Tag Archives: public policy

Muni broadband, net neutrality get bland nods in Biden’s peace treaty with Sanders

by Steve Blum • , , , ,

Sanders biden

Joe Biden’s campaign agreed to a skeletal broadband policy in what amounts to a peace treaty with Bernie Sanders and his supporters. The “unity task force recommendations” published on Wednesday amount to little more than a declaration that broadband is good, but it’s the first time that Biden has explicitly signed on to any conventional democratic party positions on telecommunications policy.

The document has the usual nice words about broadband being essential to life in the 21st century, with the standard nod to education. It makes a constitutionally dubious pledge to remove state bans on municipal broadband projects and to spend money on all types of infrastructure, including, particularly, muni broadband.

Network neutrality gets a mention. The “recommendations” propose to…

Restore the FCC’s clear authority to take strong enforcement action against broadband providers who violate net neutrality principles through blocking, throttling, paid prioritization, or other measures that create artificial scarcity and raise consumer prices for this vital service.

Presumably, what they really mean is that Biden will appoint FCC commissioners who will use the “clear authority” that already exists. Which means policy ping pong will continue. During the Obama administration, the democratic majority on the Federal Communications Commission classified broadband as a regulated common carrier service. The Trump administration’s republican led FCC said it wasn’t.

The recommendations don’t explicitly promise to restore broadband’s common carrier status. There are other ways of imposing net neutrality obligations on Internet service providers, as California discovered. Initially, the Obama era FCC proposed a no lobbyist left behind approach that would have allowed monopoly model incumbents to negotiate permission for decidedly non-neutral network management practices.

Direct intervention by the Obama white house put an end to that pretence. Whether a Biden administration would do the same is an open question. Biden has enjoyed a long and comfortable political career in a system fuelled by, and largely subservient to, cash from corporations and labor unions. The peace treaty with Sanders doesn’t change that reality.

Democrats in D.C. and Sacramento in sync on fast fiber for broadband. So far

by Steve Blum • , , ,

Sunesys build freedom blvd 625

If you can’t get high quality broadband service with at least 25 Mbps download and upload speeds, then you’re unserved according to a $1.5 trillion infrastructure bill passed on a partisan vote by democrats in the federal house of representatives. $80 billion of that money is set aside for broadband service upgrades, with symmetrical 100 Mbps service considered the minimum acceptable and preference given to subsidised projects that deliver 1 Gbps down and up.

Unlike California, republicans matter in D.C. Senate majority leader Mitch McConnell (R – Kentucky) scoffed at the house infrastructure bill, saying “naturally this nonsense is not going anywhere”. That doesn’t take meaningful broadband subsidies off the table, though. With unemployment at historic levels in an election year, a big, job-creating infrastructure bill will be popular on both sides of the aisle.

The 25 Mbps down/up eligibility standard and the 100 Mbps down/up construction standard track with a bill that’s moving through the California legislature. Senate bill 1130 doesn’t go quite that far – symmetrical 100 Mbps infrastructure is a goal, not a requirement – but even with the weasel words it’s a quantum leap from California’s pitiful 6 Mbps down/1 Mbps up minimum. It’s the difference between 1990s DSL and 2020s fiber.

So far, California democrats have stayed in sync with their Washington, D.C. colleagues. All California senate democrats voted in favor of SB 1130, along with a lone republican. The bill was sent over to the assembly and is on track for a hearing in the communications and conveyances committee.

The big question is whether democrats on the committee – 10 out of 12 members – follow the party line or channel their inner GOP animal spirits, as they have on broadband subsidies and network neutrality in the past. The committee was scheduled to consider SB 1130 next week, but it’s on indefinite hold now, with the legislature shut down until further notice because of a covid–19 outbreak in the capitol.

Consumer service versus taxpayer costs: CPUC considers opening rural telco territory to competition

by Steve Blum • , , ,

Tesoro viejo construction 25aug2019

Small telephone companies that serve rural Californians will face direct competition from cable operators and other wireline telecoms companies if the California Public Utilities Commission approves a draft decision posted for review on Monday. Authored by commissioner Martha Guzman Aceves, the proposed new rules would allow competitive local exchange carriers (CLECs) to provide voice telephone service in territories that are reserved exclusively for heavily subsidised, small local exchange carriers (Small LECs).

Acknowledging that “wireline competition must be allowed in the service territories of the Small LECs as a matter of law”, the draft tries to balance the benefits of competition to consumers with the potential cost to taxpayers if cable companies skim off profitable neighborhoods, leaving Small LECs increasingly dependent on universal service subsidies to serve the rest.

To gain permission to enter protected territories, CLECs would “be required to serve customers requesting wireline voice service within their self-designated service territories on a non-discriminatory basis”, regardless of how difficult that might be. The proposed decision strikes an old rule that limits that obligation to customers within 300 feet of a CLEC’s existing facilities.

“Cream skimming” would be banned. CLECs wouldn’t be able to draw service boundaries to suit profit-maximising business models. The proposed decision directs that…

A CLEC shall avoid designing a discriminatory self-designated service territory by ensuring that the self-designated service territory represents the demographics of the Small LEC territory it is entering by making a good-faith effort to serve a proportional number of residential to commercial customers, and a proportional number of low-income and non-low-income customers…[to] guard against only sub-sets of wealthy customers being served by the CLEC.

Comcast, for example, wouldn’t be able to cut a deal in a new, upscale development, as it did near Fresno, while ignoring less profitable lower income rural customers in the surrounding area.

CLECs would also have to accept all emergency preparedness obligations that the CPUC has in the pipeline, and meet whatever “location-specific” requirements are imposed on a case by case basis. None of it makes cable companies happy – they’ve paid a lot of money to a lot of politicians to avoid traditional, telco-style regulation.

Guzman Aceves’ proposed decision is on track for a commission vote in August.

Bill to beat down broadband subsidy program drops in California assembly

by Steve Blum • , , , ,

Liberty valence 625

It was long expected. On Monday, assemblywoman Cecilia Aguiar-Curry (D – Yolo) gutted an affordable housing bill and substituted text that would, if enacted, reaffirm that California’s broadband standard is stuck in the 1990s at 6 Mbps download and 1 Mbps upload speeds, and make it even more difficult to use the California Advanced Services Fund (CASF) to bring modern service to rural communities.

Assembly bill 570 is the cable and telephone industry’s response to senate bill 1130, which is carried by senator Lena Gonzalez (D – Los Angeles) and would raise California’s minimum broadband speed to a symmetrical 25 Mbps down and up. The AB 570 language tracks with talking points pushed by Comcast’s and Charter Communications’ Sacramento lobbying front, the California Cable and Telecommunications Associations (CCTA), and parroted by the California Emerging Technology Fund, a non-profit that takes its money from cable and phone companies these days.

They’ll be the big winners even if all AB 570 does is kill off SB 1130.

But it might go farther than that. AB 570 would also allow government agencies to tap into CASF and use it to backfill information technology and telecoms budgets. Up until now, CASF’s primary job has been to pay for upgrading rural broadband infrastructure, at least when it wasn’t being gamed by incumbents. The perilous condition of state and local government finances this year will make any new source of operating revenue very attractive to lawmakers.

That’s just in case the millions of dollars they’re paid by the likes of AT&T, Frontier, mobile companies and the cable industry isn’t sufficient motivation to embrace AB 570.

Aguiar-Curry rubbished SB 1130 during a California Forward-sponsored broadband policy webinar in May, even though she said she hadn’t read it yet. She was also a key backer of 2017’s AB 1665, which lowered California’s broadband standard to 6 Mbps down and 1 Mbps up, and turned CASF into a piggy bank for monopoly model incumbents.

This time, she’s taking the lead.

I’ve advocated for SB 1130, and for other useful changes to CASF. I am involved and proud of it. I am not a disinterested commentator. Take it for what it’s worth.

FCC limits on cell site expansion permits challenged by California cities

by Steve Blum • , , , ,

West sac cell site

California cities are pushing back against the tighter limits on wireless infrastructure permit reviews that the Federal Communications Commission approved in a party line vote earlier this month. Three cities in Los Angeles County – Glendora, Rancho Palos Verde and Torrance – and the California and Oregon leagues of cities filed a challenge to the FCC’s ruling with the San Francisco-based ninth circuit federal appeals court.

The FCC ruling said cities, or other local agencies, can’t delay starting a 60-day federal shot clock and can’t add aesthetic requirements when granting permit for expansions or other additions to cell sites and towers, or other wireless facilities, so long as the changes are within certain limits. In other words, when the work falls under what are usually called the “6409” rules, after the section federal law involved. The FCC said that the 60-day shot clock begins as soon as a wireless company takes the first step in a permit process, whether or not they’ve filed a formal application. If the shot clock expires, the permit is “deemed granted”.

The cities and associations filing the petition for review argued, as might be expected, that the FCC exceeded its authority…

The Commission’s new rules and significant changes to its existing rules unlawfully preempt local and state government authority promulgated without response to the arguments advanced by Petitioners in the record…

Petitioners seek review of the Ruling on the grounds that the Ruling is arbitrary, capricious, and an abuse of discretion.

The cities’ filed on Monday. I haven’t seen any other appeals from any other parts of the U.S. Assuming that’s the case, it’ll be handled by the ninth circuit, which is also considering a similar, but much larger, challenge to the FCC’s 2018 preemption of local ownership of city street light poles.

That case was heard in February, by three ninth circuit judges. There’s no particular timeline for a decision, but they’ve been working on it long enough that it could come at any time. Expect a similar journey of a couple of years for this latest appeal.

Nearly all broadband subsidy proposals could survive California’s chopping block. Nearly

by Steve Blum • , , , , ,

There won’t be enough money in the California Advanced Services Fund (CASF) to pay for all the broadband projects proposed for subsidies last month. Grant requests total $533 million, but there’s only $145 million in tax revenue projected to be available for CASF infrastructure projects, as the program is designed and run now.

Something has to give. But not everything. One potential remedy is to top up project budgets with federal money. Two other possibilities are to reduce the share of those budgets paid for by CASF and/or eliminating some proposals completely.

Limited changes to CASF rules landed in the hopper at the California capitol on Monday. Two state budget clean up bills – “trailer bills” – with identical language were introduced: assembly bill 82 and senate bill 108. The tweaks allow CASF grants to be combined with subsidies from the federal Rural Digital Opportunity Fund (RDOF), even when a project area has existing broadband service that exceeds California’s achingly slow 6 Mbps download/1 Mbps upload standard. A project area is eligible for RDOF money if it lacks service at 25 Mbps down/3 Mbps up.

Maybe the feds will ride to the rescue, but that’s a question for later. RDOF broadband subsidies are awarded via a complex reverse auction that is scheduled for October. For now, Californians have to rely on what’s left in CASF for broadband infrastructure upgrades. That means pruning back the $533 million thicket of grant applications.

Start by tossing Exwire’s $4.5 million proposal for the Kingswood neighborhood near Lake Tahoe. Charter Communications filed a competing (and more plausible) application and can upgrade broadband service there for less money. Pull out Hunter Communications’ $290 million fiber project in Mendocino County, too. Even if it were cut in half, it would soak up all the money remaining in CASF. To get back into the game before RDOF money shows up, Hunter will have to dramatically downsize and redesign the project. Maybe it will, but for now consider it sidelined.

That leaves 52 grant applications, most of which are asking CASF to pay for 100% of project construction costs. If you dial the subsidy level down to 60%, the total ask drops to $143 million, which is a neat fit for the estimated money available.

The world doesn’t run that neatly, though. Requiring 40% matching funds would likely eliminate many, maybe most, applicants – bankrupt Frontier Communications comes to mind. So another way to filter out proposals is by cost per home served.

There are four projects needing subsidies of more than $50,000 per home: Darlene Road, Ventura County (Charter), Cuyama, Santa Barbara County (Frontier), Long Valley, Plumas County (Plumas Sierra Telecoms) and the biggest ask remaining, the $82 million proposal made by a startup ISP, WiConduit, in western Sonoma County. Lop off those four and the remaining 48 projects total $132 million, leaving enough in the kitty to maybe add one or two (but not three) of the high cost proposals back in.

The culling process that California Public Utilities Commission staff will ultimately use won’t be this simple. There are many ways to stray from the CASF trail. For example, some projects could be killed off by eligibility challenges from competitors. Others could be rejected because of incomplete or inchoate applications. And some applicants might be deemed unfit or unqualified – project budgets have to backstopped by letters of credit and company financial statements have to be blessed by outside accountants.

This natural attrition combined with a shot at extra money from RDOF means there’s hope for everyone. There’s even the tantalising prospect that hybrid CASF/RDOF proposals for new projects will be entertained. Stay tuned.

The Central Coast Broadband Consortium (CCBC) supported Charter’s San Benito County proposal and assisted Etheric Networks with its application. The Connected Capital Area Broadband Consortium (CCABC) assisted DigitalPath. I assisted the CCBC and the CCABC, and also kibitzed on other projects. I also have opinions about what the CASF program should be (in case you haven’t noticed). I’m not a disinterested commentator. Take it for what it’s worth.

California broadband subsidy fund dwindles to less than a third needed for pending projects

by Steve Blum • , , , ,

Sick piggy bank

With only $145 million in collectable tax revenue left to spend on broadband infrastructure subsidies, the California Advanced Services Fund (CASF) will run dry this year. Last month, 54 broadband projects totalling $533 million in grant requests were proposed for CASF funding. Many, if not all, will be trimmed and some will almost certainly be rejected completely.

My blog post yesterday details the $130 million shortfall in tax revenue collected for CASF – actual and projected – over the final five years of the program, assuming that the legislature doesn’t extend it or the California Public Utilities Commission can’t raise the tax rate applied to in-state phone bills that funds it. Most of the shortfall – almost $120 million – will hit the account that pays for extending and upgrading broadband infrastructure, mostly in rural Californian communities.

That means that the $575 million authorised by the legislature for broadband infrastructure subsidies over the past 12 years drops to about $457 million in real money. Since 2008, the CPUC has awarded $282 million to Internet service providers, nearly all as grants. There was a loan program early on, but that didn’t prove to be popular and it was wound down, with the remaining money in the loan fund reallocated to grants.

The overhead for running CASF is also paid for by the phone tax revenue. As of a year ago – the most recent figures available – administrative costs totalled $17 million since the beginning of the infrastructure subsidy program, and have risen over the years. If you assume that the $2.2 million spent on administrative costs just for the infrastructure program in fiscal year 2018–19 stays steady and all projects are wrapped up by 2025, total overhead climbs to $30 million.

There’s some uncertainty in the numbers. CPUC overhead might continue to rise and project oversight could drag on, but in some years investment income has more than covered administrative costs. Maybe all the 77 projects already approved for CASF funding will be completed, but that’s not the way to bet. Money allocated to cancelled projects and a small but steady stream of loan repayments could add to the total available for new infrastructure grants. On the other hand, it might not be a bad idea to leave a reserve for projects that overrun budgets through no fault of their own – for example, because of tougher utility pole attachment standards imposed by the CPUC itself.

With that caveat in mind, add up all the expenses, subtract them from the actual dollars the CPUC will collect for the CASF infrastructure program, and you end up with $145 million left to spend on broadband projects. Tune in tomorrow for a look at how those $533 million worth of grant proposals might be carved down to fit.

CASF Infrastructure Account as of 23 June 2020
Authorised – total$575,000,000
Infrastructure shortfall (est.)($117,654,165)
Infrastructure Account net of shortfall$457,345,835
Infrastructure awards as of 31 Dec 2019$271,333,358
Infrastructure grants awarded in 2020$10,825,350
Cumulative admin overhead as of 30 Jun 2019$16,732,595
Estimated admin overhead FY 2019–25$13,142,082
Total Infrastructure Account spent/encumbered$312,033,385
Funds remaining for new CASF infrastructure grants$145,312,450

The Central Coast Broadband Consortium (CCBC) supported Charter’s San Benito County proposal and assisted Etheric Networks with its application. The Connected Capital Area Broadband Consortium (CCABC) assisted DigitalPath. I assisted the CCBC and the CCABC, and also kibitzed on other projects. I also have opinions about what the CASF program should be (in case you haven’t noticed). I’m not a disinterested commentator. Take it for what it’s worth.

California’s broadband upgrade fund could lose $120 million, after senate committee caps subsidy bill

by Steve Blum • , , , ,

Los alamos verizon plant 29oct2015 625

The California senate’s appropriations committee slammed a hard limit on the amount of money the California Public Utilities Commission can collect from taxpayers to fund broadband infrastructure subsidies. If the cap becomes law, it will lead to a cut of about $120 million from money previously approved for expanding and upgrading broadband service in California, primarily in rural communities.

The amendments to senate bill 1130 – approved behind closed doors on Thursday – would remove the CPUC’s authority to increase the tax on telephone bills that’s collected for the California Advanced Services Fund (CASF). About 90% of CASF money is earmarked for broadband infrastructure construction grants. The rest goes towards broadband facilities for public housing, regional broadband consortia and broadband promotion.

The result, in very round numbers, could be a total CASF shortfall of $130 million. Which means the amount available for broadband infrastructure grants would be cut by something like $120 million, assuming the hit follows the historical 90% share given to infrastructure. That’s without adding investment income, which was $4.5 million in the last fiscal year, or subtracting out the CPUC’s administrative overhead costs, which were $3.5 million (10% of total CASF expenditures) in the same period. Both are trending up, although investment income is more volatile and, in any event, will drop as subsidy checks are written.

The blame or credit, depending on your point of view, doesn’t fall entirely on California lawmakers or the cable and telephone company lobbyists that pay them millions of dollars to protect monopoly-model businesses from competitors offering better service at a lower price. The CPUC set the current CASF tax bite at 0.56% of the monthly charges billed to telephone customers for in-state calls, beginning in 2018. That rate was reckoned at the time to be sufficient to collect the maximum $330 million CASF supplement – $66 million per year for five years – that was authorised by the legislature in 2017.

Things didn’t turn out that way. According the latest CASF annual report published by the CPUC, yearly revenue will be $41 million in 2020 and is expected to drop to $35 million in the next two years, just a bit over half of the authorised amount.

“This revenue shortfall is attributed to the continuing downward trend in intrastate telecommunications services that are subject to CPUC surcharges”, the annual report states.

Under current law, the CPUC can raise the 0.56% tax rate –“surcharge”, as the jargon goes – to keep CASF topped up, as it has done in the past. It has also lowered the rate in order to stay within caps set by the legislature. Whether commissioners have any appetite for raising it now is an open question. The 0.56% rate is the highest the CASF surcharge has ever been and, given the sharp drop in overall state revenues due to the covid–19 emergency, broadband subsidies are probably low on the Newsom administration’s tax hike priority list.

Details of the changes made to SB 1130 only became public over the weekend, as legislative staff worked through the dozens of bills that the senate appropriations committee blessed or killed on Thursday. The committee vote was five ayes and two noes, with the split breaking along party lines. Steven Bradford (D – Los Angeles), Jerry Hill (D- San Mateo), Connie M. Leyva (D – San Bernardino), Anthony Portantino (D – Los Angeles) and Bob Wieckowski (D – Los Angeles) were in favor; Patricia Bates (R – San Diego) and Brian Jones (R – San Diego) opposed it.

No other changes were made. As it now reads, SB 1130 would raise California’s minimum broadband service standard to 25 Mbps upload/25 Mbps download speeds. Sorta. A community that lacks that level of service would be eligible for a broadband upgrade grant from the California Advanced Services Fund (CASF), but the maximum speeds supported by subsidised infrastructure could be as slow as 25 Mbps download/3 Mbps upload.

SB 1130 is queued up for a floor vote by the full California senate, where it needs a simple majority to pass.

I’ve advocated for SB 1130, and for other useful changes to CASF. I am involved and proud of it. I am not a disinterested commentator. Take it for what it’s worth.

Tight limits on local review of cell site expansions just got tighter, as FCC widens preemptions

by Steve Blum • , , , ,

Marina cell sites 625

On a party line vote last week – republicans yes, democrats no – the Federal Communications Commission further preempted local government control over wireless facilities such as cell sites and towers. The ruling tightens enforcement of a 60-day shot clock for local permit approval of what it reckons to be minor modifications to a site. If time expires, the permit is "deemed granted. It also bans additional aesthetic requirements and widens a loophole that allows wireless companies to escape existing ones.

The first draft of the new rules was published last month, and despite a flood of objections from local governments, nothing much changed. The final version tweaks the definition of the trigger that starts the 60-day shot clock. It begins running when two things happen:

  1. An applicant “takes the first procedural step that the local jurisdiction requires”, which could be a meeting with staff to discuss the project, although the FCC considers the step taken when the company makes “a written request to schedule the meeting”. The same applies to things like community meetings or planning reviews – the 60 days starts ticking down as soon as the request for such is made.
  2. “The applicant submits written documentation showing that a proposed modification is an eligible facilities request” – in other words, is a minor collocation of transmission equipment on an existing structure, as defined by congress and the FCC. The local agency doesn’t have to buy off on the claim or consider the documentation complete. The company just has to file its arguments.

A tight limit on concealment requirements also got some minor editing, although it didn’t satisfy objections raised by local governments or commissioner Geoffrey Starks, a democrat. New concealment or stealthing measures can’t be imposed, and existing requirements can only be enforced if there is “express evidence in the record to demonstrate that a locality considered in its approval that a stealth design for a telecommunications facility would look like something else, such as a pine tree, flag pole, or chimney”. The new rules are not workable, Starks said in his dissent

In many cases, local governments approved sites years ago, well before passage of the Spectrum Act. Particularly for smaller cities, it’s unlikely that their decisions explain the intent behind a particular requirement affecting a site’s appearance. Yet today’s Declaratory Ruling states that, unless the regulator can provide express evidence in the record demonstrating that a requirement was intended to disguise the nature of the equipment as something other than a wireless facility, the local government must give streamlined treatment to any changes. Moreover, for changes in appearance that don’t disguise the nature of the equipment but merely make it harder to notice, the Declaratory Ruling establishes a standard that effectively preempts any requirement that the applicant claims it cannot reasonably meet…

Doing this via a Declaratory Ruling will place an undue burden on local governments that are unfamiliar with the Commission. A clerk in a small city may not realize that a proposed site modification will require her to review not only the Code of Federal Regulations but the language of this decision and our 2014 order.

The FCC’s decision also begins the next phase of its campaign to end local discretion over cell sites and other wireless facilities. It’s considering allowing companies to expand the boundaries of “an existing facility…up to 30 feet in any direction”, under the same shall approve within 60 days rule. It’s asking for public comments, but not offering much time – 20 days after the notice is published in the federal register, with reply comments due 30 days after that.

Declaratory Ruling and Notice of Proposed Rulemaking, Implementation of State and Local Governments’ Obligation to Approve Certain Wireless Facility Modification Requests, 9 June 2020

AT&T blows off net neutrality as it zero rates HBO Max

by Steve Blum • , , , ,

Marvin fire

AT&T is giving its HBO Max streaming service a free ride on its mobile broadband network. The bandwidth consumed by AT&T mobile customers while watching HBO Max programming won’t be counted against their monthly data caps. According to a story in The Verge by Nilay Patel, AT&T’s streaming competition won’t get the same zero rating treatment…

HBO Max, AT&T’s big bet on the future of streaming, will be excused from AT&T’s mobile data caps, while competing services like Netflix and Disney Plus will use up your data…

AT&T…confirmed to The Verge that HBO Max will be excused from the company’s traditional data caps and the soft data caps on unlimited plans.

The story goes on to say that AT&T offers other streaming platforms the opportunity to pay for the bandwidth their subscribers consume, but none have found the deal compelling enough to take it. It works for AT&T because it’s just taking money out of its HBO Now pocket and putting it into its AT&T mobile pocket.

Whether it’s a privilege it reserves for itself or one it sells to others, AT&T’s zero rating tactic is the kind of conduct that network neutrality rules are intended to stop. If there were network neutrality rules. The current Federal Communications Commission thinks zero rating and pretty much anything else AT&T does is just fine – that’s why the republican majority voted in 2017 to repeal the net neutrality rules established during the Obama administration.

It’s different in California, sorta. A law passed in 2018 bans “zero-rating some Internet content, applications, services, or devices in a category of Internet content, applications, services, or devices, but not the entire category”, or accepting payment to do so. Unfortunately that law – senate bill 822 – is on ice right now. California attorney general Xavier Becerra agreed not to enforce it while appeals of the FCC’s 2017 decision work their way through the federal courts.

A federal appeals court in Washington, D.C. refused in February to reconsider its earlier decision (mostly) upholding the FCC’s net neutrality rollback. The nominal 90-day deadline for taking it to the federal supreme court passed without action last month. The net neutrality battle could be back in California soon.