Tag Archives: rdof

Breaking: California’s RDOF incentive plan released, $150 million offered to bidders in targeted communities. Maybe

by Steve Blum • , , , ,

Front line dispatch 625

A list of census block groups eligible for subsidies from both the federal Rural Digital Opportunity Fund (RDOF) and, provisionally, the California Advanced Services Fund was posted on the California Public Utilities Commission’s website late today.

The plan is to make CASF money available to Internet service providers that want to compete for federal subsidies in the neediest Californian communities, in order to incentivise them to bid more aggressively in the RDOF reverse auction. As much as $150 million might be available.

Unfortunately, it’s just a plan and the details won’t be finalised until December at the earliest. The auction begins next Thursday.

According to the explanation posted:

These CBGs were selected for Kicker funding from among the final 370,986 RDOF Eligible Locations for California, as issued by the FCC on October 8, 202, given that each census area has at least 1 of 3 CPUC-selected criteria: 1. Low linear density of RDOF locations passed by roadway mileage. 2. Low income population. 3. Tribal lands. The intent of Kicker funding for these selected areas is to support RDOF Phase I (AU 904) winning bidders with state funds to allow the development of broadband networks in these financially challenging areas of California.

Expect more details in the coming days, I’ll post them as I get them.

Time running out for CPUC to maximise federal bang for California broadband bucks

by Steve Blum • , , , ,

Zonk

So far, the California Public Utilities Commission isn’t budging on its nonsensical plan to decide after the upcoming federal Rural Digital Opportunity Fund reverse auction whether it will offer cash incentives to Internet service providers that might be bidding for broadband service and infrastructure subsidies for Californian communities.

Instead, it’s taking comments on a plan drafted by staff. Not comments from the general public though. Only those who file the necessary paperwork to become a “party” to the “proceeding” have a say. I did that on behalf of the Central Coast Broadband Consortium, and observed that offering ISPs money before they bid creates an incentive to do so more aggressively, but giving them money after they bid is just, well, giving them money…

The incentive value of the proposed [cash supplement] will be greatly diminished, and the objective of motivating organizations to submit bids that are lower – i.e. more competitive vis a vis other States – will not be achieved. Instead, any [California Advanced Services Fund] subsidy that is ultimately awarded to successful bidders will merely reimburse them for costs they would have otherwise paid out of their own funds. It will be a gift of public money without the compensatory benefit of more broadband infrastructure and service upgrades for more Californians than would have otherwise occurred…

No additional authority or direction is required to implement the Staff Proposal. Indeed, to engage in a lengthy and litigious deliberative process is to defy explicit directives to immediately implement an RDOF incentive program from both the California Legislature and the [CPUC].

Comments on the staff’s proposal filed by other organisations, whether or not accepted into the official record, are below. Replies and rebuttals are due Thursday. A decision on whether to approve the plan as is, modify it or scrap it entirely will likely come in December. The Federal Communication Commission’s RDOF auction takes place on 29 October 2020.

Correction: replies are due on Thursday, 22 October 2020, not 20 October 2020. The change has been made above.

Comments on CPUC Staff Proposal on State-Federal Broadband Infrastructure Funds Leveraging, Rulemaking 20-08-021, published 1 October 2020

California Emerging Technology Fund
Central Coast Broadband Consortium
CPUC public advocates office
Electronic Frontier Foundation
Greenlining Institute and TURN
National Diversity Coalition
North Bay North Coast Broadband Consortium
Rural County Representatives of California
Small LECs, aka independent rural telephone companies

California’s two biggest broadband companies may pass up federal RDOF subsidy auction, but others are in the hunt

by Steve Blum • , , , ,

Money case 625

The Federal Communications Commission included 24 obviously Californian contenders in its final list of 386 qualified bidders for Rural Digital Opportunity Fund (RDOF) money (list is below). The announcement didn’t say which service tiers they’re eligible to bid in. There are four tiers, with higher service levels getting preference in the auction: 25 Mbps download/3 Mbps upload, 50 Mbps down/5 Mbps up, 100 Mbps down/20 Mbps up, 1 Gbps down/500 Mbps up (what the FCC considers to be gigabit service).

There will almost certainly be more than a couple dozen Internet service providers going after RDOF subsidies to upgrade broadband service in California. There are probably companies on the eligible list without a prominent presence here who will bid in the reverse auction on 29 October 2020. And others could be hiding behind camouflaged corporate identities are buried within groups of bidders – “consortia”, as the FCC refers to them.

The most significant names on the eligible list are bankrupt Frontier Communications and a subsidiary of Charter Communications, CCO Holdings, LLC. Both are also going after California Advanced Services Fund (CASF) grants for broadband upgrade projects in areas eligible for RDOF money.

The missing names are even more significant: AT&T and the two major cable companies in California, Comcast and Charter Communications. Comcast almost certainly isn’t interested in RDOF money – it avoids the strings attached to public subsidies like the plague – but AT&T might have filed under an alias, as Charter did, and could yet pop up out of hiding.

Smaller cable companies – Cox Communications, Suddenlink (via corporate parent Altice), Mediacom, Horizon and San Bruno – made the cut, as did telcos like CenturyLink, Verizon and Ponderosa. Not all of them may be bidding in California – the FCC didn’t say which states the lucky 386 are interested in.

Several wireless ISPs with California systems are on the list, but they might struggle to win bids here. Bidders who convinced the FCC they have the capability of delivering gigabit service have a significant advantage in the complicated RDOF reverse auction process. A WISP which only qualifies for, say, the 25/3 tier will have a difficult, if not impossible, time competing against a fiber to the premise company that offers a legitimate gigabit. Since the competition is nationwide, Californian ISPs restricted to lower tiers will be at a distinct disadvantage to wireline companies bidding for subsidies in other states.

Eligible RDOF bidders with California ties

  • Altice USA, Inc.
  • Cal.net, Inc.
  • California Internet, L.P. dba GeoLinks
  • Charter Communications/CCO Holdings, LLC
  • CenturyLink, Inc.
  • Conifer Communications
  • Consolidated Communications, Inc.
  • Cox Communications, Inc.
  • Digital Path, Inc.
  • Digital West Networks, Inc.
  • Etheric Communications LLC
  • Frontier Communications Corporation, Debtor in Possession
  • Hankins Information Technology
  • Horizon Cable TV, Inc.
  • Mediacom Communications Corporation
  • NRTC Phase I RDOF Consortium (includes Plumas Sierra cooperative)
  • Ponderosa Communications, Inc.
  • RDOF USA Consortium (includes Anza cooperative)
  • San Bruno CityNet Services
  • Sierra Nevada Communications
  • South Valley Internet Inc.
  • Surfnet Communications
  • Ultimate Internet Access, Inc.
  • Verizon Communications Inc.

California broadband project subsidy requests trimmed, but most might go to the back of the line

by Steve Blum • , , , ,

Sunesys build freedom blvd 625Three revised broadband project grant applications to the California Advanced Services Fund (CASF) were posted over the past couple of days. Two fiber to the premise builds – Frontier Communications’ in Crescent City and Plumas-Sierra Telecommunications’ in the Scott Road area of Lassen and Sierra counties – were trimmed by a few hundred thousand dollars. But another – Hunter Communication’s $290 million proposal in Mendocino County – was slashed to $158 million.

Even so, Hunter’s prospects are dismal. There’s something like $216 million left in CASF, assuming the California Public Utilities Commission approves doubling the tax on phone bills that pays for it. If the CPUC goes ahead with its possible plan to use CASF money to juice up bids for the federal Rural Digital Opportunity Fund (RDOF) auction later this month, top priority will likely be projects that tap into both subsidy programs.

Four current applicants for CASF grants qualified to bid in the reverse auction for subsidies from the Federal Communications Commission’s $16 billion RDOF pot later this month. Hunter wasn’t one of them. Even if it wasn’t asking for three-quarters of the available money, the odds of there being much money left for it are low. First dibs on funding in that area would go to a successful RDOF bidder, if any.

Frontier and Plumas-Sierra, on the other hand, could go to the top of the list. Along with two wireless ISPs that applied for CASF money – Digital Path and Etheric Networks – they were blessed by the FCC.

Of the remaining seven companies that applied for CASF grants last May, four didn’t qualify. There’s no indication that the remaining three, including Hunter, applied, although it’s possible they’re hiding behind a shell company or within a bidding group.

The full list is here.

The new breakdown is:

2020 CASF applicants, as of 14 October 2020

ApplicantProjectsRDOF eligible?CASF grant request
Digital Path11Yes$4,772,019
Etheric Networks1Yes$3,180,330
Frontier Communications10Yes$67,261,816
Plumas Sierra Telecoms6Yes$31,438,450
Charter Communications16?$16,954,563
Exwire1?$4,464,478
Hunter Communications2?$166,378,918
Nevada County Fiber1No$552,208
Race Telecommunications4No$21,857,411
Web Perception1No$1,450,697
WiConduit1No$81,886,095
Total  $400,196,985

California broadband subsidy proposals go into extra innings, with new rules and more competition

by Steve Blum • , , , ,

Extra innings

The fate of the 54 pending proposals for broadband infrastructure grants from the California Advanced Services Fund (CASF) won’t be fully known until early next year, assuming the California Public Utilities Commission approves a draft rewrite of the program’s rules. The goal is to use CASF money to make Californian bids more competitive in the reverse auction for Rural Digital Opportunity Fund (RDOF) subsidies that’ll be run by the Federal Communications Commission later this month. That auction will also, in effect, determine whether some of those CASF project proposals are approved by the CPUC.

As drafted, the new CASF rules create four categories of projects, in a rough order of priority:

  • Projects among the 54 already proposed for CASF grants that win RDOF subsidies. These will have to meet several new eligibility requirements, including gigabit-level service and open access obligations, which qualify for, maybe, a 10% “kicker” to the overall project budget, and dark fiber for tribes and/or basic “carrier of last resort” phone service, which gets an additional 10% for a total spiff of 20%. These auction winners could also ask to expand their CASF grant requests to adjacent areas.
  • Other winners of RDOF subsidies, subject to the same requirements and funding scheme above.
  • Pending CASF projects on the list of 54 that are in areas which are not eligible for RDOF funding. If simple enough, some of these could be approved (or denied) under existing rules in the next couple of months. Decisions on others would wait until the dust clears on the RDOF auction, likely in the first quarter of 2021.
  • Projects on the list of 54 that are in RDOF-subsidised areas, but don’t win RDOF money. Those will be handled on a case by case basis, taking into account the service proposed, versus that planned by the RDOF winner.

It’s too soon to tell how much money will go to each of those three categories. As it stands now, the 54 pending projects are asking for $533 million in grants, versus only about $216 million available – assuming the CPUC approves doubling the CASF tax rate for the next two years. But that total assumes anywhere from 60% to 100% of the construction budget would come from CASF. If a significant number win RDOF subsidies and only need 10% to 20% funding from CASF, more projects, including ones not currently on the list, could get built.

There are a couple of problems with the draft revisions to the CASF program. First, introducing new rules in the middle of the game is unfair to the Internet service providers that filed their grant applications on time and according to the published specifications last May. It may be done with the greater good of all Californians in mind, but it still rankles. The FCC’s RDOF plan and timetable was approved in January.

The second problem is more serious – the CPUC intends to retroactively apply new rules after the game is over. The draft revisions come too late. The CPUC is inviting a wide open debate on the new rules, and the final version won’t be approved until December, at the earliest. That’s a month after the RDOF auction concludes. With millions of dollars in capital spending and equally severe FCC penalties for defaulting on bids at stake, companies need to know, with a prudent degree of certainty, how much money they can expect and what the requirements are for getting it. Vociferous objections from monopoly model incumbents are likely, and there’s no guarantee that the CPUC will either approve the final plan –whatever it turns out to be – or have enough money to go around. The result is diminishing incentive value of CASF backfill money.

To get the most bang for Californian taxpayers’ bucks, the CPUC needs to pull the trigger before the 29 October 2020 RDOF auction.

CPUC fumbles bid to win billions of federal broadband dollars for California

by Steve Blum • , , , ,

Fumble

Californian Internet service providers that try for broadband deployment subsidies in the Federal Communications Commission’s Rural Digital Opportunity Fund (RDOF) reverse auction later this month might be able to sweeten their bids by as much as 10% or 20%. Or they might not.

Yesterday, the California Public Utilities Commission published what might be described as a discussion draft of possible rules for using money from the California Advanced Services Fund (CASF) to backfill RDOF bids. The goal is to allow Californian ISPs to use state taxpayer money to better compete against bidders in other states, in order to win as much of the $16 billion in available RDOF subsidies as possible.

There are some good ideas in the draft. Had it been published in July after the California legislature explicitly allowed backfilling RDOF bids, or even in August after the commission “specifically” authorised staff to “set additional application window(s) and timeline…to incorporate federal broadband funding opportunities, such as RDOF”, it might have provoked a useful debate.

But starting the conversation 28 days before the auction begins, with a projected decision date in December, more than a month after it ends, will hurt more than it will help.

The FCC has warned prospective RDOF bidders that there will be substantial penalties for defaulters. If an ISP bids with the hope that 1. it will be able to meet whatever final rules the CPUC adopts for CASF backfills and 2. that the money will actually be available, it will be responsible for coming up with the extra money on its own if that assumption turns out to be wrong. Or get nothing from the FCC and pay a fine for its troubles.

By setting the CASF backfill rules after the game is over, the CPUC will – at the least – discourage responsible ISPs from competing. That’s a bad way to spend California’s money or to maximise the amount of federal dollars that go towards filling the state’s broadband gaps.

There’s a good way to do it, as the CPUC has shown twice in the past. In 2009, it brought critical broadband infrastructure to California by making a blanket offer of a 10% project budget match to ISPs that competed for broadband infrastructure funding from the federal ARRA program. It repeated that success in 2014 when it offered the same 10% spiff to ISPs that bid for subsidies in the FCC’s rural broadband experiments auction. All with ample notice before the federal deadlines.

The CPUC should just do it again.

CPUC staff proposal on state-federal broadband infrastructure funds leveraging, 1 October 2020

CPUC resolution authorising 10% matching funds for FCC rural broadband experiments in California, 11 September 2014

CPUC decision authorising 10% matching funds for broadband grants under the American Recovery and Reinvestment Act, 9 July 2009

Starlink’s beta test beats DSL, but still has a long road ahead

by Steve Blum • , ,

Starlink launch

Beta testers are getting reasonable speeds from Elon Musk’s nascent Starlink satellite broadband system, according to test results posted on reddit.com. It’s faster performance than most DSL service, and in the same ballpark as older cable systems.

Reasonable, but not spectacular.

In the couple dozen results reported, download speeds were between 16 Mbps and 114 Mbps (discounting a partial measurement of 11 Mbps), with most clustered in the 40 Mbps to 60 Mbps range. Measured upload speeds varied from 5 Mbps to 42 Mbps, with 10 Mbps to 20 Mbps typical. There was a wide spread in latency – the time lag for data to make a round trip. Fastest response was 18 milliseconds and the slowest was 94 milliseconds.

Starlink is a low earth orbit (LEO) system, which means that the path up to the satellite and back down to the ground is only a few hundred miles. That means it takes a lot less time for data to get to where it’s going than it would via traditional geosynchronous satellites, which are tens of thousands of miles away.

Low earth orbit also means that the satellites move quickly overhead, and accessing them requires much more complex equipment. Each Starlink satellite is considerably smaller and less powerful than the geosynch birds. Put it all together and Starlink will certainly have serious capacity limits relative to terrestrial systems – something Elon Musk is quick to acknowledge – and it will likely have considerable variation in the speeds delivered minute to minute, as the test results imply.

Those kinds of numbers aren’t likely to win any subsidies in the Federal Communications Commission’s upcoming Rural Digital Opportunity Fund auction either. Starlink is very much a work in progress. In order to move out of the proof of concept stage and into full commercial availability, the company will have to launch a lot more satellites and develop new technology. Both are doable, but neither are guaranteed.

But it’s looking like Starlink, and perhaps other LEO constellations, will have at least a supporting role to play in filling some of the world’s intractable broadband gaps.

CPUC considers topping up broadband subsidy fund, but money will still fall short

by Steve Blum • , , , ,

Sick piggy bank

California’s primary broadband infrastructure subsidy fund will grow by about $70 million, if the California Public Utilities Commission approves a proposal to nearly double the tax that pays for it.

The California Advanced Services Fund (CASF) gets its money from a tax on phone calls made within California. That’s source of revenue is on the decline. The CPUC can collect up to $66 million a year for the fund (more, under certain circumstances), and sets the tax rate accordingly. During the first three years of the commission’s current five year authorisation, the CASF tax rate was set at about half a cent on the dollar – 0.56%. Because of the decline in intrastate telephone revenue, that rate would have led to a five year deficit of more than $100 million in money available for broadband infrastructure subsidies.

The deal on the table would raise the rate to 1.019% for the final two years the CPUC is allowed by law to assess the CASF tax on phone bills. CPUC staff estimates that would bring the annual take up to the annual $66 million limit, and hold the five year deficit at $53 million.

Most of the money in CASF goes towards building networks, but not all of it. Some of it pays for broadband promotion and other programs. The table below shows my calculations. Bottom line, there would be about $216 million available for new broadband infrastructure grants, instead of about $145 million, as I estimated in June.

That’s a help. More Californians will get the broadband service they need. But CASF will soon run dry, likely this year. More than $500 million was requested in the last round of infrastructure grant applications in May. And the CPUC has authorised – but not yet implemented – an extra round of applications to backfill bids for federal broadband subsidies in October. With the California legislature’s failure to address the state’s broadband and broadband funding deficits in its recently concluded session, what we see (or not) is all we’re going to get.

CASF Infrastructure Account, assuming surcharge increase to 1.019%

Authorised – total$575,000,000
Infrastructure shortfall (est.)($47,248,062)
Infrastructure Account net of shortfall$527,751,938
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$215,718,553

AT&T not on FCC’s list of potential RDOF bidders, but 505 others are

by Steve Blum • , , , ,

Paicines pole route

AT&T is not on the list of 505 would-be rural broadband subsidy bidders released by the Federal Communications Commission on Tuesday. It’s also not listed as a member of any of the 38 consortia – bidding groups – and none of the other 467 contenders are obviously AT&T subsidiaries. None of the FCC registration numbers directly held by AT&T match up to any of the listed bidders either.

It’s difficult to prove a negative, but so far it appears that absence of evidence is also evidence of absence. AT&T does not appear to be interested in going after the $16 billion in ten year operating subsidies that the FCC will be awarding in the Rural Digital Opportunity Fund reverse auction next month.

The list is a bit of a tease. The FCC isn’t telling us which states these companies intend to bid in – California might or might not be in their dreams.

Other major California Internet service providers are also missing from the list, or have been tagged as having “incomplete” applications. Only one of California’s incumbent telcos filed complete paperwork the first time around. Consolidated Communications, which operates in a small area east of Sacramento, is ready to go. There were no other obviously Californian ISPs among the 121 organisations on the “complete” list.

Frontier is one of the 384 ISPs on the “incomplete” list, sailing under its bankruptcy-induced “debtor in possession” flag. So is Cox Communications, Altice (aka Suddenlink) and a couple of smaller cable operators, Horizon and Mediacom. But not Charter, despite signalling earlier this year that it would chase RDOF money, or Comcast, which comes as no surprise. Also in the incomplete category are Californian wireless Internet service providers and independent wireline ISPs.

The auction is scheduled to begin on 29 October 2020. Bidders that need to clean up their paperwork have until 6:00 p.m. eastern time on 23 September 2020 to do so. The FCC doesn’t seem likely to grant any extra time. At the same time that it published the lists, the FCC also published a sharply worded order denying five requests for extension of an earlier deadline. Pleas for waivers of eligibility or due diligence requirements usually get the same treatment.

The list will only get shorter as auction time nears.

CPUC adds California money to federal broadband subsidy bids. If

by Steve Blum • , , , ,

Cvin fiber marker sr49

Internet service providers might get California help to improve their chances at winning in the Federal Communications Commission’s Rural Digital Opportunity Fund (RDOF) auction. Broadband infrastructure subsidies from the California Advanced Services Fund (CASF) could be added to their bids, per yesterday’s decision by the California Public Utilities Commission.

If.

If commission staff opens a second window for CASF grant applications quickly enough. If those proposals leverage RDOF money. And, particularly, if there’s any money left in the fund.

The decision also tweaked rules for broadband facilities grants in public housing and allowed CASF money to be spent on technical assistance for tribes (but not for other primary jurisdictions, such as cities or counties).

CASF rules set an annual date for project proposals. Usually, it’s the first of April, but it was bumped to May this year because of the covid–19 emergency. The CPUC received 54 applications totalling $533 million in requests, which is twice the theoretical CASF funding limit and more than three times the money that’s actually available.

That prompted the head of the CPUC’s communications division to send out a warning to applicants that it would be in their best interest to go after RDOF money too. A bill attached to the state budget tweaked the law to allow CASF money to go to co-funded projects that meet RDOF eligibility standards, instead of the usual, and pathetic, 6 Mbps download/1 Mbps upload speed limit on project area eligibility.

Yesterday’s decision, written by commissioner Martha Guzman Aceves, gives staff discretion to allow a second round of applications that “incorporate federal broadband funding opportunities, such as RDOF”.

The objective is to help California get its fair share (or a bit more) of the $16 billion in RDOF money that the FCC will award by reverse auction in October. Adding CASF subsidies to project financial models will allow for more aggressive bidding, giving Californian Internet service providers a competitive edge over ISPs in other states.

The mechanics of how that is supposed to happen are still to be determined. There’s a standard six month timeline for reviewing and approving CASF grant proposals, so standard procedures won’t work for an auction that’s a little more than two months away. The big if – if CASF money is available – also has to be answered.

To do that, the 54 pending applications need to be trimmed – some or all rejected completely, or proposals and service areas adjusted to allow RDOF to backfill project budgets.