Tag Archives: cpuc

CPUC reboots California broadband infrastructure subsidies, as well as can be hoped

by Steve Blum • , , , ,

California has more than $300 million available to subsidise broadband infrastructure, thanks to a law passed last year by the California legislature. Also thanks to that law, the rules governing who can get the subsidies and where it can be spent were rigged, with the aim of protecting telco and cable monopolies, and funneling money into their pockets.

It was up to the California Public Utilities Commission to rewrite the rules that subsidy applicants have to follow and that govern how broadband subsidy proposals will be evaluated and approved. Or not.

That process went on for nearly a year, with lobbyists for Comcast and Charter Communications, lawyers for AT&T and a hodgepodge of staffers for Frontier Communications working hard 1. to prevent independent, competitive Internet service providers from getting any money, 2. to make sure they had unimpeded access to it, and 3. to avoid any inconvenient restrictions on what they could charge or what level of service they could deliver to subsidised communities.

Yesterday, by a unanimous vote, the CPUC approved new rules that both stay within the narrow lines drawn by telco lobbyists California lawmakers and provide independent, community-driven projects as good a chance of being funded as the law allows.

This rewrite of the California Advanced Services Fund (CASF) program was led by commissioner Martha Guzman Aceves. Following the vote, she said the goal is to focus broadband infrastructure spending on the communities that need it most, and get it to them as quickly as possible…

This [decision] approved a framework towards meeting the regional goals, now, of 98% per consortia region – those are geographical regions throughout the state – to try to get more parity and access throughout the state.

The [decision] sets up a faster application review timeline, it sets up clear funding rules that allow an applicant to determine ahead of time how much funding an application is eligible to receive…

These new rules improve the accuracy of data, as well, used to determine eligibility. Over the years we’ve had many struggles here, in our decisions, about whether or not a community is served. And this provides much clearer rules to determine that.

The PD also prioritises low income areas, that are unserved and, at best, have dial-up service. The applications that serve these unserved low income areas will receive 100% funding.

The first application window for this new round of CASF infrastructure grants closes 1 April 2018.

Revision 2 of proposed decision of commissioner Guzman Aceves, implementing the California Advanced Services Fund infrastructure account revised rules, published 12 December 2018 and approved on 13 December 2018.

Revised appendix, detailing the application process and grant eligibility rules.

Links to other documents – decisions on other issues, drafts, comments and more – are here. I’ll post the final version of the decision and the appendix there, when available. But the final version should track exactly with the revision linked above.

I’ve been involved in the debate over the CASF program, and in assisting with project proposals since 2009. I’m not a disinterested commentator. Take it for what it’s worth.

California broadband infrastructure subsidy reboot ready for CPUC vote

by Steve Blum • , , , ,

The flurry of comments and rebuttals about proposed changes to California’s primary broadband infrastructure subsidy program – the California Advanced Services Fund (CASF) – resulted in a few changes, generally for the better. A revised draft decision was published yesterday, ahead of a scheduled vote by the California Public Utilities Commission on Thursday.

Comcast’s and Charter Communications’ lobbying front organisation – the California Cable and Telecommunications Association (CCTA) – was rebuffed in its attempt to open up proposed CASF-funded projects to an eternity of challenges.

The revised draft emphasises that “there is only one opportunity to challenge a project” by demonstrating that existing service in the proposed area meets the California legislature’s pathetic minimum standard of 6 Mbps download and 1 Mbps upload speeds. That single challenge period ends five weeks after an application is submitted. CPUC staff has two weeks to post the application on the commission’s website and then incumbents have three weeks to try to kill it, if they think it threatens their monopolies. The one exception is if area is added to the proposed project during the review process, and then only the new territory is vulnerable to attack.

The revisions also put some additional streamlining in the review process, which has dragged on for more than two years in some cases. Any request for $10 million or less can be approved by staff, without having to be voted on by commissioners. The first draft had a $5 million limit. Most of the projects proposed over the past few years would have been comfortably below the new limit.

Incumbents are also opposed to a low income subscription option. The draft would subsidise an additional 10% of project costs – the baseline is 60% – if a $15 dollar a month package is offered to qualifying low income household. The cable lobbyists were joined by AT&T, Frontier Communications and a group of small rural telephone companies in objecting to it. Again, all they got for their troubles was a clearer statement of what the CPUC expects in return for giving them taxpayer money: “the low-income service offering must be offered throughout the entire project area and must meet all of the CASF performance criteria”.

At this point, a favorable vote by commissioners on Thursday is looking more likely. Yesterday, the draft was moved to Thursday’s consent agenda, which means it won’t even be debated. Assuming nothing changes (a reasonable, if not completely safe, assumption) it’ll be automatically approved along with a couple dozen other items in a single, bulk vote.

Revision 1 of proposed decision of commissioner Guzman Aceves, implementing the California Advanced Services Fund infrastructure account revised rules, 10 December 2018 (changes highlighted).

Revised appendix, 10 December 2018 (changes highlighted).

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

For more background information, click here.

I’ve been involved in the debate over the CASF program, and in assisting with project proposals since 2009. I’m not a disinterested commentator. Take it for what it’s worth.

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.

Stark contrast between PG&E, SCE decisions and SDG&E’s wildfire prevention actions

by Steve Blum • , , , ,

Sdge berg electric

Turning off electric power lines in dry, windy conditions is one way to reduce the risk of catastrophic wildfires. The California Public Utilities Commission is about to start the wheels turning on an investigation into how and when that should be done. Optimistically, the draft order instituting rulemaking predicts that it’ll be wrapped up sometime next summer.

Last summer, the CPUC allowed Pacific Gas and Electric, Southern California Edison and a handful of smaller “investor owned” electric utilities to do the same kind of proactive de-energisation that San Diego Gas and Electric has been allowed to do since 2008. It’s too early to conclude whether their subsequent efforts did any good, but the hazy picture we have now indicates that there is considerable room for improvement, by utilities and their customers:

Turning power off is relatively simple. Turning it back on is not. Lines have to be inspected first, and re-energising has to be done systematically and carefully. Even absent nimby whining, it’s not something to be done casually. But there is a clear contrast between the decisions made by PG&E and SCE ahead of the Camp and Woolsey fires, and the actions taken by SDG&E.

As governor Jerry Brown aptly put it, California’s wildfire disasters are the “new abnormal”. The CPUC should consider how best to cope with this new reality, but utilities – electric and telecoms – should not wait. It’s time to revise the playbook.

Plan to allow electric utilities to pass on 2018 wildfire costs to customers is on hold

by Steve Blum • , , , ,

Any help with wildfire liability that major electric companies might be expecting from the California legislature will wait until next month. Assemblyman Chris Holden (D – Los Angeles) didn’t introduce his planned bill when the legislature met briefly to swear in new members and open the new session. Holden had planned to, at a minimum, allow Pacific Gas and Electric and Southern California Edison to add damage costs to customers’ bills for 2018 wildfires. The legislature voted in August to allow them to pass on those costs to consumers for fires in 2017 and 2019 and beyond. But not for this year.

According to a story in the Los Angeles Times by John Myers, there’s significant opposition to offering PG&E, in particular, a helping hand….

“I’m very concerned,” Holden said. “I think there are a very fragile set of circumstances.”

Critics, however, are poised to pounce. Some believe the timing is inappropriate, so soon after the catastrophic Camp fire in Butte County. Others see the effort as tantamount to punishing utility customers — particularly those of Pacific Gas & Electric Co. — through higher bills.

“All of this conversation is premature,” said state Sen. Jerry Hill (D – San Mateo), a frequent PG&E critic. “There is a major cost to ratepayers that I think is outrageous.”

That cost will run into the billions of dollars, assuming that early indications that point to PG&E electric transmission lines as the cause of the disastrous Camp Fire in Butte County turn out to be true. The way California law works, if a utility – electric or telecoms – is even partly to blame for starting a fire, then it’s responsible for the entire cost. Earlier this year, lawmakers rejected utility requests to change that.

The legislature reconvenes in January, which is the next opportunity for Holden and Hill, who has talked about bringing PG&E’s service territory under direct state control, to move ahead with new bills.

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.

Partisan shift in Congress could influence anti-trust reviews of T-Mobile’s takeover of Sprint

by Steve Blum • , , , ,

The flip from a republican majority to a democratic one in the federal house of representatives has opened a window of opportunity for, among others, those opposed to T-Mobile’s planned takeover of Sprint. A coalition of fourteen labor organisations and a wide range of advocacy are urging the presumed incoming chairmen of the house judiciary, and energy and commerce committees to investigate the “likely effects” of the deal.

In a letter sent yesterday (h/t to a story by Harper Neidig in the Hill for the pointer), the groups reminded representatives Jerry Nadler (D – New York) and Frank Pallone (D – New Jersey) that they spoke out against the merger when democrats were the minority party, that they should follow through now that they’re in the majority…

Representative Pallone, on April 30th you and Representative Doyle wrote to Chairman Walden and Chairman Blackburn requesting a hearing on the proposed Sprint/T-Mobile merger. You correctly pointed out that due to its “primary jurisdiction over the wireless industry, [the Energy and Commerce Committee has] a responsibility to understand the potential effect of this merger on consumers, workers, and the communications market.” You added that “the merger would create a new wireless behemoth by shrinking the number of nationwide wireless providers from four to three.” You went on to say that the Committee should explore the merged entity’s foreign ownership; whether 5G deployment is helped by the proposed merger, despite the fact that both T-Mobile and Sprint have invested in 5G already; and the state of wireless competition.

We agree. We hope you will now announce your intent to schedule exactly this kind of hearing.

The groups include the Greenlining Institute and the Communications Workers of America, which are also opposing the merger at the California Public Utilities Commission.

Congress has no direct role when it comes to reviewing mergers. At the federal level, that job falls to the justice department and the Federal Communications Commission. But they do have to answer to congress, at one level or another.

Investor-owned electric utilities won’t be California’s competitive broadband hope

by Steve Blum • , , , ,

The door has officially closed on expansions of Pacific Gas and Electric’s and Southern California Edison’s telecommunications businesses. It’s a small issue compared to the wildfire disasters that both companies are grappling with, but it could have a significant and ongoing effect on California’s uncompetitive broadband services market.

At its last meeting, the California Public Utilities Commission voted to allow PG&E to withdraw its application to become a certified telecommunications company. It applied last year, hoping to make better use of the 2,600 miles of fiber optic routes it owns in northern California. It ran into the same knee-jerk reaction from so called consumer advocates, who don’t seem to realise that electric customers and broadband subscribers are the same people, as SCE did when it unsuccessfully asked for permission to streamline telecoms business requirements placed on it by the CPUC.

The CPUC’s decision rewards the efforts of the consumer groups and industry lobbyists who intervened in its review of PG&E request. The decision specifically allows them to apply for “intervenor compensation”, which has to be paid by PG&E, even though no decision was reached on the merits of the case. The decision calls their efforts a “substantial contribution” that expanded “the scope of this proceeding from the usual scope of applications for [telecom company certification]”.

They certainly did that. By making a grab for any likely profits PG&E (and SCE) might make from putting valuable dark fiber on the market and from offering other telecoms services that would offer competition to monopoly model telephone and cable companies, the intervenors and the commissioners who accepted their arguments killed the business case. It’s a victory for the lawyers and lobbyists who can now send their bills to PG&E, and for companies like AT&T, Comcast, Charter and Frontier, who would prefer to keep California’s telecoms market under their control.

It’s a defeat for everyone else.