Tag Archives: viasat

ViaSat bid for California broadband subsidies rejected

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There’s a difference between ambition and greed.

Nearly three years after it was first submitted, ViaSat’s proposal to deliver broadband service to a stunningly large swath of western and southern California is officially dead. The company had asked the California Public Utilities Commission for $11.1 million to buy satellite dishes and receivers for people living in underserved areas from the Oregon border, south along the coast and the western side of the central valley, to the Mexican border, and east to Arizona.

There is some logic to using expensive and limited satellite bandwidth to reach people in truly remote areas, where even fixed wireless Internet service is uneconomical. But ViaSat wanted it all: had the project been approved as proposed, then it would have been the only company that could have received subsidies from the California Advanced Services Fund to upgrade broadband infrastructure and service in that vast area for several years.

It was that exclusivity over what’s been described as “virtually all of rural California” that eventually killed ViaSat’s plans. Objections came thick and fast, particularly from regional broadband consortia under its proposed footprint. ViaSat was willing to cut the exclusivity period by a year but not give it up completely. It also refused to better focus its proposal on particular communities, rather than just grab everything it could see from orbit.

It’s a good decision on the part of the CPUC. If a company wants a subsidy, it should put in the work needed to justify the exclusivity that goes along with it and focus on the people it will actually serve.

With ViaSat out of the running, and counting the recent proposal from Ducor Telephone for Kennedy Meadows, the CASF kitty is still about $6 million oversubscribed, assuming all pending applications are funded as requested. As a practical matter, it’s unlikely all would be, but even so, the fund is at capacity now. In order for a new proposal to be funded, a pending one will have to be bumped off the table.

ViaSat becomes a regulated telephone company, sorta

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One of the big questions surrounding ViaSat’s request for an $11.1 million grant from the California Advanced Services Fund is whether it’s even eligible for the program. The California Public Utilities Commission said yes, it is eligible at yesterday’s meeting in San Francisco, approving ViaSat’s application for a certificate of public convenience and necessity (CPCN).

In other words, the satellite Internet service provider is now considered to be a regulated telephone company, to the extent that it’s engaging in the sort of business that the CPUC regulates. That business, according to yesterday’s decision, is limited to some ancillary services if, and only if, ViaSat gets CASF money…

ViaSat asserts that because it is “considering providing calling cards…and capacity for private lines or special access arrangements,” it necessarily qualifies as a telephone corporation, and therefore a public utility…ViaSat notes that it may not accept this CPCN, or may voluntarily cancel this CPCN, if it does not receive funding from the California Advanced Services Fund (CASF)…As described in the declaration, ViaSat either will be a telephone corporation and public utility subject to our jurisdiction, or will not engage in regulated intrastate operations, and therefore will not retain this CPCN.

When ViaSat applied for the subsidy nearly two years ago, a CPCN was a necessity – only companies that had one (or the mobile telecoms equivalent) were eligible. That has since changed, but even so it’s a more straightforward process with a CPCN. Given the complexity of ViaSat’s proposal and the continuing review process, changing tack might well have been impractical. Either way, getting the CPCN clears the path for a decision on the CASF grant.

No opening day CASF gold rush

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There was no stampede for the newest round of broadband infrastructure grants and loans from the California Advanced Services Fund. No project applications were filed yesterday, the first day of the new season. Or at least, there were no notifications sent out – applicants are supposed to send a project summary to a service list maintained by the CPUC. And yes, I checked my spam folder.

Even so, there are still project proposals totalling $26.2 million in the hopper, left over from the last round, which closed nearly 2 years ago, on 1 February 2013. ViaSat has an active application that originally asked for $11.1 million to buy satellite terminals for subscribers across a wide swath of western California.

It’s a fine idea in many respects – some homes are so remote that satellite Internet service is the only technically and economically viable option. But under CASF rules, every home in the massive project area – not just the relative handful opting for satellite service – would be taken off the table for future subsidies for several years. That little problem along with a flood of protests from ISPs that operate under that footprint have stalled ViaSat’s proposal.

The other proposal still under consideration – $15.2 million for a fiber-to-the-home system in Nevada County submitted by Spiral Internet – also ran into stiff opposition from incumbents. Particularly from a fixed wireless company that had received a stimulus grant several years ago. That problem seems to be solved, mainly by waiting it out, and the proposal is back under active consideration.

The current round stays open until the available money – something like $160 million – runs out. The last time, there was a set deadline, which saw more than 30 applications drop on the same day, ready or not. This time, the thinking is that keeping the window open will allow applicants to take the time to fully prepare, and let the CPUC quickly reject deficient applications without prejudice. So far, so good. If, instead of a flood, there’s a steady trickle of quality projects, it can fairly be called a success.

Tellus Venture Associates assisted with the Spiral Internet CASF application, among others, so I’m not a disinterested commentator. Take it for what it’s worth.

ViaSat doesn’t want you to know its customers still choke on FCC broadband tests

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ViaSat showed the best speed and consistency in the FCC’s latest round of national broadband testing, but those same measurements also show that its subscribers don’t get anywhere near as much data as landline customers. Similar to last year’s poor report card, the FCC results show that about a third of ViaSat’s customers get less than 2 gigabytes a month and only one of those tested hit over 10 GB.

That data is controversial. This year and last, only 6 customers were measured, versus hundreds for fiber and more than a thousand for DSL and cable. ViaSat complained last year (and this year) that there were other problems with the measuring methodology but ecstatically flaunted the results it did like. Don’t take the objections at face value.

The FCC does, though, up to a point. It suppressed the ViaSat consumption numbers in its published report, but kept it available in the reference data

As our program has evolved, we have moved to a [test equipment] configuration which has eased consumer installation, but this is not without some drawbacks. In particular, ViaSat has noted that this newer configuration complicates our ability to produce a reliable data consumption metric for satellite broadband. Consequently, for this Report, we have removed ViaSat/Exede from the data consumption charts, though this information is included in our bulk data releases.

Complicates it, doesn’t prevent it. If the data were truly garbage, the FCC would have thrown it out, as it did (and documented) in other cases. I produced the chart above using those numbers.

In most respects, the omission doesn’t matter much. Satellite is different from terrestrial wireline and wireless service – it’s a matter of physics and economics. Using extremely expensive orbital hardware to reach scattered and often price-conscious consumers is not a free ride. The trade-offs are well known, and offer a valuable addition to the broadband toolkit.

But in one respect it matters a lot: ViaSat is asking the California Public Utilities Commission for $11.1 million in subsidies for a vast swath of western California and has tried to make the argument that it should be treated the same as wireline providers. Which would mean, under current rules, that anyone living under the ViaSat footprint would be excluded from any future wireline upgrade subsidies from the California Advanced Services Fund, locking them into costly and stingy satellite service.

The CPUC should just say no. Its rules require CASF satellite grant recipients to “prove functionality” in addition to speed, and a high cost/low cap service, of any kind, isn’t functional in the 21st century. I’ve said it before: Californians deserve better.

Original source spreadsheet with data consumption stats, from FCC website
Modified spreadsheet, from my website
Compare the two. The changes I made were to include the ViaSat data in the chart and relabel it accordingly, and use a heavier line for emphasis.

2014 Measuring Broadband America – main page

2014 Measuring Broadband America – Fixed Broadband Report

2014 Measuring Broadband America – Technical Appendix

DSL is the new dial-up

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On the whole, Internet service providers in the U.S. performed about as well in 2013 as they did in 2012 – largely hitting the same speed and consistency benchmarks. That’s one of the conclusions of the latest FCC report on the performance of consumer-grade fixed broadband services. Diving into the detail, though, shows that DSL-based service is falling further behind the performance levels achieved by cable and fiber technologies.

The FCC puts boxes inside the homes of volunteers across the U.S., who subscribe to a variety of service tiers from major ISPs, and runs standardised tests that mimic typical uses – web browsing and VoIP, for example – and measure peak and sustained speeds, data consumption and other performance related metrics. It then runs a series of calculations that show, among other things, how well ISPs are doing in actually delivering on advertising promises. The published results are national – you won’t be able to find out how your provider does locally.

Comparing sustained upload and download performance against advertised speed shows that Comcast, Cox, Mediacom, Verizon Fiber and ViaSat deliver sustained performance during peak periods that meets or exceeds the levels they sell to subscribers. On the other hand, Verizon DSL, CenturyLink, Frontier DSL and Windstream couldn’t even hit the 90% level. The rest fell somewhere in between.

Other tests showed similar results: cable and fiber are faster and more consistent than DSL. So, as far as the testing went, is satellite, but the one provider measured – ViaSat – was left out of some of the published results, in particular regarding the actual data consumed by its customers. More on that later.

It’s an interesting report and worth reading. The FCC makes all the processed and raw data available. I’m looking forward to going through that as soon as I can pull the gigabyte-class files down through my AT&T VDSL connection.

AT&T’s rural broadband solution makes satellite look cheap

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Something for everyone off the turnip truck.

As it shuts off new rural DSL connections, AT&T is talking up the wonders of its wireless service. It’s only going to get better if regulators allow it to take over DirecTv, at least according a statement the company filed with the SEC…

Today, many Americans in rural areas lack access to a high speed broadband service or have access to only one provider. With the cost synergies and increased revenue from this transaction, AT&T will expand its high speed broadband build to offer a competitive bundle of high speed fixed wireless broadband and satellite video service. We expect fixed wireless broadband to provide speeds of 10 –15 Mbps during peak periods with even higher maximum speeds during off peak times.

One tiny detail is missing: AT&T’s so-called fixed wireless solution, which is now rolling out nationwide, is actually based on its mobile network and sold at mobile prices. How much is that? $30 a month to hook up, then $100 for 10 gigabytes and $15 for every gigabyte over the cap, according to AT&T’s blog. Karl Bode at DSLReports.com dug a little further and writes that it can be had for prices that start at $60 for 10 GB, with extra GB costing $10 each. Not much better.

I’ve ripped ViaSat for trying to get subsidies from the California Public Utilities Commission to provide satellite-based Internet service to rural areas at $5 a gigabyte. And I still think that’s outrageous. AT&T isn’t asking for public money to expand its service area, but it is using political influence to try to block wireline competition and get permission to consolidate and protect its grasp on the U.S. market.

That’s an economic rent, no different than ViaSat’s bid for a direct cash subsidy. At twice the price, it’s twice as outrageous.

I got that completely wrong: satellite is allowed with a lower service hurdle by new Californian subsidy rules

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Satellite gets a boost, actually.

Contrary to what I posted yesterday, satellite-based Internet service providers would be eligible for broadband infrastructure subsidies from the California Advanced Services Fund (CASF) under new eligibility rules proposed earlier this month. In fact, the new language appears to makes it easier for satellite providers to qualify for CASF grants and loans. (H/T to Tom Glegola at CPUC for gently pointing out my error).

The draft decision, authored by commission president Michael Peevey, strikes out language now in effect that specifically includes satellite in the list of eligible technologies. The new text simply refers to “fixed or wireless facilities”, in the context of “the National Telecommunications and Information Administration’s (NTIA) definition of a facilities-based broadband service provider”, and then references that definition via a footnote. If – as I should have – I had read the technical appendix in the cited document, it would have been clear that satellite is simply considered one of many wireless broadband technologies.

Since the old specific language would be deleted and replaced by definitions that treat all wireless technologies alike, it arguably becomes easier for satellite service to qualify for CASF subsidies: satellite ISPs would no longer have to “prove functionality”. Although that term was not specifically defined, it could reasonably be interpreted as requiring satellite broadband to be as functional in terms of speed and, critically, data caps as terrestrial service. That standard, whatever it meant, would no longer apply.

My mistake was to ignore the footnote and assume that “fixed or wireless” meant fixed or mobile, because the CPUC’s mapping taxonomy sorts service providers into three categories: fixed (with subcategories of wireless and wireline), mobile and satellite. But it’s no defence to try to claim the language is vague – the footnoted NTIA document removes all ambiguity. The new wording is what matters. It overrides any assumptions based on the current program. Which I shouldn’t have made in the first place. My apologies for any confusion or consternation I caused.

Satellite companies barred from California broadband subsidies

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Update: Pay no attention to the post below. It’s absolutely wrong. Please see my correction:

I got that completely wrong: satellite is allowed with a lower service hurdle by new Californian subsidy rules

Sorry.


Shot out of orbit.

Satellite Internet service providers won’t be able to get subsidies from the California Advanced Services Fund (CASF), if the California Public Utilities Commission approves language buried deep in a draft of new rules governing the program.

I make no excuses: I missed it the first time I read through the draft decision written by commission president Michael Peevey and circulated for public comment earlier this month. On page 46 of the 103 page document, you can find…

The Commission will consider applications from satellite service providers provided that the applicants, are able to prove functionality, and are able to meet the speeds required.

What it means is that Peevey proposes to delete language from current CPUC rules that allow satellite companies to apply for CASF grants and loans to build broadband infrastructure. One such – ViaSat – asked for $11 million last year to pay for satellite dishes and receivers for a vast swath of western California.

I’ve already stated my case for why ViaSat’s specific proposal is a bad idea from a public policy perspective, given current CASF rules. There’ s a case to be made that some homes are never going to be reached by wireline or credible wireless service and some kind of allowance for satellite service ought to be made. But since the commission approved $1.8 million for fiber-to-the-vacation-shack service in Madera County last month, you can never say never.

Taking satellite providers off the CASF eligibility list is a rational step in the right direction. The goal should be fast, twenty-first century broadband service that isn’t subject to stingy and horrendously expensive data caps, for all Californians. The CPUC has a chance to make it right when it votes on the proposed change, currently scheduled for 5 February 2014. Public comments are being accepted, due on 27 January.

Tellus Venture Associates assisted with several CASF proposals in the current round, including some that are impacted by ViaSat’s proposal. I’m not a disinterested commentator. Take it for what it’s worth.

CPUC finds a legal way to treat ISPs as regulated phone companies

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CPUC sends a Schat across incumbents’ bow.

Buried in last week’s California Public Utilities Commission consent agenda was a resolution granting a certificate of public convenience and necessity (CPCN) to Schat Communications, an independent Internet servicer provider based in Bishop, on the eastern side of the Sierra Nevada. Schat applied for the CPCN in order to qualify for California Advanced Services Fund (CASF) grants for two proposed last mile projects in Mono and Inyo Counties.

CASF rules are different now, but back in February, an applicant either needed a CPCN or the mobile telephone equivalent or at least have an active application in front of the commission. Golden Bear, Bright Fiber, Surfnet and Viasat were in the same boat, with CPCN applications pending. If a telecoms company has a CPCN, it means that it is a “telephone corporation” and can be regulated as such by the CPUC.

To one extent or another, all five applications were held up as the CPUC struggled with an institutional history of regulating telephone companies rather than ISPs and a state law, passed last year that expressly forbids the CPUC from exercising control over Internet protocol services, including VoIP as well as pretty much any other broadband-based content or service.

Nearly a year later, Schat is the first one to convince the CPUC that what it does is sufficient for it to be regulated (and given CASF grants)…

Schat Communications argues that its intention to provide “middle-mile transport service” and manage a network consisting of “conduits, ducts, poles, wires, cables and other property” qualifies it as a telephone corporation, and therefore a public utility. Public Utilities Code §710 does not preclude our regulation of “non-VoIP and other non-IP enabled” services such as the middle-mile transport intended by Schat Communications. Therefore, we agree with Schat Communications that it is a telephone corporation, and therefore a public utility subject to our jurisdiction.

It’s good news for the other applicants. Even though the law has since changed, a CASF applicant with a CPCN still has considerable advantages. It also opens up some interesting questions about middle mile service providers – say, AT&T or Verizon – that are moving toward IP-based networks, partly for technical reasons but also partly to escape regulation. It might not be as easy as they seem to think.

Tellus Venture Associates assisted with several CASF proposals in the current round, including Surfnet and Bright Fiber, so I’m not a disinterested commentator. Take it for what it’s worth.

California broadband grant requests inch toward decisions

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California Public Utilities Commission (CPUC) staff have started drafting resolutions for funding at least some of the broadband infrastructure proposals submitted last February for subsidies from the California Advanced Services Fund (CASF).

The fact that staff is putting the necessary paperwork together – preliminary environmental assessments and public safety impact, for example – doesn’t mean that a project will rate highly enough to be recommended, but it does mean that the preliminary task of determining whether a project is eligible for CASF money is complete, or nearly so.

Active CASF applications, as of 18 August 2013.

The indication is that the projects that attracted the most protests from incumbent providers – Golden Bear and ViaSat are top of that list – are still in play but could be scaled back. Smaller projects have also been trimmed a bit, as applicants, incumbents and CPUC staff wrangle over whether the places being proposed for funding are truly under (or un) served.

If the Digital 395 project in eastern California gets the extra $10 million it requested a couple weeks ago, the total amount available for grants will be about $148 million. The big questions are whether the Golden Bear project will be funded and, if so, how much will it get. As originally proposed, it would have eaten up $119 million of the available money, but it’s looking likely that the size of the project will be scaled back and that it will, initially at least, be held to the 60% to 70% grant funding limit set by the CPUC, instead of the 90%+ requested.

With other proposals being trimmed too, the gap between requests and available money might narrow to the point that nearly all of the 26 currently active applications could get funded. And if the Golden Bear project is completely rejected, there should be more than enough for them all.

Tellus Venture Associates assisted with several CASF proposals in the current round, so I’m not a disinterested commentator. Take it for what it’s worth.