CPUC considers FTTH upgrade subsidy for Marin County town

3 May 2018 by Steve Blum
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Bolinas, a coastal community of about 700 homes in Marin County, is up for a $1.9 million broadband infrastructure subsidy from the California Public Utilities Commission next week. It’s the first grant proposal submitted to, and considered by, the CPUC since assembly bill 1665 was signed into law last year by governor Jerry Brown.

AB 1665 imposed severe restrictions on how money from the California Advanced Services Fund (CASF) can be spent. It lowered California’s minimum broadband standard to 6 Mbps download/1 Mbps upload speeds – if service is available at that level, then the legislature reckons no upgrade is needed. It also fenced off areas where incumbents, mainly AT&T and Frontier Communications, are getting federal subsidies, and allowed them to block grants in other parts of their service territories at will, unless they’re getting the money themselves.

The Bolinas Gigabit Network cleared all those hurdles, at least according to the draft resolution posted by the CPUC: there’s no broadband service available at 6 Mbps down/1 Mbps up, AT&T isn’t getting federal subsidies to serve the 600 homes (out of 700) that will benefit, nor did it exercise its jus primae noctis right of first refusal and preempt the project.

It’s also an exceptional project. According to the Bolinas Community Public Utility District, it’s “one of the largest…and densest communities which remains under- and un-served for broadband in rural California”. Its population is relatively well off – $74,000 annual median household income, versus $64,000 statewide – and exurban.

The character of the community led the company behind the project – Inyo Networks – to project that 80% of homes will subscribe to fiber to the home service, costing $90 per month for a symmetrical gigabit (a household with a child in a low income school lunch program can get 25 Mbps up/down for $30 per month). Whether that take rate is plausible is a fair question, but it does underline the rare, if not unique, circumstances of the project.

(The post AB 1665 CASF rules are still being written. It’s possible that higher income areas won’t be eligible or will have a lower priority in the future. But for now, a community’s wealth, or lack thereof, is not an established criterion).

In rural areas of California, the federally subsidised carveouts that Frontier and AT&T received are scattered about in checkerboard fashion. Finding a CASF-eligible area with a population that’s sufficiently dense and affluent to support an independent upgrade, and a local company with the resources and track record to implement it is a needle-in-a-haystack job.

Needle or not, Bolinas deserves due consideration, under current standards and rules. Delivering equal service to the haystack, despite AB 1665, is the CPUC’s true challenge.