ViaSat becomes a regulated telephone company, sorta

by Steve Blum • , , , ,

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.