CPUC considers giving broadband subsidy priority to low income areas

16 February 2018 by Steve Blum
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One-third or more of broadband infrastructure subsidies would go to low income areas, if the California Public Utilities Commission adopts new rules proposed by staff for the California Advanced Services Fund (CASF). Although the draft rewrite published on Wednesday by commissioner Martha Guzman Aceves is just the starting point for a debate that won’t be resolved until the end of the year, it is consistent with comments that she and other commissioners have made on many occasions.

The proposal sets aside at least $100 million of the $300 million pumped into CASF by the California legislature for last mile broadband projects in low income areas. It would raise the funding amount for projects from the current 60% to 70% of construction costs, to 100% in low income areas and 80% elsewhere, and allows some operating costs to be subsidised as well.

An area would be considered to be “low income” if the median household income is less than $49,200 per year.

Many of the other proposed changes are taken directly from assembly bill 1665, which was effectively written by telco and cable lobbyists, and then passed by the California legislature and signed into law by governor Jerry Brown last year. Middle mile projects – such as the Sunesys project in the Salinas Valley and Digital 395 in easter California – would be banned, areas where AT&T and Frontier Communications receive federal subsidies would be roped off, and incumbents of all kinds would be able to block independent competition by claiming jus primae noctis a right of first refusal.

The proposed new rules also change the way projects are developed. Broadband companies would still be able to come up with their own projects and submit grant applications, but the CPUC could also identify high priority projects on its own initiative and issue a request for proposals, which any private service provider could respond to.

The CPUC will hold a series of public workshops throughout California to discuss the proposed changes to the infrastructure subsidy program, and will accept written comments until 16 April 2018.

Scoping memo and ruling of assigned commissioner, Martha Guzman Aceves, CASF program changes, 14 February 2018

Appendix C, CPUC staff proposed changes for broadband infrastructure grant, line extension and regional broadband consortia programs