TURN for the better, but not the worse among CASF hopefuls

by Steve Blum • , , , , , ,

The Utility Reform Network (TURN) likes the idea of making California Advanced Services Fund subsidies available to more than just traditional telephone companies. But not to just anyone, saying “TURN shares the Commission’s concerns…that ratepayer money used to fund the CASF program must be protected from waste, fraud and abuse.”

The Commission’s Division of Ratepayer Advocates (DRA) echoed those concerns, calling for safeguards if CASF eligibility is expanded.

TURN’s answer is to apply the standards set by the CPUC three years ago when it gave CASF matching grants to successful applicants funded by the federal stimulus program (ARRA). It was done under a special exemption granted by the California Legislature.

The CPUC’s solution at the time was simple. All CASF applicants would meet the same qualifications and pass the same background check that traditional telephone companies have to endure when they apply for a Certificate of Public Convenience and Necessity (CPCN).

The existing CPCN application process requires the applicant to demonstrate its financial, technical and managerial competence by submitting information such as the company’s balance sheets proving its liquidity and biographical information on its management team demonstrating sufficient management experience and expertise to operate as a telecommunications provider. The applicant is also required to comply with the California Environmental Quality Act (CEQA)…CPCN applicants are also required to submit information relative to background considerations on the business, its principal owners, and managers to enable the Commission to conduct a background check.

The Commission also required applicants to post a performance bond, submit to financial audits as needed and generally follow CPUC rules, particularly ethics requirements.

Half a dozen ARRA projects were eventually funded in part by CASF, with and without CPCNs. Based on the CPUC’s latest report, none of those have been completed. So there’s no definitive track record to point to yet. But there’s no reason to think they’re doing any worse than traditional telephone companies or that they won’t be able to keep to the schedules established by ARRA.

Digital 395 is one of those projects, and they weren’t able to even begin construction until this past summer because of the challenge of meeting the (sometimes conflicting) regulatory requirements imposed by twenty three separate agencies. Not least of which is CEQA compliance, which is integral to the CASF program. They’re still on track to finish by next summer’s deadline.

Traditional telephone companies are not the only game in town. Many private companies and public agencies are equally solvent, competent and experienced. On the other hand, many are not and the Commission has the tools in hand to weed them out.

TURN is absolutely right to conclude that “a reasonable, rigorous process can in fact deliver results and lead to enhanced availability of broadband.”