Tag Archives: cpuc

“Essential” broadband is fixed service at 20 Mbps down/3 Mbps up, CPUC white paper says

by Steve Blum • , , , ,

Forbes ag tech hartnell alisal demo 13jul2107

“Voice and broadband services required for education; telehealth; safety; and participation in society, such as completing job applications and accessing government assistance programs” will be defined as “essential services” in California if recommendations by California Public Utilities Commission staff are eventually adopted by commissioners.

According to a staff white paper on essential utility service affordability, for broadband service that means a minimum of 20 Mbps download and 3 Mbps upload speeds, with a monthly data cap of no less than 1 terabyte (1,024 gigabytes). That’s significantly more than the 6 Mbps down/1 Mbps up service level that the California legislature adopted as the state’s minimum broadband speed standard when it bowed to bags full of cash polite requests from AT&T, Comcast, Charter and other incumbent telecoms companies eager to protect their monopoly model businesses.

People need reliable broadband connectivity, according to the paper, and it needs to be fixed service; mobile broadband doesn’t cut it…

Fixed broadband is an essential service for Californians to be able to participate fully in society. For example, telehealth usage had a 1,202% growth between 2012 and 2017. In addition, the Federal Communications Commission (FCC) states that “[a]ccess to broadband has become essential for students in all levels of education.” Furthermore, staff finds that mobile broadband services are not a viable substitute for fixed broadband services due to cost, access, and capacity limitations of wireless technology. For example, schoolwork, job applications, and government services are functions that are difficult, if not impossible, to accomplish on mobile. In addition, mobile services provide lower speeds, lower data caps, higher latency and higher prices compared to wireline broadband.

To determine whether all Californians can afford that level of service, the paper looks at three potential metrics: 1. the total cost of essential water, energy and telecoms service divided by household income remaining after housing costs are paid, 2. the number of hours of minimum wage work needed to pay that cost, and 3. a statistically based index that measures ability to pay on the basis of economic vulnerability.

Although the paper looks at some examples (more on that later), it doesn’t try to define what an affordable monthly price for broadband service, or other utilities, would be. Instead, it proposes a methodology for calculating those figures and a framework for applying it.

It’ll ultimately be up to the five CPUC commissioners to decide whether or not to adopt it. They ought to. It’s an excellent piece of work.

A workshop is scheduled for next Monday in San Francisco to discuss the methods and data proposed by the white paper, then public comments will be accepted in September. You can bet that incumbent telephone and cable companies will offer vociferous opposition.

Hancock, Ho, Sieren-Smith, Tome, Enriquez, Lai, Staff Proposal on Essential Service and Affordability Metrics, California Public Utilities Commission, 20 August 2019.

CPUC orders a do-over on PG&E–Crown Castle pole dispute decision

by Steve Blum • , , ,

White road attachment

A California Public Utilities Commission decision giving Crown Castle the right to work on Pacific Gas and Electric Company’s utility poles without permission, including attaching cables if PG&E doesn’t respond to requests for permission within a set time limit, was reversed on Thursday. Commissioners voted unanimously to send it back to the administrative law judge (ALJ) that originally heard it.

That doesn’t mean the substance of the decision will change, though.

PG&E based its request for a do-over on procedural grounds, claiming the CPUC didn’t follow its own rules for posting a proposed decision and giving the public – including particularly PG&E – the right to offer comments before a vote. Commissioners agreed…

We find that we did not follow the public review and comment requirement on proposed decisions, set forth in [the California public utilities code] and our Rules of Practice and Procedure. We grant rehearing and refer the proceeding back to the [ALJ] in order to serve a new proposed decision on the parties and provide the required public review and comment period (or issue a ruling, if appropriate, reducing or waiving the comment period). PG&E may raise any relevant remaining legal issues in comments to the proposed decision.

The core of PG&E’s legal objections is that the ALJ’s arbitrated decision ignored decades of past commission decisions and ran contrary to established policy for fairly, and safely, regulating the relationship between electric companies that own utility poles and the telecoms companies that use them.

ALJ Patricia Miles isn’t obligated to make any changes to the decision itself, and there’s no reason to think she will. The likeliest next step is for her to repost it with any minor changes to dates and such that might be needed. Thirty days later, or when ever the next meeting after that is scheduled, commissioners can vote again. In between, PG&E will have a chance to ask for changes.

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.

California telco deregulation bill amended, but not by much

by Steve Blum • , , , ,

Burlingame pole 8aug2019

The latest, but probably not the final, amendments to assembly bill 1366 are posted on the California legislature’s website. It’s the bill that would extend a current ban on regulation of “Internet protocol enabled” services, including, particularly, voice over Internet protocol (VoIP) service.

The new version does not address the core objection of telecoms labor unions and the California Public Utilities Commission. They say that because AT&T and Frontier are switching customers from regulated legacy telephone technology to unregulated VoIP service, extending the ban on VoIP regulation would effectively deregulate telephone service completely in California.

On the whole, the new amendments track with suggestions made in the most recent legislative committee analysis of AB 1366. The biggest change to the bill is to the extension itself: it’s now five years instead of ten. Another change is that telephone companies that have obligations to provide a basic level of voice service to anyone that wants it – AT&T is the biggest example – would still have to do that, even if they were using VoIP technology.

There’s still a requirement in the bill for residential VoIP providers to “initiate steps to restore service within 24 hours of receiving a report of a service outage” and complete the restoration within 72 hours, although there’s a long list of exceptions to the rule. Language was added to clarify 1. that the California attorney general “may” – not shall – “institute and prosecute actions or proceedings to enforce” the new rules, and 2. that the CPUC has no “jurisdiction or authority” in that regard.

Other changes require the CPUC to collect consumer complaints and forward them to the attorney general, and allow the California office of emergency services to set some 911 standards.

The Communications Workers of America, AT&T’s biggest union, is strongly opposed to the bill, and democratic lawmakers have been visibly uncomfortable with the idea of going against their wishes. Right now AB 1366 is in the hands of the senate’s appropriations committee, which will decide behind closed doors at the end of the month whether it moves forward or not.

State opposition to T-Mobile Sprint deal grows, as FCC is asked to close the case

by Steve Blum • , , , ,

Tmobile san francisco 18may2019

The wrangling over T-Mobile’s takeover of Sprint continues at the state level, even while the companies try to seal the deal with the Federal Communications Commission, on the basis of a settlement reached with the federal justice department.

The California Public Utilities Commission’s review of the merger will continue into Fall. Yesterday was the deadline for publishing a proposed decision – not that one was expected – to make it on the commission’s 12 September 2019 meeting agenda. Opponents of the merger want it to go even further, and have asked that the evidence gathering phase be reopened in light of the settlement. T-Mobile is yet to file its counter argument.

Since the settlement was announced, both Oregon and Texas have signed on to the multi-state lawsuit launched by state attorneys general to block the deal. The addition of Texas AG Ken Paxton lines a prominent republican up with a herd of democrats, and takes much of the anti-Trump edge off of what ought to be an antitrust issue. In a press release, Paxton said fewer competitors in the mobile marketplace means less service and higher prices…

After careful evaluation of the proposed merger and the settlement, we do not anticipate that the proposed new entrant will replace the competitive role of Sprint anytime soon…It is the Attorney General’s responsibility to preserve free market competition, which has proven to result in lower prices and better quality for consumers. The bargain struck by the U.S. Dept. of Justice is not in the best interest of working Texans, who need affordable mobile wireless telecommunication services that are fit to match the speed and technological innovation demands of Texas’ growing economy.

On the other hand, T-Mobile is appealing to its republican friends on the FCC, in the hopes of blocking any further review there. Lobbying groups representing mostly wireless broadband providers and rural telecoms companies want the FCC to take public comment on the settlement reached with the federal justice department, and on DISH’s request for extension of deadlines for making use of spectrum it already controls. T-Mobile’s response amounts to you’re already on our side, so what’s to discuss?

Prior to the announcement of the [antitrust settlement], a majority of the Commissioners publicly stated their support for the merger based on the record before the Commission. The additional commitments resulting from the Consent Decree only create added public interest benefits for consumers and competition…However, consideration of these additional benefits is not necessary to find the transaction to be in the public interest.

You’d think that maybe someone would want to confirm that the terms of the antitrust settlement are 100% benefits, but if everyone has already made up their minds, why bother?

DISH has spectrum for urban people and rural land, but maybe not for rural Californians

by Steve Blum • , , , ,

Dish aws3 spectrum per allnet insights and analytics via fiercewireless

Analysis done by Allnet Insights & Analytics for FierceWireless raises doubts about whether the settlement reached by the federal justice department with T-Mobile, Sprint and their new partner, DISH, will make a meaningful difference in rural California. The question is whether DISH has enough of the right kind of spectrum to offer the same kind of fast, high capacity broadband service it might in urban areas to California’s particular kind of rural communities.

The analysis and accompanying maps, as presented in an excellent article by Monics Alleven, “suggest DISH owns a lot of spectrum”. But it’s not evenly spread across California’s land area…

Allnet Insights President Brian Goemmer said he has typically focused on Dish’s spectrum holdings in major markets, and was surprised that Dish’s AWS–3 spectrum is fairly limited in rural areas. Based on his assessment, coverage is going to be Dish’s big challenge. There’s a big difference between covering all of the U.S. population versus having good enough coverage to take rural customers from AT&T and Verizon.

AWS–3 spectrum is a grab bag of frequencies that the FCC auctioned off beginning in 2014. It’s what’s known as mid-band spectrum, in the 1.7 GHz and 2.1 GHz ranges. Those bands are the workhorses of the mobile telecommunications world, with a good balance of total capacity, and propagation distance and penetration.

Those bands are particularly important in many parts of rural California, such as the Salinas and San Joaquin valleys, where people live in densely populated small (by Californian standards) communities. Low-band spectrum, which is typically thought of as a rural solution, is good at serving wide areas with low density populations, but won’t be as effective in what are for all practical purposes mini-urban communities in the middle of largely unpopulated rural areas.

It’s another good reason for the California Public Utilities Commission to take a fresh look at the merger, and not blindly accept the wisdom of T-Mobile and its friends in Washington, D.C.

With Frontier in free fall, California needs a Plan B

Frontier stock chart 8aug2019

Frontier Communications’ strategy of upgrading fiber speeds for high income, urban customers, and letting poor, rural ones rely on slow, wireless broadband systems didn’t seem to make an impression on Wall Street. The company’s stock price lost nearly 25% of its already diminished value after the release of second quarter 2019 results on Tuesday.

Even before this latest crash, a study by the California Public Utilities Commission concluded that Frontier is sinking in California, and it’s time to start thinking about what happens next…

While Frontier’s priorities are in maintaining and growing its [legacy telephone] properties, the company’s financial resources have become so deteriorated as to threaten its ongoing ability to pursue these priorities going forward. Frontier’s common stock price has dropped by around 98% since its high in February 2015, and as of April 10, 2019 its market cap was at $261.2- million – notably, Frontier has invested more than that in California alone over the first 21 months of its ownership. The parent company’s earnings have been consistently negative since the second quarter of 2016. Its annual debt service payments are now consuming more than one- fifth of its total operating revenues, making prospects for raising additional debt or equity financing extremely challenging. It is now abundantly clear that Frontier’s decision to purchase Verizon California in 2015 was both ill-timed and ill-conceived…

The Commission should establish a process to proactively examine the alternatives that would be available to maintain adequate service to Frontier California customers in the event that the parent company no longer has the financial resources to provide safe and reliable services in California.

That warning was published last month, and relied on data that was current as of April 2019. At the end of that month, Frontier’s share price was $2.85, which was about 2% of its 2015 high of $125.70 (after factoring in a reverse split). Yesterday it closed in penny stock territory at 93¢, less than 1% of its peak value and less than a third of its April high.

Two million Californian homes look to Frontier for telephone and broadband service, and many of them have no other option, as the CPUC report notes. The time for being proactive is running out.

Frontier CEO confirms affluent, urban communities to get 1,000X better broadband than poor, rural ones

Frontier 2q2019 broadband results

On Tuesday, Frontier Communications’ CEO confirmed the findings of a California Public Utilities Commission study that concluded that Frontier (as well as AT&T) is “disinvesting in infrastructure overall”, and the disinvestment is “most pronounced in the more rural and low-income service areas”. The company released its financial results for the second quarter of this year on Tuesday, announcing a $5.3 billion loss for the three months and 71,000 fewer broadband subscribers.

Most of the lost accounts – 46,000 – were DSL customers, served, at least in California, via decaying copper networks Frontier acquired from Verizon. Much of that territory is rural, and falls under the federal Connect America Fund subsidy program. Frontier affirmed it is switching to low capacity fixed wireless broadband systems in CAF territories, which in theory will deliver the 10 Mbps download and 1 Mbps upload speeds (actually, 8 Mbps down/800 Kbps up, 80% of the time) that the program requires.

That’s in contrast to the 10 Gbps upgrades that Frontier announced it was making in high capacity, fiber-to-the-home (FTTH) systems formerly owned by Verizon, which are predominantly in more affluent urban and suburban communities. This thousand-fold disparity between Frontier’s rural and urban infrastructure is a deliberate strategy, according to the Seeking Alpha transcript of CEO Dan Murphy’s conference call with Wall Street analysts…

Our objective continues to be to optimize our business, leveraging our best assets for future growth, while managing the elements of our business in secular decline by executing on cost efficiency programs and selective capital investment.

“Best assets” = FTTH to people with money to spend; “elements…in secular decline” = copper systems where household incomes are low. Murphy was straightforward with the analysts, not just because that’s what they wanted to hear but also because there are criminal penalties for lying to Wall Street.

Unlike lying to the CPUC: when seeking approval to take over Verizon’s systems, it claimed it “is strategically focused solely on wireline telecommunications” and “all of Frontier’s capital and human resources are concentrated on wireline communications services”.

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.

Wrangling over T-Mobile’s federal antitrust settlement continues in California

by Steve Blum • , , , ,

Two organisations that largely make their living objecting to utility company requests at the California Public Utilities Commission, and then billing the company involved or the CPUC for their time, filed a me too response yesterday to T-Mobile’s bid to speed up review of its proposed merger with Sprint.

T-Mobile, Sprint and DISH reached an agreement a couple of weeks ago that satisfied anti-trust objections raised by the federal justice department. The deal would let T-Mobile take over Sprint, while DISH would get reseller rights on the new network, and spectrum and retail assets to eventually build a competing system. They then asked the CPUC to accept the federal settlement as received wisdom and approve it immediately.

The CPUC’s public advocates office and a major telecoms union swiftly replied, arguing that 1. there was no procedural basis for what T-Mobile asked, and 2. the new deal with DISH needs to be examined rather than rubber stamped.

TURN and Greenlining, which style themselves utility consumer advocates and vigorously partake of the CPUC’s “intervenor compensation” program, [restated those arguments in yesterday’s filing](https://tellusventure.com/downloads/cpuc/t

mobile_sprint/turn_opposition_motion_to_advise_tmobile_sprint_5aug2019.pdf). DISH’s plans, in particular, took some heat, raising the question of how deeply and actively it might need to be involved as the CPUC’s merger review moves ahead.

They also rightly accused T-Mobile of “dismiss[ing] the need for a [CPUC] review and public interest determination of its wireless transaction, instead operating under the presumption that the commission’s review of the wireless transaction has no legal effect”.

There’s no end in sight yet, for either the tussle over the DISH settlement or for the CPUC’s review overall. Last week, T-Mobile asked for and received emailed permission from the administrative law judge managing the case to file a response to everyone’s objections. They can do that any time in the next couple of weeks, but don’t expect them to wait very long.