Tag Archives: casf

Cable to defend Californian monopolies with attacks on independent projects

by Steve Blum • , , , ,

Comcast, Charter Communications and other cable companies are demanding the right “to challenge each and every application” for broadband infrastructure subsidies from the California Advanced Services Fund (CASF). Their lobbying front organisation, the California Cable and Telecommunications Association (CCTA), made their perpetual litigation plans clear in a new round of comments on the California Public Utilities Commission’s plan to reboot the program.

The cable companies also want to be able to block independent projects by cherrypicking homes and neighborhoods census blocks using the right of the first night right of first refusal given to them by the lawmakers they’ve generously funded in return. CCTA called universal service requirements advocated by other organisations “especially unreasonable”.

Like the cable lobbyists, AT&T repeated many of it previous arguments in its comments. But it did make one statement about funding middle mile facilities that is both true and useful for developing economically viable broadband projects…

If a CASF applicant and middle-mile provider cannot agree on access rates, terms, and conditions through arm’s-length negotiation, that alone is evidence that the middle-mile provider’s proposed rates, terms, and conditions are not commercially acceptable for the project at issue, and that building middle-mile infrastructure is “indispensable” to the project.

Middle mile infrastructure that connects local, last mile networks to central Internet hubs, such as those found in Silicon Valley, is essential. Incumbents – AT&T included – have used their control over those choke points to keep broadband prices high and competitors out. The CPUC should subsidise more middle mile fiber construction whenever possible, but that money should come with the same strings attached to last mile projects: grant recipients should offer it on the open market at published rates.

Several other groups submitted comments, also mostly restating earlier positions. The North Bay North Coast Broadband Consortium weighed in for the first time, urging the commission to hold incumbents accountable when they exercise a right of first refusal but don’t build out, and to give priority to projects that offer faster broadband speeds than the pathetic 10 Mbps download/1 Mbps upload service that the California legislature agreed to subsidise.

North Bay North Coast Broadband Consortium
CPUC Public Advocates Office (formerly known as the office of ratepayer advocates)
Greenlining Institute
TURN

AT&T
California Cable and Telecommunications Association (lobbyists for Comcast, Charter and other cable companies)
California Emerging Technology Fund
Geolinks
Race Telecommunications
Small Local Exchange Carriers (small, rural telcos)

Links to other documents – decisions on other issues, drafts, comments and more – are here.

Comcast and Charter fight for right to charge “exorbitant prices” for broadband connectivity

by Steve Blum • , , , ,

Comcast’s and Charter Communications’ lobbying front in Sacramento – the California Cable and Telecommunications Association (CCTA) – doesn’t want the California Public Utilities Commission to require companies that receive broadband infrastructure subsidies to make any commitments about the prices consumers will be charged, or to offer an “affordable broadband plan for low income customers”.

In comments they submitted regarding the CPUC’s proposed reboot of the California Advanced Services Fund (CASF) broadband infrastructure subsidy program, the cable lobbyists claimed that the requirements – some of which have been in place for many years – are illegal.

The lobbyists also told the CPUC that it can’t limit Charter’s and Comcast’s right to charge “exorbitant prices” for middle mile connectivity and, in the process, block competition by independent broadband providers.

CCTA objected to a new rule that would allow streamlined review of middle mile proposals in “a situation where a provider…only offers service at exorbitant prices”. Their claim is that “affordability” has nothing to do with the “availability” of middle mile service.

Bullshit.

Middle mile service links a local broadband provider – aka the “last mile” – to a major hub, such as a data center in Silicon Valley, where interconnections between networks are thick and the magic of the Internet happens. If an independent Internet service provider wants to build a last mile network in a poorly served community, the middle mile connectivity problem has to be solved in way that makes economic sense. When incumbents, like Charter, Comcast, AT&T or Frontier, kill an independent’s business model by jacking up middle mile prices – as they are allowed to do – they are deliberately making that service unavailable.

CCTA also continued to argue for the right to perpetually and continually challenge proposed projects. Derailing project applications with late challenges, sometimes based on false claims, is a tried and true tactic that incumbents use to protect their monopolies in communities where 1. their service is poor, and 2. so are residents.

The cable companies have never liked the CASF infrastructure subsidy program, and they have handed bags of cash offered cerebral arguments against it to California’s lawmakers in largely successful attempts to cripple it.

CCTA’s comments are worth reading as a reminder of why the CASF program was created in the first place.

Links to CASF reboot documents – decisions on other issues, drafts, comments and more – are here.

I drafted and submitted the comments filed by the Central Coast Broadband Consortium. I am not a disinterested commentator. Take it for what it’s worth.

Telcos, cable companies should face consequences for filing false California broadband data

by Steve Blum • , , , ,

AT&T, Frontier Communications, Charter Communications and Comcast have to file reports with the Federal Communications Commission detailing where they offer broadband service, how fast it is and what technology they use. The California Public Utilities Commission uses that information, along with other sources of data, to determine if particular areas or communities are eligible for broadband infrastructure subsidies, via the California Advanced Services Fund (CASF) program.

The CPUC is rewriting the rules for those subsidies, as a result of the generosity of California lawmakers who rigged CASF so that big, monopoly model telecoms companies get a shot at hogging all the cash.

The availability data that those incumbents provide is of dubious quality. It’s largely based on marketing claims, and not on actual speed tests or subscriber information. The CPUC’s proposed new rules highlight comments that I drafted and filed in May on behalf of the Central Coast Broadband Consortium in which we called out, as an example, obviously false data that AT&T submitted about fiber to the home service.

The CPUC draft diplomatically attributes AT&T’s false reports to “miscoding”. We filed comments last week suggesting that this isn’t the time to be speculating on AT&T’s motives or possible excuses for giving the CPUC and the FCC bad information…

We did not attribute this false data to miscoding. AT&T has established “AT&T Fiber” as an “umbrella brand” which includes technology such as “the former AT&T GigaPower network” which does not, in all regards, meet the Form 477 definition of “fiber to the home or business end user”. It is reasonable to posit a connection between AT&T’s brand positioning and its Form 477 submissions.

In its comments, Race Communications, which has received several CASF grants to build FTTH systems in rural communities, urged the CPUC to hold companies accountable for their data…

The [proposed decision] properly notes that these errors have major consequences for the CASF program, because corrections are time-consuming for the Communications Division Staff, and errors cause confusion and frustration for communities and CASF applicants who must rely on the maps for eligibility decisions. Race contends that the Commission should take a more aggressive enforcement stance if data is consistently provided to the Commission that is erroneous and/or overstated by a particular existing provider. Providing erroneous data on coverage is a [CPUC rule] violation and should be treated as such.

The rule in question says that AT&T – and everyone else who does business with the CPUC – must agree “never to mislead the Commission or its staff by an artifice or false statement of fact or law”.

Just so.

Links to CASF reboot documents – decisions on other issues, drafts, comments and more – are here.

AT&T, Frontier tell CPUC to loosen broadband subsidy rules for them, but make it harder for everyone else

by Steve Blum • , , , ,

The arm wrestling over how California should manage its primary broadband infrastructure subsidy program – the California Advanced Services Fund (CASF) – is nearly complete. Ten organisations filed comments on a draft of new rules offered by commissioner Martha Guzman Aceves last month. The rewrite is necessary because the California legislature changed the way CASF is structured, giving incumbent telcos – particularly AT&T and Frontier Communications – privileged access to the money and another layer of protection from independent providers that propose to offer modern levels of broadband service to rural communities. Not surprisingly, AT&T and Frontier want the CPUC to make it easier for them to scoop up taxpayer money and harder for everyone else.

AT&T urges the commission to loosen the draft rules so it can get 100% subsidies for infrastructure wherever it wants – the CPUC’s draft would target low income communities and areas with nothing but dial-up service for full funding. The company also claims that it’s illegal for the commission to consider whether there are any existing subscribers in an area before deciding that it’s eligible for subsidies. A provider’s claim that it offers broadband service at particular speeds should be enough, AT&T argues.

Frontier added an amen to those prayers, saying in its comments that it “opposes setting specific criteria linked to funding levels” and that the commission should take its word for what service it offers.

Both companies also object to a requirement that they update the CPUC on the progress they’re making on federally subsidised broadband upgrades. The state law that they paid key lawmakers big bucks for convinced public-spirited legislators to pass gives them an exclusive right to Californian subsidies in those areas for a couple of years, if they actually do the promised work. How dare the CPUC ask them if they’re meeting those obligations?

A coalition of rural telephone companies – small, often locally owned incumbent providers that serve remote communities – echoed some of those comments. They, too, object to the use of actual subscriber data to validate marketing claims and to the requirement for a reduced cost plan for low income households.

The lobbying front organisation that pushes Comcast’s and Charter Communications’ agenda at the CPUC as well as at the state capitol also filed comments – I’ll have more to say about that on Monday.

There’s one more round of reply comments due next week, then commissioners will vote on the final draft. That could happen in a couple of weeks, at their next meeting on 13 December 2018.

Central Coast Broadband Consortium
CPUC Public Advocates Office (formerly known as the office of ratepayer advocates)
TURN and Greenlining Institute joint comments
AT&T
California Cable and Telecommunications Association (lobbyists for Comcast, Charter and other cable companies)
California Emerging Technology Fund
Frontier Communications
Geolinks
Race Telecommunications
Small Local Exchange Carriers (small, rural telcos)

Links to other documents – decisions on other issues, drafts, comments and more – are here.

I drafted and submitted the comments filed by the Central Coast Broadband Consortium. I am not a disinterested commentator. Take it for what it’s worth.

California broadband subsidy reboot draft posted, and it’s mostly good

by Steve Blum • , , , ,

The long awaited revisions to the California Advanced Service Fund’s (CASF) infrastructure grant program are finally on the table, more than a year after it was signed into law by governor Jerry Brown. A draft of the new rules was published late Friday afternoon, with the goal of putting it to a vote of the California Public Utilities Commission next month. There’s a lot of good news in the draft, but also some bad news. Some of the bad is unavoidable. The California legislature voted to turn CASF into a taxpayer-funded piggybank for AT&T and Frontier Communications. Friday’s draft, issued by Martha Guzman Aceves, the commissioner assigned to the rewrite, plays the poor hand dealt by lawmakers reasonably well.

One bit of bad news could have been avoided. If the draft is approved, the CPUC will only accept applications for CASF infrastructure grants once a year, in April. That’s a victory for big, monopoly model cable and telephone companies over sound broadband development policy. Independent projects, proposed by competitive broadband providers and backed by local communities, don’t run on a timetable. Corporate planning departments and capital budgets can and do. It’s convenient for AT&T and Frontier to spend a year drawing up a wish list and submitting it all at once. Not so for a one off project designed to fill a gap in a community that isn’t affluent enough generate a sufficient return on investment for those incumbents, with or without a subsidy.

On the plus side, the proposed changes to the program offer hope for local projects – if you don’t bet you can’t win – that can slow dance to the CPUC’s beat:

  • The review and approval process would be streamlined. Projects requesting a grant of $5 million or less, and that meet other cost and regulatory criteria could be approved by staff, instead of having to go to a formal vote by commissioners.
  • A seemingly hard three week deadline is set for incumbents that try to block competitors by claiming they already provide service that meets the California legislature’s pitiful minimum 6 Mbps download and 1 Mbps upload speeds. In the past, the CPUC has allowed incumbents to disrupt application reviews through perpetual challenges – Frontier is a particular abuser of the process – leading to delays of more than two years and, in some cases, killing projects altogether.
  • Challengers will also have to submit hard, complete information about current service upfront, including information about actual customers who subscribe to it. But only one qualifying sub per census block could be enough to kill an infrastructure upgrade for everyone else.
  • Projects “in low income areas” or where the only terrestrial option is dial up service can be fully funded; projects elsewhere that meet certain criteria can get up to 80%.
  • Projects can include middle mile facilities if the applicant demonstrates “it requested specific data and/or transport services from a provider and that provider was not able to meet that request and offered no other alternative”. There’s good and bad in this particular language. It opens the door to meaningful middle mile upgrades, which are indispensable to broadband development. On the other hand, it calls out transport and data services – Layers 2 and 3+, in geek speak – but ignores dark fiber, i.e. Layer 1, which is the true choke point that monopoly model telcos like AT&T, Frontier and CenturyLink use to block competition.
  • Rules for the so-called right of first refusal – Jus Primae Noctis is a better description – have been tightened. It’s a legislative present to incumbents which allows them to block projects in an area by promising to upgrade service.
  • AT&T and Frontier will have to disclose plans for building out in federally subsidised areas, if they want to keep the gift of exclusivity lawmakers gave them after cashing their generous checks out of a profound commitment to public service.
  • Formal requirements would be established for 1. latency (max of 100 milliseconds), 2. monthly data caps (at least 190 gigabytes) and 3. an “affordable broadband plan for low-income customers”.

Technical changes to the current rules are also proposed. A few requirements have been streamlined, others tightened up.

One can was kicked down the road. The “line extension” program approved by lawmakers, which was first proposed by Comcast as a way of laundering subsidies through customers in order to escape CPUC oversight, will be left to “a future commission decision”. Lawmakers set aside $5 million for grants to residents to pay for extending service to their homes.

The draft was released in time for a vote by commissioners at their final meeting of the year, on 13 December 2018. A delay until next year is possible, though.

Proposed decision of commissioner Guzman Aceves, implementing the California Advanced Services Fund infrastructure account revised rules, 9 November 2018

Links to other documents – decisions on other issues, drafts, comments and more – are here.

Frontier’s Colusa DSL subsidy request breaks rules, which is OK if everyone can play

by Steve Blum • , , , ,

Frontier Communications wants $253,000 from the California Advanced Services Fund (CASF) to upgrade its copper DSL facilities in the town of Colusa, in rural Colusa County. Its existing service in and around the community relies on a mix of 1990s vintage DSL and more advanced ADSL2 and VDSL technology. It’s proposing to upgrade its central office to extend its VDSL capabilities, and run fiber to the county fairgrounds in town.

The justification for the project, as described in the public summary Frontier distributed, is 45 homes that either don’t have any broadband access at all, or the service they have delivers less than 6 Mbps download or 1 Mbps upload speeds. Which is in line with the changes incumbents lobbied for last year, when the California legislature effectively turned CASF into a piggy bank for Frontier and AT&T.

What isn’t in line with past practice, or the legislation, is Frontier’s plan to use the subsidised upgrade to improve service for 2,300 homes that do have access to that pitifully slow standard of service. Or to build what is, by some definitions, a non-essential middle mile fiber line to the fairgrounds.

All that may be a good thing, and if Frontier’s rationale – which isn’t explained in the public document – is accepted by the California Public Utilities Commission then other important projects in underserved communities might be able to move forward as well.

But Frontier’s motive is not likely to be so noble minded. It has a history of viciously contesting CASF projects proposed by independent Internet service providers in similar circumstances. Frontier’s past challenges – sometimes based on false information – have forced independent applicants to trim their grant requests on a pro-rata basis to prevent subsidisation of “served” homes, or to withdraw their proposals completely. A more plausible interpretation is that Frontier thinks it can get away with scooping up as much taxpayer money as it wants.

The CPUC is in the process of rewriting the rules for the CASF infrastructure subsidy program, and Frontier’s Colusa project might or might not fit within it. I hope the CPUC clearly states that it does. Upgrading decaying rural DSL service is worthy, even if the company involved is, in effect, overbuilding itself.

Allowing upgraded – or newly built – infrastructure to serve the dual purpose of boosting service for “served” as well as “unserved” homes would make it easier for independent competitors to develop projects that do more than offer the marginal technical improvements Frontier is proposing. Which would be a genuine step forward for rural California.

Peterman steps down from the CPUC

by Steve Blum • ,

The California Public Utilities Commission will have at least one new member next year. At yesterday’s meeting, commissioner Carla Peterman announced she will not be back…

The end of the year marks the end of my term on the CPUC. I wanted to share that I’m not seeking reappointment. This has been – is – an amazing job. It’s been a true privilege to serve as a public utilities commissioner. I will say many nice things about all of you in a future meeting, but I wanted to let you know and to say that me and my team are going to working incredibly hard with all of you to bring forward the decisions for commission to consider by the end of the year. So I appreciate your support in that.

Just so you don’t have to ask, no I do not know what I’m doing next year. It’s fair to say it’s not retirement, especially coming off eight years of government salary. But regardless of what it’ll be, I’m sure we’ll have an opportunity to work together because I am truly committed to the mission of this agency and continuing to collaborate with all of you in the days to come. So thank you.

Governor Jerry Brown appointed Peterman to the CPUC at the end of 2012, and she began her six year term in January 2013.

The big question now is who will appoint her replacement. Brown’s term ends this year, and he could still nominate someone. Or he could leave it to his successor. Based on every poll I’ve seen, that’s almost certainly going to be fellow democrat Gavin Newsom. Anything is possible, but it would take an unprecedented political earthquake for republican John Cox to win.

The change of administrations will be interesting to watch. My guess is that Brown will defer many – probably most – decisions to Newsom, but will also find comfortable landing spots for close aides. Which he has done in his last three CPUC appointments: president Michael Picker and commissioner Clifford Rechtschaffen are both long time friends, and commissioner Martha Guzman Aceves was a key staffer in his office.

California broadband promotion, access grant program oversubscribed

by Steve Blum • , , , ,

Thirty three organisations – non-profits, and local government and educational agencies – asked the California Public Utilities Commission for a total of $8.4 million to pay for broadband education and access efforts – broadband adoption programs, as the California legislature labels it. A $20 million broadband adoption kitty was established by assembly bill 1665 last year, to ease the political pain of turning the California Advanced Services Fund (CASF) into a $300 million gift to AT&T and Frontier Communications.

The initial application window closed at the end of August, with $5 million available in the first round, and a $100,000 limit on each grant. Several organisations filed applications for multiple projects and/or locations, with two – Fresno State University and the United Way – asking for a total of $1.4 million each. There’s a ranking system for applications which will presumably be used to figure out who gets funded and for how much.

This week, the CPUC sent out a notice that the broadband adoption account previously run as part of the CASF public housing program was out of money, so future grant proposals would have to be directed at the new, all-comers program.

The CPUC is also updating its regional broadband consortia program, and is scheduled to vote on the new rules next week. AB 1665 restricted consortia activities to supporting infrastructure grant applications. Several regional consortia have been focused on broadband promotion and digital literacy training, and will now have to rely on the broadband adoption account to continue those activities. At least one – the Youth Policy Institute, which is a part of the Los Angeles County super-consortium – applied for adoption money.

So there will be a lot of hands reaching for the $15 million that’ll be left in the CASF broadband adoption account. The deadline for submitting applications for the next round of broadband adoption grant funding is the beginning of next year.

Move fast and build things, like broadband infrastructure

by Steve Blum • , , , ,

The debate over California’s primary broadband infrastructure subsidy program continues. Another round of comments landed at the California Public Utilities Commission Friday, with ideas – some good, some not – for changing the way the California Advanced Services Fund (CASF) is run.

I drafted and submitted the Central Coast Broadband Consortium’s (CCBC) contribution. There are many administrative, practical and, yes, political details to be worked out. Which is a large part of the problem with the program: the grant application and review process is complicated, time consuming and capricious. Improving it requires fewer details, more predictability and rapid decision making.

Time is the most precious commodity…

The CCBC has developed and assisted in the development of CASF-funded projects since 2009. It is an increasingly difficult challenge to recruit qualified infrastructure grant applicants. The delays, uncertainty and litigation involved in the review and approval process are the primary reasons qualified companies refuse to participate. Subsidy levels can be a consideration too, but other funds can often be identified to backfill project budgets when CASF eligibility is assured and schedules are short.

Money can be made. Time cannot.

The more complicated the process is and the more opportunities for incumbents to game the system, either by exploiting an overly intricate scoring system or by endless litigation of independent proposals, the less the likelihood is of meaningful service and infrastructure upgrades in deserving communities.

Since the California legislature voted to turn CASF into a piggy bank for big incumbents last year, the pipeline of independent broadband projects has run dry. Naturally, it has not stopped Frontier Communications from gaming the system to maximise the taxpayer dollars it rakes in, while minimising its service obligations.

In theory, the draft overhaul of the program should be complete by the end of the year, although it might take a month or two (or three…) for CPUC commissioners to come to a decision. In the meantime, the debate continues.

You can download Friday’s filings, and all (I think) the other documents from the CASF reboot here

Protect our monopolies, telcos, cable tell CPUC

by Steve Blum • , , , ,

AT&T doesn’t want to be bothered with any performance requirements or public disclosures. It just wants the California Public Utilities Commission to write it a monthly check, drawn on the California Advanced Services Fund (CASF). Boiled down, that’s its idea for rebooting CASF, following its success at convincing California lawmakers to turn the program into its own private piggy bank.

In that respect, AT&T is being consistent. But there is one, big whopper in the recommendations it submitted last month: AT&T claims the “communications environment” is “hypercompetitive”.

Nonsense.

California’s broadband market is concentrated in the hands of just a few players. Places where there are more than two wireline providers are rare. When broadband subsidies are on the table, that duopoly turns into a monopoly. Both California and federal infrastructure subsidies are effectively limited to communities bypassed by cable companies. In its service territory, AT&T will only get taxpayer money where it’s the only game in town.

That’s not hypercompetitive. That’s not competitive. That’s a monopoly.

Frontier Communications, Comcast and Charter Communications also want to fence off service areas where their service is substandard or nonexistent. Frontier and the California Cable and Telecommunications Association – Comcast’s and Charter’s joint lobbying front organisation – are both urging the CPUC to allow them to challenge proposed infrastructure projects at any time, for any reason. Frontier, in particular, abuses the challenge process – sometimes successfully, sometimes not – by submitting late and often unsupportable service claims.

Most of the comments from other organisations, including those that I drafted for the Central Coast Broadband Consortium, urge the CPUC to set reasonable limits on challenges. The endless attacks on independent projects by incumbents is a major reason that reviews of proposed projects can stretch out for more than two years.

The CASF program’s purpose is to improve California’s broadband infrastructure, not to protect monopoly businesses at taxpayers’ expense. It’s time to end the delays and make incumbents accountable, for both the service they provide and the claims they make about it.