CPUC to incumbents: upgrade broadband by April or else

27 May 2014 by Steve Blum
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New draft rules for governing the California Advanced Services Fund (CASF) were released today by the California Public Utilities Commission. If approved, incumbent telephone and cable companies would be given a hard and short deadline to upgrade existing service areas, or face the prospect of competition from CASF-funded independents.

The CPUC is implementing a law passed last year by the California legislature that added $90 million to CASF and allowed independent Internet service providers and local governments to apply for grants and loans to build new broadband infrastructure, albeit under tight restrictions. Until the change was made, only traditional telephone companies – which includes competitive carriers certified by the CPUC – could get CASF funding.

Among those restrictions is a requirement that broadband companies that serve a given area be given the opportunity to upgrade – with or without subsidies – before independents can get CASF cash to build there. If approved by the commission, the new rules would give incumbents 3 months to exercise that right of first refusal, with a deadline of 1 April 2015 to finish work and begin offering service that meets the CPUC’s minimum of 6 Mbps download and 1.5 Mbps upload speed.

The joker in the deck, though, is that there’s no penalty specified for incumbents who promise to upgrade and then fail to follow through. The CPUC holds some power over traditional telcos – AT&T and Verizon, for example – but effectively none at all over cable companies like Comcast. The danger is that a bogus promise could simply stall CASF applications until next April, rather than spark actual infrastructure improvements.

If the draft is approved at the CPUC’s meeting on 26 June 2014, the first round of CASF grant and loan applications will be due on 1 October 2014, with successive rounds every three months. If you want to submit comments on the proposed new rules, the deadline is 11 June 2014.