The dispute centers on Tesoro Viejo, an upscale master planned community under construction in the foothills of Madera County. Comcast claims the developers offered Tesoro Viejo as a cherry ripe for picking, and it wants to oblige them. There’s nothing preventing Comcast from providing video and broadband service, but if it wants to bundle in telephone service and offer the full triple play, it needs the CPUC’s permission.
That’s because Ponderosa Telephone serves the foothills of Madera and Fresno counties, as well as more remote communities further up in the Sierra Nevada. It’s one of ten small, highly subsidised telephone companies that serve deeply rural areas of California, the edges of which are now right in the path of exurban development. The CPUC protects those rural telcos from competition in an effort to minimise the amount of taxpayer dollars it takes to keep them afloat.
That policy is under review, but Comcast doesn’t want to wait. Ponderosa, on the other hand, doesn’t want to be nibbled to death. It argues that top level policy has to be decided first “because competition raises public policy questions with a collective impact on stakeholders throughout the state”.
It’s a tough question. Comcast is an unlikely champion. It moves quickly to kill potential competition whenever its territory is threatened. But regardless of how disingenuous it’s being, Comcast is correct in saying that more choice brings greater benefits to consumers. Once its process is complete, the CPUC might trim, or even eliminate, the privileges that rural telcos enjoy.
That’s a decision that needs to be taken deliberately and with the full consequences for all – rural residents, exurban immigrants, California taxpayers – in mind. Doing it reactively in response to rich targets of opportunity is a disservice to everyone.
A federal appeals court commissioner has, for now, set a schedule that sorts out the various challenges to last year’s Federal Communications Commission decisions that preempted local ownership of streetlights and similar infrastructure, and put tight restrictions on how local governments manage public right of ways. Last week Peter Shaw, a commissioner for the ninth circuit federal appeals court in San Francisco, met with attorneys for local agencies and associations that are challenging various aspects of the order, and with lawyers for mobile carriers that are pretending to be upset with the FCC’s decisions, but are actually jumping in on its side.
The result is a schedule that has the final round of written arguments completed in September, which could lead to a decision in 2020.
If the San Francisco appeals court judges allow the cases to move ahead at all. They still have to decide if they’re going to grant the FCC’s request to put everything on hold until the commission gets around to closing out its proceeding.
Some of the Small Cell Appeals were filed by local governments and publicly-owned utilities (the public petitioners), and separate appeals were filed by various providers of wireless services (industry petitioners). Their positions are in opposition, and industry petitioners, as well as certain intervenors, will support the FCC in opposing the public petitioners, and vice versa.
It makes for good headlines for a slow Friday at the white house, but so far that’s about all that’s resulted from a $20 billion pledge to support rural broadband development. Federal Communications Commission chair Ajit Pai joined president Donald Trump to hype 5G plans and spectrum auctions, and tossed in a new rural broadband initiative at the end.
Pai’s “Rural Digital Opportunity Fund” is just the next reboot of the long standing Connect America Fund (CAF) subsidy program, that similarly poured billions of dollars into rural broadband projects, according to a story by Jon Brodkin in Ars Technica…
The new program will be part of the Universal Service Fund (USF), and it will be similar to an existing USF program that began during the Obama administration. In 2015, the USF’s Connect America Fund (CAF) awarded $9 billion for rural broadband deployment—$1.5 billion annually for six years—in order to connect 3.6 million homes and businesses…
At $2 billion a year over ten years, the fund will provide more money each year over a longer period of time than the CAF program it would replace…
In an email to reporters, Pai’s office said the Rural Digital Opportunity Fund will “provide up to gigabit-speed broadband in the parts of the country most in need of connectivity.”
Arguably, CAF caused many of the problems that Pai now says he wants to solve. The program was custom designed to funnel taxpayer money to big, incumbent telephone companies, who, in return, promised to deploy slow speed, low capacity service – 10 Mbps download and 1 Mbps upload speeds, often via bandwidth-limited fixed wireless systems – by the end of next year.
There’s no indication that the FCC’s telco-centric approach will change, or that subsidised rural broadband service will be significantly better than what’s been deployed in the past. There are tight restrictions on how USF money can be spent and who can get it. The game was rigged by telecoms companies a long time ago and the problem is only getting worse.
A network neutrality bill cleared the democrat-controlled U.S. house of representatives yesterday and is on its way to the U.S. senate, where republican leader Mitch McConnell has been widely quoted as saying it’s “dead on arrival”. The vote in the house was “mostly along party lines”, with only republican – Bill Posey (R – Florida) – joining democrats, according to The Hill.
The text of the bill hasn’t been posted yet. The first draft simply reinstated the Obama-era net neutrality rules and blocked the Federal Communications Commission from making any changes. A later amendment gave smaller Internet service providers – those with fewer than 100,000 customers – an extra year to comply with some of the terms.
One amendment does give us pause, though. The last amendment to the bill (McAdams), affirms a bit from the old Open Internet Order, saying that the net neutrality prohibition on blocking doesn’t prevent ISPs from blocking “illegal” content, a distinction that includes copyrighted material…A broad reading of this amendment could easily have greenlit Comcast’s throttling of Bit Torrent, which led to a past FCC sanctioning the cable company for violating net neutrality…
As ISPs and media companies become even more intertwined, it’s easy to imagine this loophole being exploited. However, legislative debate..made clear that this amendment did not give an ISP the right to censor content solely because the ISP thought the content was unlawful.
It’ll take more than one renegade republican in the senate to prove McConnell wrong. But it’s happened before. Shorty before the current FCC rules took effect last year, three republican jumped ship and voted for a resolution of disapproval. It could have reversed the FCC’s decision, but didn’t go anywhere in the then-republican majority house.
Colorado is about to have a network neutrality law that has teeth and a chance of surviving federal court challenges. Senate bill 78, which was just passed by the Colorado legislature, says that Internet service providers that don’t abide by net neutrality principles can’t get state broadband deployment subsidies, and might even have to return money previously awarded if they’re caught violating those rules in the future.
It’s a partisan issue. All republicans in both the Colorado house and senate voted against it; all democrats voted for it. The bill is on its way to Colorado governor Jared Polis for his signature. He’s a democrat too, so no points for guessing what he’s probably going to do with it.
Colorado ISPs will have to disclose their network management policies, and can’t block or throttle subscriber’s Internet traffic, or engage in paid prioritisation. Unlike Comcast and some other ISPs that say they’re against paid prioritisation, but spin it so narrowly that their pledges become meaningless, Colorado’s SB 78 has a reasonably robust definition of it…
“Paid prioritization” means the management of an Internet service provider’s network to directly or indirectly favor some traffic over other traffic, including through the use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either: (i) in exchange for consideration, monetary or otherwise, from a third party; (ii) to benefit an affiliated entity; or (iii) to disadvantage a competing entity or its affiliates.
Last year, the Colorado legislature set up a broadband deployment subsidy program that’s heavily biased in favor of incumbents, although it also allows for the possibility of municipal project funding in smaller communities. It tracks with old school universal telephone service programs, so the biggest impact of the bill will be on incumbent telcos. CenturyLink is the big one, and there are some smaller rural telcos too.
The California Public Utilities Commission won’t jump the gun and give Comcast permission to compete directly with the Ponderosa Telephone Company. At least not yet. Comcast has to first explain why past CPUC decisions don’t apply to its request for permission to offer telephone service in Tesoro Viejo, an upscale master planned community of 5,200 homes in Madera County. Among other things, those rules protect highly subsidised rural telephone companies from competitors that want to cherry pick affluent customers in densely populated exurban developments, and ignore people in poorer and more sparsely populated communities.
The CPUC has been thinking about changing those rules for the past twelve years, with no decision yet on the horizon. It’s the normal course of business for the commission, which considers these kinds of issues in excruciating detail via an adversarial process that includes anyone with an interest in the outcome. It doesn’t happen quickly.
In a ruling last week, commissioner Liane Randolph rejected Comcast’s request for an immediate exception to current policy, saying that questions about why those rules do or don’t apply have to be answered first. That means considering a study of rural broadband and telephone competition completed last year, and a 2014 CPUC decision that concluded that companies like Comcast…
…may tend to serve only small portions of any of the [rural telco] service areas with high quality, high reliable voice service and…may be likely to “cherry pick” business customers rather than serve significant portions of rural service territories, particularly customers whose cost to serve is high.
That’s exactly what Comcast proposes to do in Madera County. It’s been clear that its ambitions are limited to the newly built homes, and that it does not plan to offer service to homes and businesses in the surrounding area. Ponderosa’s service territory includes traditional foothill ranch lands and remote Sierra Nevada towns, as well as new and wealthier exurbs.
Comcast and Ponderosa have two weeks to answer Randolph’s questions.
The privacy practices of four major broadband service providers and one big disruptor are getting a hard look from the Federal Trade Commission. Comcast, AT&T, Verizon, T-Mobile and Google Fiber were given 45 days to produce detailed information about their business practices and subscribers, with particular emphasis on how they collect information about customers, whether it’s done with genuine permission, and what they do with it.
The information demanded by the FTC includes statistics on how many people actually read privacy policies, along with what promises to be a tall stack of those policies – every single one that’s been written by the companies, including copies that might be “different from the original because of notations on the copy”.
One particular concern of the FTC is whether the companies treat customers differently based on the degree of privacy they’re willing to surrender…
Has the Company ever offered different levels of service, quality of service, rates, pricing, rewards, or other incentives for consumers who opt-in to the collection of information about themselves, their Devices, their communications, their viewing history, or their online activities? If so, Describe in Detail such practices and produce Each materially different notice provided to consumers concerning the practice…
Has the Company ever denied service, or otherwise degraded the quality of service, for consumers who fail to opt-in to the collection of information about themselves, their Devices, their communications, their viewing history, or their online activities, beyond information that is necessary for the provision of Internet or cable services? If so, Describe in Detail such practices and produce Each materially different notice provided to consumers concerning the practice.
AT&T and Verizon will have to produce information about both their wireline and mobile subsidiaries. It’s probably a good assumption that Comcast will have to submit data about its wireless business practices too. One company that’s notably absent from the list is Charter Communications, which has nearly as big a market share as Comcast. Sprint is missing too, but it’s the smallest of the major mobile carriers and might not be around much longer anyway.
Intentional or not, the FTC’s fishing – whaling – expedition is a welcome response to a damning assessment by the federal general accounting office assessment that the agency is largely clueless about the online world.
In a landmark decision, the California Supreme Court gave cities a major victory today, ruling that the way San Francisco regulates the appearance of wireless facilities is legal, and isn’t preempted by state law or California Public Utilities Commission regulations. Its interpretation goes beyond lower court decisions and adopts a narrower view of state-level restrictions on municipal control of telecommunications infrastructure. The unanimous opinion also opened the door to further regulation of cell sites and other telecoms facilities – wired or wireless – by drawing a line between specific limits the legislature put on local oversight of construction activities, and the general ability of cities to set standards for the appearance, placement and, potentially, other aspects of wireless equipment after it’s built.
Today’s California Supreme Court decision endorsed that finding…
Neither the plain language of [public utilities code] section 7901 nor the manner in which it has been interpreted by courts and the PUC supports plaintiffs’ argument that the Legislature intended to preempt local regulation based on aesthetic considerations. The statute and the ordinance can operate in harmony. Section 7901 ensures that telephone companies are not required to obtain a local franchise, while the [San Francisco] Ordinance ensures that lines and equipment will not unreasonably incommode public road use.
But municipal authority goes beyond that, according to the Supreme Court. The ruling said that state law only restricts some of the broad discretion and power that cities have under the California constitution. Cities can’t effectively prohibit telecoms companies from building infrastructure or regulate their operations, but…
The Legislature has not adopted a comprehensive regulatory scheme. Instead, it has taken the limited step of guaranteeing that telephone corporations need not secure a local franchise to operate in the state or to construct local lines and equipment. Moreover, the statute leaves room for additional local action and there are significant local interests relating to road use that may vary by jurisdiction.
Nor does the authority given to the CPUC override local control or responsibilities. The commission regulates “a utility’s relations with its customers”, the decision says, but municipalities “are forbidden from yielding to the PUC their police powers to protect the public from the adverse impacts of utilities operations”…
Consistent with these statutes, the PUC’s default policy is one of deference to municipalities in matters concerning the design and location of wireless facilities. In a 1996 opinion adopting the general order governing wireless facility construction, the PUC states the general order “recognize[s] that primary authority regarding cell siting issues should continue to be deferred to local authorities… . The [PUC’s] role continues to be that of the agency of last resort, intervening only when a utility contends that local actions impede statewide goals … .” The order itself “acknowledges that local citizens and local government are often in a better position than the [PUC] to measure local impact and to identify alternative sites. Accordingly, the [PUC] will generally defer to local governments to regulate the location and design of cell sites … .”
Finally, the Supreme Court said that public utilities code section 7901.1, which puts specific limits on local control of the public right of way, only applies while construction work is going on…
It is eminently reasonable that a local government may: (1) control the time, place, and manner of temporary access to public roads during construction of equipment facilities; and (2) regulate other, longer term impacts that might incommode public road use under section 7901. Thus, we hold that section 7901.1 only applies to temporary access during construction and installation of telephone lines and equipment. Because the City treats all entities similarly in that regard, there is no section 7901.1 violation.
In other words, the requirement that all telecoms companies be treated that same only applies while facilities are being installed. Cities are free to adopt wireless-specific ordinances that apply after construction work is completed.
Bottom line: California cities can set aesthetic standards for cell sites, and have more authority over wireless and wireline infrastructure than they or telecoms companies thought. It’s a comprehensive defeat for T-Mobile, Crown Castle and Extenet, who sued the City and County of San Francisco. They’ll even have to pay San Francisco legal costs.
Although the ruling opens the door to further local regulation of wireless facilities, including stricter aesthetic standards, the extent of that discretion wasn’t defined, and there are still federal preemptions of state and local authority that could apply. But today’s decision gives California cities a green light to test those limits.
My clients are mostly California cities, all of whom are directly affected by this case. I’m not a disinterested commentator. Take it for what it’s worth.
San Franciso’s aesthetic standards for cell sites are legal under California law. The California Supreme Court rejected an appeal by T-Mobile, Crown Castle and Extenet of lower court rulings that allowed the City and County of San Francisco to regulate the appearance of cell sites. The ruling, posted minutes ago, is here. The ruling is broader than the lower courts’ opinions, though, and appears to expand the scope for local governments to control the use of public right of ways and issue permits for wireless facilities. More to come…
The California Supreme Court is about to rule on whether California law allows cities to regulate the appearance of cell sites. It posted a notice earlier today that a decision will be published at 10am tomorrow (Thursday, 4 April 2019). Background on the case is here. The key question: does mobile infrastructure that offends local aesthetic sensibilities “incommode the public use” of the public right of way? A California appeals court said yes, it does. T-Mobile, Crown Castle and Extenet beg to differ. We’ll get the final California word tomorrow. Stay tuned.