Competition heats up for broadband subsidies in the Californian desert

22 January 2016 by Steve Blum
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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.