Tag Archives: casf

Picker ends his term as CPUC president

by Steve Blum • , ,

Picker 20may2019

Yesterday was Michael Picker’s last meeting as president of the California Public Utilities Commission. He stepped down at the request of California governor Gavin Newsom, who named Marybel Batjer, his strike team leader, to head the commission. She’ll be able to assume the job while the state senate decides whether to confirm her appointment.

Picker leaves behind positive accomplishments. He took over from Michael Peevey, who was under criminal investigation for backroom dealings. The switch from Peevey’s big man on campus persona to Picker’s soporific style was effective in dampening much of the heated criticism of the CPUC at the time. He brought order to the CPUC’s management and executive decision making processes, and pushed hard for a safety-first culture, both at the commission and at the companies it regulates.

Telecommunications policy in general, and broadband in particular, were not Picker’s forte. His focus was energy, particularly climate change and decarbonisation issues. When it came to telecoms, he typically took the side of monopoly model incumbents, although he tried to spin it differently.

In 2016, when the CPUC ultimately opposed AT&T’s attempt in the California legislature to kill its wireline obligations, Picker dissembled before voting in favor of giving AT&T what it wanted: he worried about preventing fiber upgrades – nonsense, AB 2395 had many faults but that wasn’t one – and talked about creating a technological road map first, something that would have required years to complete while the legislature would be voting in a matter of days.

It was common for Picker to take positions that aligned with the interests of AT&T and other major telecoms companies. He maneuvered a vote to allow telcos to pay fines to themselves when they fail to meet quality standards, he tried to kill an investigation of telco infrastructure and service quality, and he routinely said no to subsidies for independent broadband projects while finding no fault with similar grants to incumbents.

Picker’s most recent recital of AT&T talking points came during a workshop in Sacramento in May, when he questioned whether unserved Californians need wireline “broadband to the home”, because people can use mobile phones instead.

There’s no question that energy issues – near and long term – are the CPUC’s most pressing problems. Devastating wildfires and Pacific Gas and Electric’s bankruptcy can be directly linked to climate change. Picker was correct in putting energy at the top of his agenda. Being the odd man out on telecoms policy wasn’t helpful, but wasn’t a disaster either.

A decade late and megabucks short, Kern County fiber project gets environmental approval

by Steve Blum • , , ,

Caltrans slow 2

After ten years of review, the California Public Utilities Commission is about to approve environmental clearances for a middle mile fiber project in Kern County, subsidised by the California Advanced Services Fund (CASF). Mediacom, a cable company that owns a handful of scattered systems in remote parts of California, applied for a $286,000 CASF grant in 2009, intending to build a 32 mile middle mile fiber route from Inyokern – an unincorporated community along U.S. 395 near Ridgecrest – to its system that serves the Lake Isabella area in eastern Kern County.

The CPUC speedily approved the grant, which represented 40% of the total cost of the project at the time. Back then, CASF typically subsidised less than half of the construction cost of broadband infrastructure projects. These days, that figure could be as high as 100%.

It’s not a complicated build, or one that should raise legitimate environmental objections. The plan was, and still is, to install fiber generally along state route 178, mostly by burying it in the already-developed right of way. Some problematic segments would run on existing pole routes or, in one case, underneath a bridge.

The draft resolution that the CPUC is scheduled to vote on next week doesn’t explain why it took a decade to figure out that the environmental impact of such a project is effectively nil. Anecdotal reports over the past decade have pointed the finger of blame at federal agencies and Caltrans, all of which have a role to play. But the CPUC is the lead agency for environmental approvals of this sort, and ultimately bears responsibility for getting it done.

A lot has changed since 2009. The cost of installing broadband conduit has steadily increased, largely due to demand for new fiber growing faster than the supply of contractors and skilled workers able to install it. Another factor is a state law, passed in 2014, which imposes so-called “prevailing wage” requirements on CASF projects. Instead of paying market rate wages, contractors on CASF-subsidised projects have to pay union scale rates blessed by a state agency. The CPUC has, however, approved grant supplements in the past to cover the difference.

Even so, what was a six-figure construction project in 2009 is easily a seven-figure project today. Assuming Mediacom builds the project, it might reasonably conclude that it would have come out ahead financially if it had paid the entire 2009 tab itself.

“Hunger games” duels for broadband subsidies proposed by FCC

by Steve Blum • , , , ,

Hunger games

Broadband subsidies from the Federal Communications Commission are paid for out of the Universal Service Fund" (USF) which, in turn, gets its money from taxes on telephone bills. The FCC runs four programs that way: the Rural Digital Opportunity Fund (formerly known as the Connect America Fund), the e-rate program that pays for broadband service to schools and libraries, the rural health care program, which does the same for hospitals, and the Lifeline program, which buys down service costs for low income households.

Altogether, $11.4 billion was collected for the four accounts last year. The FCC’s republican majority believes “capping the Fund overall will strike the appropriate balance between ensuring adequate funding…while minimising the financial burden on ratepayers”. The next step would be “prioritizing the funding among the four universal service programs and…evaluating the tradeoffs associated with these funding decisions”.

Right now, budgets and priorities for the four programs (and the taxes imposed) are set individually. Instead, the FCC wants to lump together all the broadband (and legacy telephone) subsidy programs, set a limit on the total funding and then direct the money according its own priorities. That would provoke mortal combat according to democratic commissioner Jessica Rosenworcel who said it would “unleash[] a fight for support between connecting kids in schools and hooking up hospitals” and called the proposal “the universal service hunger games”.

The FCC is taking reply comments from interested parties about its proposal. On Thursday, the California Public Utilities Commission went on record opposing it. Directly or indirectly, California backstops those programs with money from state taxpayers, and limiting or shifting federal dollars could raise costs here.

Another problem with USF that the CPUC points out is that it’s funded by taxes on old school voice service, but the money mostly goes towards broadband…

The FCC has explicitly declined to assess surcharges on broadband Internet access service even though almost all the USF programs subsidize only broadband services…The FCC should address this discrepancy by expanding the base of services to fund the USF, rather than continuing to rely inequitably on a shrinking number of ratepayers who purchase the assessed services that fund the USF.

On top of that, the FCC claims that broadband is an “information” service, rather than a “telecommunications” service. Continuing to subsidise it with taxes collected via telephone bills could become problematic.

Final reply comments are due on 26 August 2019.

Caltech turns eastern California fiber network into earthquake detector

by Steve Blum • , , , ,

Caltech readout

Fiber optic networks do more than just ride out major earthquakes without dropping a bit. They can also detect and collect data on the quakes themselves. Two major quakes – magnitude 6.4 and 7.1 – hit eastern California on 4 and 5 July 2019 respectively, in the high desert of Kern and San Bernardino counties, where seismometers aren’t thick on the ground. To understand what happened, and what continues to happen, Caltech scientists needed to quickly get more sensors into the field.

Fortunately, the eastern slope of the Sierra Nevada – Mono, Inyo, Kern and San Bernardino counties in California, and Washoe and Douglas counties and Carson City in Nevada – has fast, earthquake ready fiber connectivity.

The Digital 395 open access fiber optic network, which links Reno to Barstow along the eastern Sierra, runs right through the area that was hardest hit. By connecting “surveillance technology initially developed for military and general security applications that can detect ground movement” to a single fiber strand, an underground fiber route – or sections of it, at least – can be used for “pre-shock detection of P and S waves across the fibers”, according to Michael Ort, CEO of Praxis Associates/Inyo Networks, which built and operates Digital 395. In other words, fiber optic networks can be used detect the big incoming shockwaves a few critical seconds before they hit, as well as provide valuable scientific data about the event.

Preliminary discussions about installing distributed acoustic sensing equipment had been held with Caltech, but everything went into high gear when the quakes began hitting Ridgecrest. Zhongwen Zhan, a Caltech scientist, asked about using one of Digital 395’s strands, and got a quick yes from Ort.

He hooked up his instruments on 9 July 2019, four days after the 7.1 quake and while the ground was still shaking with aftershocks. The results were immediate, with multiple (mostly small) quakes detected every minute, beginning as soon as the equipment was turned on.

“The fiber gave them about 5,000 sample points over 10km of fiber. Before they had only a handful of sample points in the area. So you got only “discrete points” of these, not the overall picture”, Ort said.

“This first time ever use of fiber has given us many data points, making our observations more complete and natural”, said Mark Simons, JPL chief scientist and CalTech professor of geophysics. “It’s a true breakthrough that will revolutionise our perspective and help with early warning”.

Digital 395 was built with money from the 2009 federal stimulus program and from the California Advanced Services Fund (CASF). It was the first and the longest of the open access middle mile fiber routes funded by CASF, before the California legislature bowed to pressure (and money) from incumbent telephone and cable companies and banned those types of projects.

CPUC is next target for Newsom’s “strike team” leader

by Steve Blum • , , ,

Batjer 2014

The new president of the California Public Utilities Commission is Marybel Batjer. Originally appointed by governor Jerry Brown, she heads the California government operations agency, which oversees “procurement, real estate, information technology, and human resources” for all state agencies. Governor Gavin Newsom announced on Friday that she will replace outgoing president Michael Picker.

Batjer seems to like a challenge. In his brief six months in office, Newsom has already tapped Batjer to clean up two bureaucratic black holes: the Department of Motor Vehicles and state government’s information technology “mess”. She’s leading Newsom’s “DMV Strike Team”, which has the daunting task of creating “a more customer-friendly and user-centered culture” at the agency. She will wrap up that assignment this month before taking on the CPUC.

Her resume is impressive. Batjer worked as cabinet secretary for former California governor Arnold Schwarzenegger and chief of staff for former Nevada governor Kenny Guinn, and held top level jobs in state and federal government, all the way back to the Reagan white house. No one will have to explain to her how state bureaucracies do and don’t work.

She’s not a career political minion or a former utility executive, and there’s no evidence of particular telecoms, energy or regulatory policy expertise in her background. Add it all up, and you get a bureaucratic turnaround specialist.

If you’re interested in hearing her talk about remaking California government to “meet the needs of our digital society”, and attracting and retaining millennials in the state workforce, click the picture above to see the video.

Newsom made a shrewd choice. As with the DMV, there’s no affection for the CPUC in the California legislature. No one has tried to disestablish it (yet) this year, but antipathy toward the commission is a driving force behind assembly bill 1366, which would deregulate telephone service in California. Perhaps not as a big a driving force as the money that AT&T, Comcast and other monopoly-model incumbents pay to state legislators, but it serves well as a closing argument.

The California senate has to confirm Batjer, but she can begin the job while that’s going on. There’s about a year and a half left on Picker’s term, so she’ll have to be reappointed if she’s planning to stay beyond the end of 2020. There’s no obvious opportunity for Newsom to make further changes – absent resignations, the roster of commissioners is set until then.

California-funded fiber keeps (most) quake hit communities connected

by Steve Blum • , , , ,

Digital 395 19sep2013

I planned to write about Trona and Searle Valley today, but not with earthquakes in mind. Instead, I was going to look at a recent California Public Utilities Commission ruling that, in effect, disavowed a previous and pusillanimous decision to deny broadband infrastructure grants in those two towns. That’s for later. For now, it’s about the eastern California communities that got state and federal broadband grants and, as a result, maintained modern, gigabit-class broadband connectivity even as two major earthquakes – 7.1 and 6.4 magnitude – and a continuing swarm of fore and aftershocks hit.

After chopping out Trona and Searle Valley, the CPUC approved a 2016 California Advanced Services Fund (CASF) grant for fiber-to-the-home infrastructure in three other small towns in the Ridgecrest area, Randsburg, Johannesburg and Red Mountain. Race Communications built and now runs those systems, which continued to deliver gigabit service despite this weekend’s shaking, according to chief technical officer Carlos Alcantar.

Race’s last mile service was supported by Digital 395, a 500+ mile middle mile fiber network that runs from Reno, down the eastern side of the Sierra Nevada, to Barstow, linking communities along U.S. highway 395 to major east-west fiber routes. It was also funded by grants from CASF, and from the 2009 federal stimulus program.

“The network did great, and was a critical lifeline for the hospital”, said James Suver, CEO of the Ridgecrest Regional Hospital and a Digital 395 board member.

According to Michael Ort, CEO of Praxis Associates/Inyo Networks, which built and operates Digital 395, the many public safety agencies, utilities and telecoms companies that rely on it stayed connected throughout the weekend…

We lost commercial power, but went to battery and generator in Ridgecrest. We’ve had other earthquakes, but nothing like this…

We also continued to beef up the reliability of the network as we learned about weaknesses: north-south redundancies, redundant routing up the central valley, multiple service providers feeding in and out of the network…

The fact that there was-real time international news coverage of the event (internet, TV video) is because it travelled on our network. I got a text from a friend in Paris within 10 minutes, asking if we were okay, which is a testament on how fast information travels today.

Reliable communication infrastructure and service is an absolute requirement for effective disaster response and recovery. By all accounts, emergency services in Kern and San Bernardino counties performed flawlessly this weekend. Without these two CASF-subsidised fiber projects, the story might have been different.

Update 10 July 2019: added quote from James Suver.

100 Mbps broadband means 0.2% to 0.3% lower unemployment, biggest impact in rural communities, study says

by Steve Blum • , , , ,

We can do it

Faster and better broadband service means more jobs and lower unemployment. Rural communities benefit more from gaining access to high quality broadband service than urban and suburban areas. That’s the conclusion of a study by three researchers, Bento Lobo and Rafayet Alam at the University of Tennessee at Chattanooga’s finance and economics department, and Brian Whitacre – at Oklahoma State University’s agricultural economics department.

They compared high speed broadband availability – defined as 100 Mbps download speed or better – to unemployment statistics in Tennessee between 2011 and 2015. They also factored out a potential source of bias: the tendency of Internet service providers to upgrade infrastructure and service in richer communities while redlining poorer ones.

Their results are dramatic…

High broadband speed matters and results in approximately 0.26 percentage points lower unemployment in counties with high speed compared to counties with low speed broadband…Additionally, early adoption of high speed broadband could reduce unemployment rates by an average of 0.16 percentage points per year. The results also show that compared to urban areas, the benefits of better quality broadband are disproportionately greater in rural areas.

From a policy standpoint, our research shows that investments in faster broadband can have significant employment effects, especially in rural areas…While it may make little difference to move from 10 Mbps to 25 Mbps, it could (and our results suggest that it does) make a significant difference to move to 100 Mbps or higher speeds…Our results consistently show that access to faster speed results in a decrease of 0.2 – 0.3 percentage points in unemployment, which can be in the 100s of jobs for some counties.

It’s a landmark study, and deserves to be read in its entirely, not least for the thorough review of past research into the economic benefits of better broadband service. The results also track with research conducted last year by the Monterey Bay Economic Partnership and the Central Coast Broadband Consortium, which found that broadband service at 100 Mbps download and 20 Mbps upload speeds is the minimum necessary for full participation in today’s digital economy.

Lobo, B., Alam, R., Whitacre, B. (2019). Broadband Speed and Unemployment Rates: Data and Measurement Issues, Telecommunications Policy, April 2019

Shift California’s broadband subsidies from consumer upgrades to paying incumbents to serve public agencies, CPUC told

by Steve Blum • , , ,

There’s an idea on the table to make it even easier for big, monopoly model broadband service providers to tap into the taxpayer-funded telecoms piggybank created by the California legislature when it approved assembly bill 1665 a couple of years ago. AB 1665 rewrote the rules for the state’s primary broadband infrastructure subsidy program, the California Advanced Services Fund (CASF).

The latest proposal to remake CASF surfaced at a panel discussion organised by the California Public Utilities Commission in Sacramento a couple of weeks ago. One of the panelists, Sunne McPeak, the CEO of AB 1665’s sponsor, the California Emerging Technology Fund (CETF), signaled that she wants to expand CASF to include, among other things, funding “public safety” projects.

On the face of it, that sounds like a wonderful thing, but it would be a radical change for CASF. It means flipping the fund from building infrastructure and increasing broadband availability for everyone to, in effect, subsidising ongoing operating expenses for public agencies. In other words, CASF would be absorbed into the state’s information technology budget, whether or not (likely, not) extra money was put into it.

Even if CASF money was strictly limited to paying for construction costs, it would act as an operating subsidy by offsetting upfront installation charges, which are paid out of public agency budgets, either all at once or over time. It’s a golden opportunity for companies like AT&T that can shift resources and facilities away from less profitable homes and small businesses, and toward more lucrative institutional services in rural areas where they maintain monopoly control.

A remote fire station or a county fairgrounds might get wicked fast broadband service – as it should – but it would be a zero sum game with the local economy ending up on the losing side. The better way to do it is to upgrade rural broadband infrastructure, particularly middle mile fiber, that serves everyone, public safety agencies and ordinary people alike.

It might or might not be too late to roll this gift to major incumbents into a bill during the current legislative session. The workings of the California legislature are more opaque this year, with greater power to decide the fate of bills given to committee chairs who can, and do, collect cash from politically generous cable and telephone companies. It’s possible to slip special benefits into existing bills, or create brand new ones via the gut and amend process, as the legislative session winds down to its September conclusion.

This year, next year or the year after: keep a close watch.

AT&T, Charter, Comcast, Frontier, Digital Path challenge California broadband subsidy proposals

by Steve Blum • , , , ,

Santa barbara county pole 29oct2015

Of the 13 new projects proposed for construction subsidies from the California Advanced Services Fund (CASF) in May, only four are unchallenged: three proposed by Charter Communications in Riverside, San Bernardino and Ventura counties, and one proposed by a wireless Internet service provider in Sonoma County. The rest face objections from incumbent Internet services providers that want to protect their turf.

Ten challenges, plus a snarky letter from AT&T, were filed against broadband projects being reviewed for CASF grant eligibility by yesterday’s deadline. Under the rebooted CASF rules, an incumbent provider has, effectively, five weeks to submit evidence that it offers broadband service at the California legislature’s pathetic minimum of 6 Mbps download and 1 Mbps upload speeds in census blocks where a CASF infrastructure grant is requested.

None of the publicly distributed challenge notifications contain any details about incumbents’ broadband coverage or availability. That data is submitted separately to CPUC staff. But if you want to read the notices, you can find them here.

Charter Communications and Frontier Communications are challenging each other’s projects. Frontier is fighting Charter’s request for $277,000 to build 12 miles of new lines in Perris in Riverside County; Charter objects to Frontier’s $1.7 million project in the Taft area of western Kern County.

Charter also joined with Comcast and, sorta, AT&T to try to block a $5.3 million proposal from Cruzio to offer fiber-to-the-home service to 13 mobile home parks in Santa Cruz County. Comcast and Charter filed standard challenge notices and presumably provided valid broadband availability data to CPUC staff; AT&T sent a letter helpfully reminding CPUC staff to read the rules.

The most prolific challenger, though, is Digital Path, a Butte County-based wireless ISP that apparently wants to kill six proposals to build out broadband service to nearly a thousand homes in Lassen, Modoc and Plumas counties. It’s challenging Frontier’s $11.8 million DSL upgrade plan for the northeastern corner of California, and four FTTH and one FTTH/wireless hybrid projects, also totalling $11.8 million, proposed by Plumas-Sierra Electric Cooperative.

I’m collecting the 2019 CASF infrastructure grant proposals here. Information about the program is here. All the CASF-related documents I’ve collected in 2019, including the challenge notifications, are here.

The Central Coast Broadband Consortium assisted Cruzio with its Equal Access Santa Cruz grant application, and I was a part of that effort. I’m not a disinterested commentator. Take it for what it’s worth.

Picker quitting as CPUC president, as soon as Newsom picks a replacement

by Steve Blum • , ,

Picker 20may2019

Michael Picker will step down as president of the California Public Utilities Commission sometime in the coming weeks or months. He made the announcement at the end of last week’s CPUC meeting…

I’ve made comments, mostly joking, about retiring before I have to buy a new business suit, and more recently I’ve been thinking about retiring regardless of how shabby my clothing is. So you always can think of reasons of why you should stay and why you’re essential in the greater purpose of the organisation that you serve.

But to be honest with you it makes a great deal of sense for me to leave after the wildfire proceedings are voted out and the governor’s ninety day plan is released and then we have a plan for actually meeting our responsibilities in that plan. That’s been my conversation with the folks in the governor’s office and I made it clear that I’ll stay around until they’ve found the person that they want to replace and fill the position at the CPUC.

I’ll probably talk more about it as we get closer and they get closer – it could be as soon as July but probably more likely sometime after July. I can’t really say because I think they have to think long and hard about the needs of the organisation and the direction that they want to go to find a person to replace me. So thank you.

Picker was first appointed to the commission by then-governor Jerry Brown in 2014, and promoted to the top job a year later when Michael Peevey’s term as president expired. His retirement is not shocking news. He had a close, long term working relationship with Brown, but there’s no indication that he’s a member of governor Gavin Newsom’s inner circle.

On the other hand, it would be hard to find someone more qualified to be CPUC president than Genevieve Shiroma, Newsom’s first appointment to the commission earlier this year. Her resume includes an engineering degree, a career as a senior manager at the California Air Resources Board, and 20 years experience on both the Sacramento Municipal Utilities District board and the Agricultural Labor Relations Board, including terms as board president and chair, respectively.

The “folks in the governor’s office” might not need to think very long or very hard.