CPUC expands broadband subsidy eligibility, toughens requirements

It got a little harder to clear the bar today.

Local governments and independent Internet service providers can apply for broadband infrastructure construction subsidies from the California Advanced Services Fund (CASF), under new rules approved this morning by the California Public Utilities Commission.

There are pluses and minuses in the decision. On the whole, the commission is requiring these newly eligible application to meet requirements that are very similar to those imposed on regulated telephone companies, but without granting the same operational privileges – pole attachment and interconnection rights, for example. On the other hand, ISPs and local governments don’t have the burdens of complying with all the regulatory overhead – including allowing other carriers access to some of their own facilities – that goes hand in hand with that.

Today’s commission decision…

  • Requires local governments and independent ISPs buy performance bonds to guarantee any project that CASF funds.
  • Requires start-up companies (i.e. any provider that hasn’t been in the broadband business for at least a year) to have access to cash in the amount of 10% of a project’s cost, up to $100,000, a provision added in yesterday when the final draft was released.
  • Requires them to agree to be bound by CPUC rules and subject to its penalties if they don’t comply with the terms of a grant or loan.
  • Doesn’t differentiate between local governments and private companies in setting requirements, and doesn’t address the issues raised in that regard by The Utility Reform Network last month.
  • Adds back in a previously deleted requirement that satellite-based applicants “prove functionality”.

There’s still work to be done, though, before the commission can start taking CASF project proposals from non-traditional applicants, including how to implement a right of first refusal given to incumbents by the state legislature last year and figure out how to parse the additional restrictions that were placed on local government. That’s scheduled to be done sometime this summer.