Draft CPUC decision offers money to RDOF winners, but conditions present problems for most

14 December 2020 by Steve Blum
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Almost final rules for topping up federal broadband subsidies with money from the California Advanced Services Fund (CASF) were published on Friday. The draft decision, authored by CPUC commissioner Martha Guzman Aceves, tracks with the most recent “kicker” program proposal floated by California Public Utilities Commission staff.

The big question remains: will it have any practical effect? The Federal Communications Commission’s Rural Digital Opportunity Fund (RDOF) auction is over. The kind of broadband service providers the CPUC hoped to attract with its kicker program – gigabit-class fiber to the premise operators with open access business models and a commitment to low income and universal service obligations – are not well represented on the list of auction winners.

The original intent was to put money on the table ahead of the auction, so the right kind of providers could factor the CASF kicker into their bidding strategies. Some might have, but the confusion and obscurity that surrounded the proposed rules and the CPUC’s complex – and unnecessary – pseudo-judicial decision making process led most to discount, or completely disregard, the value of any notional kicker money.

Most of the RDOF money awarded in California is going to eight companies that are primarily wireless Internet service providers (WISPs). The draft decision doesn’t rule out the possibility that wireless facilities qualify as “gigabit-capable network infrastructure”, but instead says “technologies will be evaluated by staff considering relevant technical standards and deployment information”, presumably independently of any final determinations made by the FCC. WISP technology and business models are not easily adapted to the draft’s open access requirements either, although there’s a loophole that would allow them to open up middle mile infrastructure while keeping last mile facilities closed. Participation in the CPUC’s lifeline program or taking on “carrier of last resort” obligations could also be problematic for WISPs.

Of the remaining seven, one is a satellite company – SpaceX – that can’t qualify as a gigabit provider, and two are cable companies – Charter Communications and Cox Communications – that have never embraced any definition of open access infrastructure (although if the prospect of a CASF kicker incentivises them to do so, it would be money well spent).

The two incumbent telcos on the list – Frontier Communications and Cal-Ore – might be able to squirm through the open access loophole and tick all the boxes. Two other winners – Hunter Communications and an anonymous consortium member that might be Anza Electric Co-op – should be able to do likewise. Frontier won subsidy rights for 15,000 homes and businesses and the other three claimed 3,000 more. That represents 5% of the RDOF subsidised homes and businesses in California (and 6% of the money awarded), although the total number of locations could climb if those companies tack on adjacent areas that didn’t qualify for federal bucks, as the draft decision would allow.

The soonest the CPUC can take a vote on the proposed decision is at their 14 January 2021 meeting.