber advice to state legislators and getting huge gifts of public property in return. According to a couple of articles by Timothy Clark in Route Fifty, several other states are preempting local ownership of vertical infrastructure and municipal control of public right of ways.

In some states, the giveaway is even more generous than the California’s gift to telecoms lobbyists last year, senate bill 649. It was vetoed by governor Jerry Brown, who eased the pain by reinforcing AT&T’s and Frontier Communications monopoly in rural California with $300 million and, effectively, an end to similar subsidies for independent broadband projects. SB 649 would have set a blanket $250 a year lease rate for wireless broadband providers to attach cell sites and other equipment to city owned street lights. Depending on how you figure it, that’s something like one-fourth to one-half of the market rate.

In Texas, lawmakers went one better and sliced off a zero, setting the maximum municipal pole lease rate at $20 a year. The City of McAllen, Texas sued, claiming that the preemption violated the Texas constitution. McAllen is no stranger to fighting for municipal broadband rights, by the way. It drafted a “minority report” protest to the Federal Communications Commission over the way that industry lobbyists hijacked the Broadband Deployment Advisory Committee, and convinced San Jose and New York City to sign on.

According to Clark’s story

“In our legal analysis,” [McAllen city attorney Kevin Pagan] said, “the law forces us to give gifts to private parties. It is forcing us to give access to our rights-of-way at far less than market value. What about other companies using the rights of way? They are paying higher rates, and why wouldn’t they say, ‘What about us?’”

The wireless telecom companies, he continued, “want access to the rights of way like public utilities, but they don’t want to be regulated like a public utility.” Pagan noted while the companies promote small-cell as cutting-edge wireless technology, the cells rely on a vast fiber cable network that comprises 90 percent of the system, largely strung on poles in the rights of way.

Georgia lawmakers also passed similar legislation, and a preemption bill is making its way through the Nebraska legislature.

Unless it’s AT&T or Verizon, telco capital investment is at life support levels

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As with subscriber numbers, there’s a big gap between the two biggest telcos in the U.S. – AT&T and Verizon – and the rest of the field when it comes to capital spending. Both companies are planning multi-billion dollar investments in their networks in 2018, according to a story by Sean Buckley in FierceTelecom, with AT&T planning to spend $25 billion on capital upgrades in 2018, while Verizon is looking at the $17 billion to $18 billion range.

That includes spending on their mobile networks as they move toward 5G upgrades. It’s a much different story for pure wireline plays.

Number three on the list – CenturyLink – barely hits a dime on the dollar versus AT&T, with $2.6 billion spent last year and a 2018 capital budget pegged at 16% of revenue, whatever that turns out to be. Its priority will be integrating newly acquired Level 3 Communications into its overall operations. According to the FierceTelecom story

“We have to keep driving profitable growth,” said Glen Post, CEO of CenturyLink during the fourth quarter earnings call. “Most of it will be success based. The allocation of capital [will] shift harder in making sure it’s for return profiles that are higher, take advantage of our on-net footprint, and are predictable whether it’s a cost reduction or driving profitable margin growth.”

Translation: regardless of what we said in order to get regulatory approval of the deal, we’re going to bundle Level 3’s long haul fiber assets into CenturyLink’s monopoly business model. Adios dark fiber.

Frontier is a distant fourth, with a 2018 capital budget of between $1 billion and $1.5 billion and a number one priority of “finding ways to reduce costs”. In other words, it’s going to spend money on its infrastructure only when it absolutely has to – replace burnt out poles in Santa Barbara County, maybe? – or to meet self liquidating commitments, such as those it made to get $2 billion in federal Connect America Fund subsidies. Given Frontier’s possible plans to exit California, that might well be the best it can do.

Oregon approves its own net neutrality revival

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Beginning next year, local and state government agencies in Oregon won’t be able to buy broadband service from providers that don’t abide by the network neutrality principles signed into law yesterday by Oregon governor Kate Brown. The ban includes wireline, fixed wireless and mobile carriers, and extends to service subsidised by public agencies, as well as direct purchases.

An Internet service provider will be on the blacklist if it…

  • Engages in paid prioritization;
  • Blocks lawful content, applications or services or non-harmful devices;
  • Impairs or degrades lawful Internet traffic for the purpose of discriminating against or favoring certain Internet content, applications or services or the use of non-harmful devices;
  • Unreasonably interferes with or unreasonably disadvantages an end user’s ability to select, access and use the broadband Internet access service or lawful Internet content, applications or services or devices of the end user’s choice; or
  • Unreasonably interferes with or unreasonably disadvantages an edge provider’s ability to make devices or lawful content, applications or services available to end users.

There are exceptions. The big one is that if a guilty ISP is the only option in a particular area, then public agencies can do business with it. Otherwise, the Oregon Public Utilities Commission can allow paid prioritisation or other banned activities if there is a particular public interest at stake – think, prioritising police or fire traffic. The OPUC is also the arbiter of what qualifies as reasonable network management practices.

Any broadband provider that crosses any of these redlines has to first quit doing it and then get the OPUC’s blessing before it can go back to selling service to public agencies.

Oregon’s bill is more modest than the one passed by the Washington legislature in February. It only applies to state and local government contracts. On the other hand, it’s likelier to withstand the court challenges promised by lobbyists for the big incumbents.

Two similar net neutrality revival bills are up for consideration in the California legislature. Senate bill 460 is on ice in the assembly, perhaps waiting for senate bill 822 to make its way over from the senate side. It’s scheduled for a committee vote next week.

AT&T, Frontier, Comcast, Charter want benefit of California’s broadband promotion grants, but not responsibilities

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In the spirit of no taxpayer dollars left behind, big cable and telephone companies want to help spend grants awarded by the California Public Utilities Commission to groups promoting Internet use and subscriptions, but they don’t want to have do anything in return. Cable companies and AT&T filed rebuttals last week to recommendations made by a variety of broadband and consumer advocacy groups about how a “broadband adoption” grant program, newly funded by a tax on telephone bills, should be structured. Frontier Communications offered similarly self-serving comments last month.

Comcast’s, Charter Communications’ and Cox Communications’ lobbying front – the California Cable and Telecommunications Association (CCTA) – wants to leverage adoption grants, but doesn’t want to accept any responsibility that might go along the money, or cooperate with groups that get it. It endorsed the California Emerging Technology Fund’s (CETF) recommendation that organisations should be able to receive grants in partnership with incumbents. That’s not surprising, since Charter is paying millions of dollars a year to and through CETF for adoption – aka subscriber acquisition – campaigns. But CCTA doesn’t think its members should have to provide any information about results, even though it forcefully argues that grant recipients should be held accountable for those results, nor does it favor requirements that Comcast and Charter better advertise the low income discounts they, in theory if not always in practice, offer.

AT&T faithfully echoed CCTA’s comments. It’s tempting to think they coordinated their responses, but the monopoly business models of telcos and cable companies are so closely aligned that it would be remarkable if they didn’t agree. Like the cable companies, AT&T doesn’t want to disclose the number or location of their subscribers or share any customer information. But, also like the cable companies, it wants to take advantage of any subscriber acquisition benefits that might flow from the CPUC’s adoption grant program, particularly any opportunities to push its marketing message. “We clearly share the goal of maximising knowledge, and adoption, of our plans”, AT&T’s filing said.

Assuming the CPUC follows its published timeline, draft rules for the broadband adoption grant program will be posted in May 2017, with a final decision coming in June.

Phase 1 Reply Comments – filed 2 April 2018

AT&T
California Cable and Telecommunications Association
California Emerging Technology Fund
North Bay North Coast Broadband Consortium
Office of Ratepayer Advocates
The Utility Reform Network and the Greenlining Institute

Click here to see California Public Utilities Commission documents, public comments and reply comments, and other information regarding the 2017-2018 overhaul of California Advanced Services Fund programs.

Should California broadband subsidies backfill big telco, cable marketing budgets?

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When lobbyists for telephone and cable companies convinced biddable lawmakers to turn California’s taxpayer-funded broadband subsidy program – the California Advanced Services Fund (CASF) – into their own private, $300 million piggy bank last year, some smaller programs were included. Assembly bill 1665 created a $20 million “broadband adoption” kitty that’s supposed to go toward increasing the number of people who use the Internet. The California Public Utilities Commission is writing new rules to guide how that money is spent, and many organisations, incumbents and non-profit corporations included, have offered recommendations for doing so.

In the latest round of comments, two consumer advocacy groups, the Utility Reform Network (TURN) and Greenlining, hit back at the suggestion that broadband adoption programs – digital literacy classes, broadband access efforts such as computer centers and equipment giveaways, and other marketing initiatives – should, or at least could be, used to fund “partnerships between grantees and incumbent Internet Service Providers”. The money would, in effect, supplement incumbents’ marketing budgets. That recommendation was made by the California Emerging Technology Fund, which is a non-profit organisation largely funded these days via adoption programs paid for by Charter Communications and Frontier Communications.

The two groups pointed out that incumbents – a gang that includes Charter, Frontier, AT&T and Comcast – have reduced-rate broadband programs for low income households. They’re required to offer those rates as a condition imposed on them by regulators when they bought up other companies…

Those merger requirements have end dates and it is unclear whether any of those incumbent providers will continue to provide a low-income broadband service option after the merger requirements expire.

It is also critical that applicants do not use the CASF grant money to advantage a particular carrier. While partnerships should be allowed and can have value, they cannot be designed to provide an exclusive channel for the carrier-partner to otherwise upsell services, provide unsatisfactory services, or provide broadband with short-term discounts that may expire.

Applications that propose partnerships should be closely reviewed and the Commission should allow “well-meaning and laudable” start-ups and smaller broadband providers, who have identified a need to close the digital divide in their communities and want to take action to help their communities, to apply for CASF funds.

Just so.

Assuming the CPUC stays on schedule, the requirements for the new broadband adoption grant program should be finalised by the end of June 2017.

Phase 1 Reply Comments – filed 2 April 2018

AT&T
California Cable and Telecommunications Association
California Emerging Technology Fund
North Bay North Coast Broadband Consortium
Office of Ratepayer Advocates
The Utility Reform Network and the Greenlining Institute

Click here to see California Public Utilities Commission documents, public comments and reply comments, and other information regarding the 2017-2018 overhaul of California Advanced Services Fund programs.

Differing views offered on how California should measure broadband success

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The back-and-forth continues over how California’s broadband subsidy programs – grouped under the California Advanced Services Fund (CASF) – should be redesigned. Earlier this week, six organisations filed rebuttals to the initial round of comments made last month.

Much of the debate is over how results should be measured and to what degree the organisations that get CASF money should be held accountable for those results. It’s a complicated problem. The answer will largely depend on whether the California Public Utilities Commission reckons “broadband adoption” to be a goal defined by marketing principles – which is where the term comes from and where success is measured by the number of new subscribers – or simply an educational activity.

The CPUC’s office of ratepayer advocates was among those doing some rhetorical counter-punching this week, but one jab went wild. They misread the Central Coast Broadband Consortium’s (CCBC) comment regarding minimum speed levels, and mistakenly thought it applied to adoption programs. It doesn’t.

(Full disclosure: I drafted and submitted those comments).

Instead, the CCBC’s recommendation is to set a minimum speed for broadband facilities that are installed in public housing communities and paid for by CASF grants, which is a separate program. Under the current rules, CASF-funded broadband systems installed in public housing only have to deliver 1 Mbps download speeds, with no upload requirement. We argued that people who live in public housing deserve the same consideration from CASF as anyone else, and funded facilities should at least meet the pitiful 10 Mbps down/1 Mbps construction standard required elsewhere (the eligibility minimum – 6 Mbps down/1 Mbps up – is even worse). Ideally, there should be incentives for projects to meet the standard set by the federal agriculture department and the Federal Communications Commission – 25 Mbps down/3 Mbps up – or better.

So far, the CPUC has asked for recommendations and rebuttals regarding the CASF public housing and adoption programs (and the shut down of the infrastructure loan account). Comments on the big money program – the $300 million infrastructure grant account – are due later this month.

Phase 1 Reply Comments – filed 2 April 2018

AT&T
California Cable and Telecommunications Association
California Emerging Technology Fund
North Bay North Coast Broadband Consortium
Office of Ratepayer Advocates
The Utility Reform Network and the Greenlining Institute

Click here to see California Public Utilities Commission documents, public comments and reply comments, and other information regarding the 2017-2018 overhaul of California Advanced Services Fund programs.