Tag Archives: public policy

Political dreams, not business sense drive plan for public takeover of PG&E

by Steve Blum • , , , ,

Glinda the good witch

It’s not a co-op, despite being “customer owned”. It’s not a utility district or a municipal utility, despite operating “as though it were a public agency”. And it’s certainly not a profit making company. Which leaves wide open the question of what kind of organisational beast San Jose mayor Sam Liccardo and 113 other northern California elected officials think will take over Pacific Gas and Electric’s operations and assets.

The group released a set of “operating principles” for a new, quasi-public entity that would replace PG&E. Key details are missing, including where the money is coming from – bankruptcy judges aren’t in the habit of giving something away for free when others are willing to pay for it – and whether they want PG&E’s natural gas business too.

It’s an all things to all people proposition. Somehow, this new utility will have oversight responsibility for community choice aggregators, which are local governmental agencies – joint powers authorities – that buy electricity and manage customers, via PG&E, in some California cities and counties. But it will have “‘private’ entity legal status” as a “customer-owned utility”. Which makes it sound like a traditional electric cooperative, except that “excess revenues will be re-invested into the communities” it serves, and not rebated to the customers who own it, as co-ops do.

The group’s manifesto includes a long wish list of other goodies the new utility will bestow upon people and public agencies in PG&E’s service territory, such as prioritising capital investment to “prevent wildfires, reduce public safety power shutoff events, and improve overall system reliability”, and “maintaining and growing a skilled workforce” that will improve safety and reliability, as well as customer service. They seem think it’s possible to do all that, while improving “affordability” and offering “options to reduce costs for all ratepayers”.

That would be a neat trick. But it’s only possible to make those kinds of promises when the only cost involved is the price of a press release. Public ownership of monopoly utilities is worth considering, but it’ll only work if the owners – tax payers – are willing to back it financially and if the people running it focus on the tough business of delivering service.

Contract for the Web addresses virtues and vices of government intervention

by Steve Blum • , , , ,

Contract for the web

The “Contract for the Web” campaign published its manifesto last week, titled, naturally enough, Contract for the Web. It’s a declaration of nine principles, including “make the internet affordable and accessible to everyone”, “respect and protect people’s privacy and personal data to build online trust” and “develop technologies that support the best in humanity and challenge the worst”, which are among the tasks the contract assigns to private companies. Individuals are urged to “be creators and collaborators on the web”, “build strong communities that respect civil discourse and human dignity”, and “fight for the web”.

The Contract was written by a wide range of companies and organisations, ranging from Google to Change.org to the German government, and the effort is led by Sir Tim Berners-Lee, the inventor of the World Wide Web. Even so, it’s been criticised for having no teeth. The likes of Facebook, Twitter and Microsoft have signed on to it, there’s no guarantee that they’ll pay any attention to it.

True enough. There’s more to it, though.

The Contract opens with a clear call for government enforcement, and even intervention. The first three principles state that governments will…

  1. Ensure everyone can connect to the internet.
  2. Keep all of the internet available, all of the time.
  3. Respect and protect people’s fundamental online privacy and data rights.

Simply stating that a government – any government – should do something is of little consequence. But as governments adopt the Contract, in whole or in part, over time, it’ll grow teeth. And governments and subordinate agencies are doing that.

The details of the privacy principle track with the European Union’s general data protection regulation. Tasks to “ensure everyone can connect to the internet” include measures that local governments in California have already adopted, such as “dig once” policies and pole access agreements.

Regulatory agencies are in the game, too. For example, the Contract sets the goal that “1GB of mobile data costs no more than 2% of average monthly income by 2025”. The California Public Utilities Commission is considering affordability standards for broadband and other utilities that are heading in the same direction.

Government is far from being a universally benign force in the world, though, and the Contract recognises that fact too, for example calling for requirements that…

Government demands for access to private communications and data are necessary and proportionate to the aim pursued, lawful and subject to due process, comply with international human rights norms, and do not require service providers or data processors to weaken or undermine the security of their products and services.

That’s a message that the U.S. government needs to hear.

Video entertainment “should not be considered essential” says AT&T. Amen say Comcast, Charter

by Steve Blum • , , , ,

Darth leia 625

For a company that paid $85 billion to become a video entertainment giant, AT&T has an odd idea of what’s essential and what’s not. In objections to a California Public Utilities Commission staff proposal, AT&T argued that “video entertainment” should play no role in determining what level of broadband service is “essential” and whether it’s affordable or not. It specifically targeted Netflix and ESPN+ as examples of non-essential services that are not “appropriate essential functions” and should not be included in calculations of what level of broadband speeds and data caps are necessary for Californians to conduct their every day lives.

In reply comments, the lobbying front organisation that Comcast, Charter Communications and other cable companies use to push their interests in Sacramento and at the CPUC endorsed AT&T’s position, paraphrasing it as “entertainment service such as Netflix is not essential”. It’s easy for the California Cable and Telecommunications Association to trash talk Netflix; the Walt Disney Company – ESPN’s majority owner – not so much.

AT&T and its amen corner got it wrong, for at least a couple of reasons. First, the CPUC staff white paper in question identified fixed broadband service at 20 Mbps download and 3 Mbps upload speeds as the minimum necessary for a Californian household to meet its “basic needs” such as education, telehealth and safety, and enjoy “full participation in society” by doing such things as “completing job applications and accessing government assistance programs”. Netflix and ESPN aren’t on the list. Neither is HBO Max, which AT&T is hoping will pull it out of the video subscriber death spiral it’s in, or Spectrum TV Essentials or Xfinity Instant TV. Calling out entertainment services is a red herring.

It’s also arrogant.

I’ve sat in many meetings in Sacramento and listened to telco and cable lobbyists speak with contempt about people who are misguided enough to think they ought to be able to watch video via the Internet, if they don’t provide sufficient profit to be worth it to those companies to deliver modern broadband service. Full participation in society requires more than just getting email or reading a web page. It includes access to the full range of online information and social and political interaction that’s available – and essential – to those of us who are fortunate enough to have it.

Collected documents from the CPUC’s investigation into essential service and affordability metrics for utilities are here.

“Framework” for telecoms competition in rural telco territories considered by CPUC

by Steve Blum • , , , ,

Tesoro viejo 2

A rousing and thoroughly disingenuous defence of telecommunications competition doesn’t appear to be enough for Comcast to get permission right now to cherry pick affluent households in Ponderosa Telephone Company’s territory. A pair of California Public Utilities Commission administrative law judges (ALJs) said in a ruling last Friday that even though allowing competitive telecoms companies into the protected service areas of California’s small, rural telcos should be considered on a case by case basis, those decisions should be made within a common framework.

The two ALJs – Mary McKenzie and Hazlyn Fortune – are managing what the CPUC calls a rulemaking proceeding that’s looking at the way California subsidises, and consequently protects, small telephone companies that serve remote and sparse rural communities that aren’t lucrative enough to attract big telecoms service providers. Or at least used to be. As California’s suburbs spread further out from cities, new developments are springing up on farm and ranch land that’s served by rural telcos.

Citing Comcast’s case as an example, they decided that the next step in that process is to establish a general set of rules that will guide future decisions about who should provide telephone service and, in some cases, broadband service in those new communities…

The Commission will first consider adopting general criteria in this Rulemaking as a framework for allowing competition, which will then be evaluated on a case-by-case basis considering local conditions for each individual small [rural telco] service territory where an application is filed by a potential competitive local exchange carrier (CLEC) seeking a certificate of public convenience and necessity (CPCN).

Comcast’s request to be allowed to provide telephone service in the upscale Tesoro Viejo development north of Fresno is being handled by another ALJ, Zhen Zhang, in a separate case. In theory, Zhang doesn’t have to wait for McKenzie and Fortune to finish their work, which could take months. In practice, since ALJ’s produce draft decisions for consideration by CPUC commissioners, it would probably be a waste of time to, as Ponderosa described it, put “the cart before the horse”.

Frontier digs a deeper digital divide in rural California with taxpayers’ shovel

by Steve Blum • , , , ,

Frontier verizon pole santa barbara county 10oct2015

A handful of rural communities in Lassen, Modoc and Kern counties will get their first taste of wireline broadband service from Frontier Communications if the California Public Utilities Commission approves infrastructure construction grants next month.

Unfortunately, it’s just a taste.

Frontier’s (and AT&T’s) strategy, as identified by a CPUC study earlier this year, of “disinvesting in infrastructure overall”, which is “most pronounced in the more rural and low-income service areas”, continues to be business as usual. Both of Frontier’s projects up for California Advanced Services Fund grants propose to deliver low speed service over ageing copper telephone lines. The $11 million would be spend on a desperately needed 137 mile fiber route and essential central office equipment upgrades, but Frontier’s interest in improving rural infrastructure, even when taxpayers are picking up the tab, ends there. As the CPUC’s draft resolution approving the Kern County grant describes the project, “Frontier will upgrade the existing communications facilities to increase broadband capacity but will not replace the copper cable infrastructure”. Likewise, the northeastern California project adds middle fiber and electronic equipment, but leaves “legacy copper infrastructure” in place.

It’s not an accident or anomaly. It’s deliberate.

Frontier continues to bleed customers and revenue, and selective fiber upgrades are the solution, according to CEO Dan McCarthy, who spoke about the company’s third quarter 2019 financial results

We achieved a sequential improvement in fiber net losses with only 1,000 in the third quarter. However, consumer copper losses of 52,000 were worse than the second quarter. In copper, although we experienced a sequential increase in gross additions, this was offset by a sequential increase in churn and we continue to manage this business for a decline. Fiber broadband gross additions increased sequentially in the third quarter and we also had a slight sequential improvement in fiber broadband churn. With the completion of the upgrades of the fiber network to be 10 gigabit capable, we have increased our emphasis on selling at higher speed tiers.

Frontier’s strategy is economically rational, and is probably its best shot at pulling shareholder value out of penny stock territory. What makes it rational, though, is the California legislature’s irrational (but well compensated) decision to subsidise 1990s era broadband service over 1890s era copper wires, and not hold incumbent telcos to the same standards in rural communities as they voluntarily and rationally adopt in densely populated, high income cities and suburbs.

CPUC commissioner asserts “a significant role” over broadband affordability and essential service

by Steve Blum • , , , ,

Rechtschaffen 2 20may2019

In a ruling issued on Friday, CPUC commissioner Clifford Rechtschaffen ended any doubt over whether an inquiry into the affordability of utility services includes the cost and quality of broadband access: it does. The decision puts wind in the sails of an analysis of broadband pricing and service speeds prepared by California Public Utilities Commission staff, and meets strident objections from AT&T, Comcast, Charter Communications and other monopoly model incumbents head on…

This amended scoping memo confirms that communications services, such as broadband internet access, are included within the scope of this proceeding. This amended scoping memo finds that [California Public Utilities] Code Sections 709, 280, 281, 275.6, and the Moore Act all demonstrate that the Legislature contemplated a significant role for the Commission in closing the digital divide in California and bringing advanced communications services, including broadband internet access, to all Californians. This proceeding may assist in that goal.

The California Cable and Telecommunications Association, which is a Sacramento lobbying front organisation for Comcast, Charter and other cable companies, argued that the CPUC shouldn’t look into the affordability of broadband service because it is “an interstate service governed by federal law, and defined as an “information service” and not a “telecommunications service”. In reply comments, AT&T agreed, saying “broadband is not a public utility service”. A joint filing by small rural telephone companies said much the same thing.

Unfortunately for them, the primary legal basis for their objections – the Federal Communications Commission’s blanket preemption of state broadband regulations was overturned by a federal appeals court. So long as the FCC says that broadband is an information service, it can’t wield its telecommunications authority as a magic weed whacker to chop down state regulations.

In his ruling, Rechtschaffen also set next June as the deadline for CPUC action on affordability and service standards for broadband and other utilities, including electricity, water, gas and voice services.

Collected documents from the CPUC’s investigation into essential service and affordability metrics for utilities are here.

Privacy is too complicated for California to understand, mobile industry panel says

by Steve Blum • , , , ,

Flashers

California’s consumer data privacy law will be the default privacy standard across the U.S., at least for the coming year, and that’s upsetting the Washington, D.C. crowd. A panel discussion on privacy legislation at the Mobile World Congress trade show in Los Angeles last week featured three industry lobbyists, the head of an industry front organisation and a Federal Trade Commission lawyer. All of them are based in D.C., and shared Beltway-centric advice on who should be calling the shots.

The panel was dismissive of state lawmakers’ ability to deal with the complexities of issues that lobbyists and federal regulators have been dancing with since at least 2012, when the FTC published a lengthy set of consumer privacy protection recommendations. Michelle Rosenthal, a former FTC lawyer who left through D.C.’s revolving door and is now a staff lobbyist for T-Mobile, worked on that report and praised its sophistication and subtlety – they even used a whiteboard!

On the other hand, CCPA “was drafted very quickly and passed very quickly”, Rosenthal said. “A lot of the state legislation – which I won’t get into – you know, unfortunately happened so quickly that that process isn’t a thing”.

The discussion would have been better informed if organisers invited someone from, say, California or Nevada who could explain what their thing is. Electronic privacy has long been a policy issue in California, but Sacramento lawmakers didn’t “jump in” until federal regulators tore up their own rules. Even so, the first attempt to pass a Californian privacy law was shot down by the same big telecoms and tech companies that have been so helpful in D.C.

The panel members offered a not-so-surprising consensus on three points:

  • The federal government should set consumer privacy rules because everything will be complicated and everyone will be confused if state legislatures do it.
  • Congress isn’t going to do anything about it this year, and next year isn’t looking good either.
  • The California Consumer Privacy Act (CCPA), which takes effect in January, will be the de facto privacy rulebook for the rest of the country, at least until something even tougher comes along. Which could easily happen, because other states, including Nevada and Maine, are in the game now.

CCPA “in effect, could become, sort of, the law of the land as it becomes implemented”, said Melanie Tiano, privacy and cybersecurity director for CTIA, the mobile industry’s D.C. lobbying group (and a co-sponsor of the show).

“Firms just ratchet up to the highest standard, and that’s sort of the general rule of thumb, and that seems manageable”, said Jared Ho, an FTC privacy attorney. “It seems like one of the greatest concerns is going to be potential conflict”.

Privacy panel mwc la 2019 23oct2019

FCC chair Pai makes the case for rural 5G and basic broadband infrastructure subsidies

by Steve Blum • , , , ,

Pai mwc la 2019 22oct2019

Ajit Pai was at his geeky best yesterday as he played the big room at the Mobile World Congress trade show in Los Angeles. The Federal Communications Commission chair focused on topics he knows well – spectrum, network security, infrastructure deployment, service access – and mostly steered clear of weaknesses that have rightly drawn down a deluge of criticism on him: local government operations, common carrier/net neutrality policy and a taste for industry cheerleading.

Pai touted the FCC’s “5G Fast Plan”, which includes opening up more spectrum for mobile broadband use, building fiber backhaul and, more controversially, preempting local and state control over public right of ways and the assets they install, and own, there. He said his highest priority is closing the digital divide, particularly in rural areas, a job he compared to the federal rural electrification program that began 80 years ago…

I didn’t underestimate, by the way, the impact that 5G could have in some of these rural areas. This often one of the questions I get – ‘well, isn’t it just simply a densely populated urban use case?’ That is not the case at all…When you think about what farms and ranches are, it’s not simply the tangible things you can see, like corn, and soybean and wheat growing. These are essentially huge amounts of data that need to be uploaded into the cloud, analysed quickly and then the services that you need, to be deployed at scale. Similarly, I visited a farm recently in North Dakota…where we visited a corn farm that’s using connected combines to analyse virtually every single square yard…to analyse everything from the fertiliser that needs to be deployed on that square yard, the yield that they got this year compared to last year. All of that is going to require high bandwidth, symmetric service. I think that’s a particular 5G use case that’s going to be really compelling.

Pai said that the “$20 billion” Rural Digital Opportunity Fund, which the FCC is spinning up to replace the Connect America Fund program, will “create some of the hard infrastructure” to support 5G development in rural areas, such as “the fiber infrastructure that’s needed for backhaul”.

He’s right about all of that. 5G-class wireless connectivity can have huge benefits for agriculture and rural communities. The question remains, though, will it even happen? To date, the FCC’s rural broadband subsidies have mostly been spent on slow, outdated DSL technology, and not on modern broadband infrastructure. That needs to change.

Study spots “third wave” of community broadband enthusiasm, but no swell of cash

by Steve Blum • , , ,

Wipeout

A “third wave” of community broadband initiatives is developing in the United States, but before it’s surfable, state and federal policy changes are needed. That’s the conclusion of a paper written by Sharon Strover, Martin Riedl and Selena Dickey, of the University of Texas at Austin.

They identify barriers deliberately created by lobbyists working for major incumbents and their capture of policy making machinery – such as the Federal Communication Commission’s industry-dominated broadband deployment advisory committee which offered legislative recommendations that would “eliminate municipal broadband”. But they also see community and corporate trends that are pushing against monopoly business models…

We see potential for community network development in the United States, acknowledging existing projects but also an abundance of obstacles. Their presence and growth testifies to the need for alternative regulatory arrangements…

New connectivity models in the space of community networks, innovation in terms of open source hardware, newly opened spectrum such as TV white spaces, as well as investments through private corporations into connectivity efforts such as terragraph (Facebook) and satellite internet (Facebook, Google, others), all foment this third wave of community networking efforts, but can only succeed in the long run if they are simultaneously accompanied by supportive federal and state policies. In the broad scheme of things, this calls for an end to protectionist legislation curtailing the opportunities to experiment and to offer services that communities themselves believe are more efficient, less costly and more attuned to their needs.

Strover, Riedl and Dickey are correct in calling for open and creative use of public money earmarked for educational and medical networks, greater flexibility in federal programs and more widely available state and local subsidies “to various types of providers”.

That’s a good start toward solving the critical problem that community, and particularly municipal, initiatives face: paying for building a network and for operating deficits that might last far longer than advocates generally care to contemplate. But it’s only a partial solution. Consumers and businesses also have to embrace the reality that better infrastructure and service comes at a price, and universal infrastructure and service comes at a universal price. There’s a point where someone else’s money becomes everyone’s money.

TANSTAAFL.

Scoping New Policy Frameworks for Local Broadband Networks, Strover, Riedl and Dickey.

Draft rules for businesses add enforcement detail to California’s consumer privacy law

by Steve Blum • , , ,

Gagged by privacy

California’s tough consumer privacy law technically takes effect in January, but enforcement won’t begin until next July. The California attorney general has the job of writing the detailed rules that businesses will have to follow, and then enforcing those rules.

The first draft of those new rules was posted for public review and comment. They apply to businesses with more than $25 million in “annual gross revenues”, or collects or deals in “the personal information of 50,000 or more consumers, households, or devices”, or that deal in people’s personal information for a living.

Such businesses have to let customers know what kinds of information they’re collecting, and give them an easy way to opt out of any sale of their info to third parties. The California Consumer Privacy Act was designed with online businesses in mind – the default assumption is that businesses will post notices and receive opt out orders via their websites – but it applies equally to companies that have no online presence at all, or that only interact with customers in person. The draft rules cover those situations, too.

There are separate and stricter rules about gathering information from children and teens.

Opting out is not supposed to result in higher prices for consumers, unless a discount offered in exchange for permission to sell is “reasonably related to the value of the consumer’s data”. Otherwise, discounts have to be available on a non-discriminatory basis to all customers. The draft doesn’t provide a lot of guidance as to what’s discriminatory and what’s not, but it does offer a couple of examples, such as…

A music streaming business offers a free service and a premium service that costs $5 per month. If only the consumers who pay for the music streaming service are allowed to opt-out of the sale of their personal information, then the practice is discriminatory, unless the $5 per month payment is reasonably related to the value of the consumer’s data to the business.

Public hearings are scheduled around California to get input on the draft, and written comments can be submitted by the 6 December 2019 deadline.

California Department of Justice CCPA documents:
Proposed Text, California Consumer Privacy Act Regulations, 11 October 2019
Initial Statement Of Reasons, Proposed Adoption of California Consumer Privacy Act Regulations, 11 October 2019
Notice of Proposed Rulemaking Action, California Consumer Privacy Act, 11 Oct 2019
Economic and Fiscal Impact Statement, California Consumer Privacy Act Regulations, 14 August 2019
Standardised Regulatory Impact Assessment, California Consumer Privacy Act of 2018 Regulations, 14 August 2019