California gets a zonk from the FCC’s new broadband subsidy program

4 February 2020 by Steve Blum
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The final language of the Federal Communications Commission’s decision to launch a new broadband subsidy program could cause headaches in California. The FCC approved the new $20 billion Rural Digital Opportunity Fund (RDOF) program last week, apparently with eligibility rule changes to the draft version published earlier in January.

In remarks prepared for the meeting, commission Geoffrey Starks flagged new language that would exclude places that are getting broadband subsidies from other sources…

I cannot support provisions of the Order that penalize the many states that have made their own investments in rural broadband deployment. The version of the Order now before us excludes from RDOF any area that the Commission “know[s] to be awarded funding through the U.S. Department of Agriculture’s ReConnect Program or other similar federal or state broadband subsidy programs, or those subject to enforceable broadband deployment obligations.”

The good news, if you want to call it that, is that California doesn’t have any conflicts with the USDA’s ReConnect program so far, because none of that money has been awarded here. But California does have “state broadband subsidies” and “enforceable broadband deployment obligations”.

Assuming those restrictions are in the published version of the decision – FCC procedures allow some changes even after a vote – the precise language will be important. Particularly for rural communities where an Internet service provider received money from the California Advanced Services Fund (CASF) to build low-speed infrastructure.

For example, the California Public Utilities Commission awarded several CASF grants to Frontier Communications to upgrade a few ageing DSL systems, so it could offer service at a minimum of 10 Mbps download and 1 Mbps upload speeds. That’s painfully slower than the FCC’s new eligibility standard of 25 Mbps down/3 Mbps up, and decades behind the subsidised service levels – up to a gigabit – that the FCC is incentivising. Frontier also has some vague and equally atrocious “broadband deployment obligations” that date back to its purchase of Verizon’s wireline telephone systems in California.

We’ll have to wait for the official version of the decision, before we know whether the FCC gave monopoly model incumbents the means to block broadband upgrades in rural California.