Tag Archives: uia

Reboot for dueling San Bernardino FTTH projects

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Frontier’s federal CAF2 subsidised census blocks.

Two competing proposals to build a fiber to the home system in the San Bernardino County town of Phelan and surrounding communities are now a lot closer to meeting in the middle.

More than a year ago, in August 2015, Race Telecommunications submitted a proposal asking the California Public Utilities Commission for a $48 million grant from the California Advanced Services Fund (CASF) for its Gigafy Phelan project – that’s 60% of the then-estimated construction cost to reach about 10,000 homes with fiber. In January, Ultimate Internet Access filed an application for a $21 million subsidy to serve more or less the same number of homes in more or less the same area.

In the ensuing months, both companies have been in discussions with CPUC staff. As a result, UIA bumped up its request by $662,000 and Race slashed its proposal by more than half, to $23 million, and reduced the subsidised share from 60% of construction costs to 50%.

The CPUC posted the revised project descriptions last week, giving incumbents another formal chance to challenge the applicants’ position that the area is underserved, in other words the broadband service that’s available now doesn’t meet the minimum CASF standard of 6 Mbps download and 1.5 Mbps upload speeds. As a matter of practice, though, incumbents are allowed to challenge a CASF project proposal right up until the time the commission votes on whether or not to approve it.

Facts on the ground have changed somewhat over the past year. Frontier Communications has taken ownership of the telephone system serving the area, and has accepted federal subsidies to upgrade broadband service in much of it to at least the FCC’s 10 Mbps download and 1 Mbps upload speed standard. Charter Communications, which offers video but not Internet service, is under a CPUC order to upgrade its TV-only systems in California to broadband capability, at a minimum of 60 Mbps download speeds. Neither upgrade has actually happened yet, though.

Competition heats up for broadband subsidies in the Californian desert

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There’s a second bid for grant money to build a fiber to the home system in the San Bernardino County desert communities of Phelan, Piñon Hills, Oak Hills and West Cajon Valley, plus parts of Victorville and Hesperia. Yesterday, Ultimate Internet Access, Inc. (UIA) asked for a $21 million infrastructure subsidy from the California Advanced Services Fund CASF) for the project. It’s now competing directly with Race Telecommunications for the cash.

Last August, Race submitted a $48 million grant proposal, also for an FTTH build in that area. The two companies submitted nearly identical lists of census block groups, although their maps look somewhat different. Race is proposing to pass 10,028 homes at $8,000 total for each; UIA says it’ll hit 10,799 homes for $3,200. In both cases, 60% of that money would come from CASF.

One possible reason for the cost difference could be middle mile infrastructure. UIA says it’ll get its backhaul from Verizon and/or Charter. Race didn’t specify its middle mile plan in its public filing, but it usually wants to build or lease its own fiber lines that connect new projects with areas it already serves via CASF grants. For example Boron and Mojave, which are about 50 and 75 miles away respectively.

UIA is also active in the region. It’s received CASF subsidies for Helendale and Wrightwood, which are even closer.

The area has been redlined by Charter Communications, which has a video franchise there but hasn’t built out a digital system capable of providing broadband service. Verizon’s DSL service doesn’t hit the CPUC’s minimum speed of 6 Mbps down and 1.5 Mbps up, where it’s available at all.

There have been previous CASF grant proposals that have overlapped to a degree, but none have been as directly competitive as these two. There’s a scoring system in the CASF program that’s intended to sort these things out, but there hasn’t been an apples-to-apples opportunity to put it to use. Not until yesterday anyway.

Fiber to the home subsidies approved for two California communities

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Fiber to the cabin coming to Wrightwood.

The first two broadband infrastructure grants of the year, totaling $3.3 million, were approved last week by the California Public Utilities Commission. Ultimate Internet Access’s Helendale and Wrightwood projects sailed through on a unanimous vote by commissioners. Both are fiber to the home proposals promising to deliver a gigabit up and down to about a couple thousand residents each for $70 per month.

With one exception, the projects as approved were the same as originally outlined last month by CPUC staff. The only significant change was to the Wrightwood proposal. Instead of relying solely on wireless backhaul, it will add a fiber middle mile link…

Since the initial draft of this resolution, UIA has entered into an agreement with Charter Communications to lease an additional 1 Gbps fiber line into the Wrightwood community in order to supplement the microwave backhaul. The fiber line will provide additional bandwidth and redundancy to the project and will not affect total project costs for the purposes of this resolution.

The Helendale project, on the other hand, brings in bandwidth using just wireless backhaul. There is middle mile going through the town. Level 3, Zayo and Integra claim to have fiber there, although it’s likely all in the same cable, probably owned by Level 3. But that doesn’t mean it’s accessible.

There’s still plenty of money left the California Advanced Services Fund. The year started with something like $160 million available for infrastructure construction grants. In the unlikely event that all the pending grant applications are approved, there will still be more than $90 million left for projects.

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CPUC considers $3.3 million subsidy for two FTTH projects

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Poor broadband service in Helendale now, but fiber could be on the way.

Two fiber-to-the-home projects in the California desert, northeast of Los Angeles, will be getting a total of $3.3 million in subsidies from the California Advanced Service Fund (CASF), if the California Public Utilities Commission approves draft resolutions released last week.

The proposals, for Helendale and Wrightwood, were submitted last December by Ultimate Internet Access (UIA), an independent Internet service provider that’s already active in the area. As I noted back then, the Helendale project is particularly interesting. The plan there is to take a defunct cable system – built by Falcon and ultimately abandoned by Charter – and retrofit it with fiber. The cost for the project is pretty low – about $1,000 per household, $600 of which would be coming out of CASF. It’s estimated there are just under 2,300 homes in the area, so the CASF tab would be $1.4 million.

The Wrightwood project would run on existing poles and would cost more – $1,700 for each of the 1,900 homes reached, with CASF paying $1,000 of that. Total ask for CASF is $1.9 million.

Standard residential service would be 1 Gbps up and down for $70 a month. To make the business case work, UIA has to hit a take rate of 75% or so. That’s troubling for two reasons: it’s extremely high, even given the relative affluence of the residents and the lack of alternative, and UIA intends to use licensed microwave for backhaul. Providing an uncapped gig to something like 1,400 to 1,800 subscribers in each town, without a fiber middle mile to rely on, will be fraught.

The draft resolutions are notable for another reason. CPUC staff reviewed and approved the applications in less than four months. That’s lightning speed compared to the last CASF round, when it took a minimum of seven months and a maximum of, well, 26 months and counting, to make a go/no go decision. It bodes well for the coming year. Eleven more projects from the current round of applications are under review, as well as two from the 2013 round, with many more expected.

Wrightwood draft resolution

Helendale draft resolution