Tag Archives: TURN

CenturyLink asks CPUC to bypass transparency and ethical practice

by Steve Blum • , , , ,

Insiders only.

CenturyLink wants the California Public Utilities Commission to hand wave its purchase of Level 3 through the normal approval process and, in effect, accept a settlement reached with three (of four) protesters as a substitute for a full, public review of the transaction. The pressure is due to a self-imposed deadline of 30 September 2017 for Level 3 and CenturyLink to close the sale. If the review follows standard CPUC procedures instead, a decision might not come for another six months or more.

Leaving aside the fact that the CPUC has to base its decision on the public interest of all Californians, and not just those who jump in on utility policy issues for a living, giving a big, regulated corporation an inside fast track is exactly the sort of thing that the California legislature meant to end when it passed (and the governor signed) senate bill 215 last year. CenturyLink is asking the CPUC to skip a couple of key steps in the process – a “pre-hearing conference” and a “scoping memo” – that seem to be required by SB 215 and are intended to end cosy, backroom deals. The idea behind SB 215 was, as TURN, a utility-oriented consumer organisation and the bill’s sponsor, put it, to introduce reforms that…

…are a vital first step toward restoring public confidence in the CPUC’s ability to decide crucial issues fairly, without bias or undue influence…SB 215 includes a series of meaningful reforms that close loopholes utilities have taken advantage of in the past, and limits the opportunities for private interests to seek special favors behind closed doors. Although these reforms are not as comprehensive as the ones vetoed by the Governor last year, they provide the CPUC with an opportunity to demonstrate a commitment to transparency and ethical practice.

Damn straight. It’s a wonderful thing that advocates like TURN are fighting for the public’s right to know and participate in utility policy decisions.

Oh. Wait.

TURN is one of three intervening organisations that joined with CenturyLink to plead with a CPUC administrative law judge to ignore transparency and ethical practice and simply accept the deal they cut behind closed doors.

The thin justification offered is that delays will “diminish the benefits of the proposed transaction and the commitments made in the settlement”. Like allowing CenturyLink to kill Level 3’s dark fiber leasing business and turbo-charge its monopoly-centric business model.

Let’s hope the judge has a sense of irony.

Comcast’s monopoly power won’t be dulled by weak conditions

by Steve Blum • , , ,

Nope, that’s not Pacman, it’s what Comcast’s market share will look like in California, with or without conditions.

More of the specific objections that led to a long list of proposed conditions for California Public Utilities Commission approval of the Comcast – Time Warner – Charter mega deal were posted yesterday. Although the juicy bits have been blacked out due to confidentiality concerns, the comments filed by a consumer advocacy group – TURN, which stands for Toward Utility Rate Normalisation the Utility Reform Network – back up the claim that the merger and market swap would give Comcast a virtual monopoly on broadband service in California.

According to Susan Baldwin, an expert witness hired by TURN…

The residential voice and residential broadband Internet access markets are not now competitive and the Joint Applicants are major suppliers in these markets. The concentrated voice market and the highly concentrated broadband Internet access market suggest that there is insufficient competition to yield just and reasonable rates, terms, and conditions for these two essential products: market concentration is a strong indicator of market power. Moreover the absence of effective competition means that, post-merger, there would be no incentive for Comcast to share its merger-related synergies with its customers.

Although the conclusion was that the harm that the deal will do to Californians is so great that it shouldn’t be approved, TURN’s comments also suggested an alternative: if the merger is approved, impose a long list of conditions, which it helpfully provided.

That list made it more or less intact into the proposed decision floated by a CPUC administrative law judge in February, with due credit going to TURN which, in turn, filed comments saying hey, that’s not what we said. TURN’s arguments and the opinions offered by its expert witness do a good job of explaining why the deal should be killed. The list of alternative conditions won’t fix the problem that TURN does such a good job of detailing and, in all likelihood, will be tossed out by the courts and the FCC. Maybe it wasn’t so helpful after all.

Click to download…

TURN comments on Comcast – Time Warner – Charter deal
TURN motion on Comcast – Time Warner – Charter deal
Testimony of TURN’s expert witness, Susan Baldwin
Reply testimony of TURN’s expert witness, Susan Baldwin

CPUC urged to recognise differences between public agencies and private companies

by Steve Blum • , , , , ,

Treat munis like munis.

A consumer advocacy group – The Utility Reform Network (TURN) – wants the California Public Utilities Commission to be more flexible in evaluating broadband subsidy proposals submitted by local governments. The comments came in response to proposed new rules that open up the California Advanced Services Fund (CASF) to organisations other than traditional telephone companies.

As the proposed rules now stand, cities (and other local agencies) would have to meet the same financial requirements as private companies (at least those that aren’t traditional telephone companies). Which includes posting a construction bond that guarantees completion of projects that receive CASF grants and loans. It’s a common enough hurdle for private companies to meet but could be problematic for cities

TURN remains concerned that such a requirement may be a non-starter for [government agencies] that may act as a disincentive to even applying for CASF monies. If the requirement remains, TURN respectfully requests that the Commission consider instituting a process whereby an otherwise fully eligible governmental candidate can appeal for a waiver of the performance bond requirement. In this manner, if a governmental entity is unable to obtain a performance bond, they may still be able to be awarded a CASF grant and thereby provide broadband services to their citizens.

Performance bonds are usually used to ensure that private companies make good on promises to public entities, and aren’t generally intended to guarantee that one government agency meets another’s requirements. There are other ways of doing that, although none are as simple (at least from the CPUC’s perspective) as a performance bond.

Comments on the proposed new rules were also filed by a group representing small, independent telephone companies and by the Office of Ratepayer Advocates (ORA), the CPUC’s in-house gadfly or watchdog, depending on how lucid they seem to you at any given moment.

The small telcos support the proposed rules as written, particularly language that establishes penalties for making untrue statements in applications. ORA just wants tougher restrictions all around. The commission is scheduled to vote on the rules at its 5 February 2014 meeting.

Performance, not passion, builds broadband projects

by Steve Blum • , , , , , , ,

Most of the opening and reply comments about expanding eligibility for California Advanced Services Fund (CASF) subsidies, my own included, can be summed up in three words: gimme, gimme, gimme.

Grant writers want to write grants, public agencies want to back fill budgets, independent ISPs want to play like the big boys and the big boys – telephone and cable companies – want to keep it for themselves. No surprise.

The road to broadband is paved with competence. Good intentions lead somewhere else.

Two organizations, though, pretty much make their living commenting on CPUC proposals: the Commission’s own Division of Ratepayer Advocates (DRA) and The Utility Reform Network (TURN). Both filed opening and reply comments, and although they came to opposite conclusions, their concerns were remarkably similar.

DRA opposes expanding eligibility for CASF grants and loans. They don’t like the idea of lowering the bar that applicants have to clear, “especially since such entities likely have no demonstrated expertise in telecommunications or in building broadband facilities.”

After reading everyone else’s opening comments, they were unimpressed with the focus on general benefits rather than concrete projects, noting “the overall lack of specificity underscores DRA’s cautions about opening up CASF eligibility and concern over these entities’ lack of technical expertise to implement broadband projects.”

It’s a good point, if unfairly broad. CASF exists to fund bad broadband business cases. Paying down the capital cost is only half the battle. It takes skill, creativity and experience just to cover operating costs in problematic areas. Good intentions and positive community vibes are not enough.

Many independent ISPs have that kind of managerial horsepower. The expansion of DSL and cable modem service coupled with the natural advantages of scale the big boys bring to the table have put many out of business. But the survivors are the smart and nimble ones.

It also makes sense to look to publicly owned utilities – municipal electric systems and water districts are two examples – for expertise and resources. With secure finances, existing customers, back office systems, skilled technicians, equipment and right of ways, bona fide publicly owned utilities have the kind of assets that can make a difficult business case achievable.

DRA’s closing advice is to recommend “added oversight and safeguards to help guard against fraud, waste, and abuse of ratepayer funds” if the Commission expands CASF eligibility. TURN has some ideas for accomplishing that. More tomorrow.