Tag Archives: cpuc

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.

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.

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.

San Francisco court punts net neutrality decision back to D.C.

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It was nice while it lasted, but Washington, D.C.’s inexorable gravity has pulled the court fight over network neutrality – or lack thereof – away from San Francisco and back inside the Beltway.

Originally, a judicial lottery determined that the fifteen challenges to the Federal Communications Commission’s decision to roll back network neutrality and broadband status as a common carrier service would be heard by the federal ninth circuit appeals court in San Francisco, where Santa Clara County and the California Public Utilities Commission filed their cases. The prospect of the future of net neutrality being decided in the shadow of Silicon Valley was delicious, but not for the D.C.-based groups that made up the bulk of the challengers. So they asked for the consolidated cases to be moved back to D.C…

Transfer is warranted by all of the factors considered by this Court, including the convenience of the parties, the choice of forum made by the majority of the petitioners, and the fact that this Court’s sister Court for the D.C. Circuit has considered virtually identical issues in inter-related proceedings. Specifically, this case is the fourth, “follow-on” phase in the review of the Federal Communications Commission’s “network neutrality” actions; all prior phases have been adjudicated by the D.C. Circuit. That Court has issued four decisions in these prior three proceedings, variously affirming, or disagreeing with, the FCC’s actions. Transfer is warranted in the interest of continuity.

Santa Clara County and the CPUC didn’t support the request, but they didn’t oppose it either and the ninth circuit approved the transfer.

One of the first issues that the D.C. appeals court will likely decide is whether or not to put the FCC’s net neutrality repeal on hold while the cases are being heard. In past net neutrality cases, the D.C. court declined to do so.

Charter’s numbers don’t add up, so New York adds a $1 million fine

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Charter Communications is playing numbers games with its build out obligations and the State of New York’s Public Service Commission is blowing the whistle. Not just stopping the game, but also assessing a $1 million penalty.

As in California, conditions were attached to New York’s approval of Charter’s purchase of Time Warner Cable. Those obligations include “the extension of Charter’s network to pass an additional 145,000 homes and businesses across the State”. Charter has four years to complete that build out and must steadily complete 25% of the job each year.

In January, Charter reported mission accomplished for 2017. But the New York PSC went out and ground truthed Charter’s claims of new homes passed, and found the numbers were inflated. Of the 43,000 homes that Charter said it reached with the required “line extensions”, 12,000 were in New York City which, according to the PSC, was already 100% covered…

In addition to the fact that these addresses have pre-existing network already serving their locations, supported by the lack of pole applications associated with any of these passings…the Commission explicitly stated in the Approval Order that Charter’s buildout was required to occur in “less densely populated and/or line extension areas.” New York City is not such an area.

Even in those less densely populated areas, Charter padded its claims, according to the PSC…

Staff advises that many of these claimed newly completed passings actually consisted of cable and equipment upgrades to existing cable plant. In other words, Charter replaced older cabling and equipment on a pole with newer cabling and equipment, but the location had already been passed by the cable network, oftentimes having been originally passed with cable network for years.

So the PSC crossed another 2,000 homes off the list. As a result, Charter was 8,000 homes short of its 37,000 home obligation and got whacked with a $1 million fine. And faces the threat of losing its New York cable franchises completely if it blows it again. As you might expect, Charter begs to differ, calling the PSC’s conclusions “baseless and legally suspect” and promising to fight the order.

State of New York Public Service Commission, Order to Show Cause, Joint Petition of Charter Communications and Time Warner Cable, 19 March 2018.

FCC sets up rich exurb versus poor rural, urban debate over broadband subsidies

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Should low income areas be first in line for broadband subsidies? That’s a question that both the Federal Communications Commission and the California Public Utilities Commission are asking. The CPUC is considering giving priority for California Advanced Services Fund infrastructure grants to communities where median household income is at or below $49,200 a year.

The FCC floated that same idea last week. In the course of approving limits on allowable expenses for some subsidised rural broadband projects, it decided to take the next step and ask for public comment on possible approaches: giving eligible consumers a theoretical choice of providers through a voucher system, adding household income to the criteria for picking eligible areas, or even basing federal subsidies on a state’s ability to pay…

For example, should we target support not only to high-cost areas but low-income areas as well? Should we adopt means-testing within the high-cost program? Either approach could target support where it is needed most by focusing only on areas or consumers with lower household income. Should we award support for high-cost areas through a portable consumer subsidy or voucher? Would a voucher system increase the choices available to consumers? Should we target support to States with less ability to fund the deployment of broadband in rural areas? How should we identify States that are most in need of support, and how can we do so while avoiding perverse incentives? Are there other alternatives we should consider?

Two commissioners, who are usually on opposite sides of issues but sometimes find common ground, both support a means-tested approach to subsidies. Mignon Clyburn and Michael O’Rielly – democrat and republican, respectively – began pushing for it last year.

For them, the question boils down to whether taxes on phone service – specifically earmarked for rural broadband subsidies – paid by people living in low income, urban areas should go towards upgrading broadband service in high income exurbs or resort communities. The FCC is asking the public to offer suggested answers.

Updated comments on California’s broadband subsidy program posted

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More comments are in about how broadband adoption programs should be funded by the California Public Utilities Commission. Or rather, I’ve found more comments – the filings from the CPUC’s office of ratepayer advocates (ORA) and the Central Sierra Connect regional broadband consortium landed in my spam folder last week.

It’s a chronic bug in the CPUC’s service list system. Anytime you submit something – comments, grant applications, motions, protests, whatever – regarding a formal CPUC proceeding, you have to send copies to anyone who’s signed up to be notified. That’s great in theory, but the practice of sending files to dozens, sometimes hundreds, of people all at once is sure to trip spam filters from time to time, both incoming and outgoing. I guess finding a fix is one more thing to put on the cosmic to-do list.

ORA suggests reexamining the $49,200 median household income benchmark for determining whether a community gets preference for being “low income”…

Since this income threshold applies to a family of four,26 it is not an appropriate metric for communities with significant numbers of single occupancy households or households with five or more people…

Moreover, because the cost of living in California varies so widely, an income of $49,200 could be considered low-income in some areas, but not in others…Although publicly available data are not available to determine whether California households earning between $40,000 and [$49,200] have low adoption rates, it is clear that households earning less than $40,000 have low adoption rates.

The City and County of San Francisco submitted revised comments, dropping is argument that funding levels for digital literacy and broadband access programs should be higher because Microsoft’s Windows system doesn’t include software for visually impaired users – turns out it does.

All the comments, including those newly unearthed, are below.

Regional Broadband Consortia
Central Coast Broadband Consortium
Central Sierra Connect
CSU Chico Geographical Information Center (Northeastern and Upstate California Connect Consortia)
Gold Country Broadband Consortium
North Bay North Coast Broadband Consortium

Public Agency
City and County of San Francisco (revised comments)
Office of Ratepayer Advocates

Internet Service Providers
Bright Fiber Network, Inc.
California Cable and Telecommunications Association
Frontier Communications

Non Profit Organisations
California Emerging Technology Fund
Radio Bilingue, Inc.
Satellite Affordable Housing Associates
Tech Exchange
Tenderloin Neighborhood Development Corporation
TURN

CPUC scoping memo and proposals
Scoping memo and ruling of assigned commissioner, Martha Guzman Aceves, CASF program changes, 14 February 2018
Appendix A, AB 1665 changes to CASF program
Appendix B, CPUC staff proposals for broadband adoption, public housing and loan programs
Appendix C, CPUC staff proposed changes for broadband infrastructure grant, line extension and regional broadband consortia programs

Frontier, cable lobbyists urge CPUC to cut them in on public housing, broadband adoption decisions

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Big telco and cable interests accounted for two of the fourteen organisations that commented on proposed changes to the California Advanced Services Fund’s (CASF) broadband subsidy program for public housing and the new digital literacy and broadband access grants that’ll be available later this year. Frontier Communications and cable lobbyists submitted their remarks on Friday. AT&T was silent.

The California Cable and Telecommunications Association (CCTA), which is the lobbying front for Comcast, Charter Communications and other cable companies in California, wants the CPUC to better protect its members’ monopoly business model in public housing communities. Changes in the law – pushed by CCTA and cable company lobbyists – make it impossible to use CASF grants to install free WiFi in public housing properties where there’s cable service. Cable companies do offer low cost Internet service to people who qualify, as most, if not all, those who live in public housing do. But they also use those programs as opportunities to up sell residents into expensive, market rate TV (and broadband and phone) bundles.

To make sure that Charter and Comcast and the others can defend those walled gardens, CCTA’s comments recommend that the CPUC allow greater opportunities to challenge public housing grant proposals, even to the extent of knocking applications off the current fast track review process simply by raising “legitimate concerns”. Which can mean pretty much anything. Including digging around to see if applicants are using cable connections to feed WiFi hotspots, which is another of CCTA’s peeves.

Frontier’s comments can summed as give me the money. One recommendation is that adoption programs should be tied to, or at least prioritised for, CASF infrastructure projects. Which is convenient because last year’s legislative changes largely limit those grants to Frontier and AT&T. Other recommendations go sideways from there, asking the CPUC to hurry up and approve Frontier’s infrastructure project subsidies.

Reply comments – rebuttals or otherwise – are due 2 April 2018, and the CPUC is expected to decide how to move forward with the public housing and adoption grant programs sometime in June.