Fabricated sales forecasts are a bad basis for handing out broadband “adoption” grants

4 January 2019 by Steve Blum
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The California Public Utilities Commission launched a new, $20 million taxpayer-funded broadband “adoption” program last year. It was included in the $330 million gift to Frontier and AT&T (and Comcast and Charter and…) that the California legislature approved in 2017. The CPUC isn’t setting a quantitative adoption target, and is simply acknowledging that “the number of subscriptions to broadband service has been growing annually in California and adoption will inevitably increase”. Instead, the program is built around digital literacy training, and free Internet access points and equipment.

The CPUC went through one round of adoption grant proposals this past summer. Changes to the program are proposed, based on lessons learned.

Even so, organisations still have to forecast the “number of new residential broadband subscriptions resulting from the project” in their grant applications and provide “a summary of subscriptions resulting from the project” in order to collect their money. That’s driven by the legislature – assembly bill 1665 requires the CPUC to report back on “the number of subscriptions resulting from the broadband adoption program” that’s paid for by the California Advanced Services Fund (CASF). The CPUC will look at other ways to measure broadband uptake, but demonstrating a causal link between that rising tide and CASF dollars is impossible.

The implication is that the more new subscribers an applicant forecasts, the better the chances of getting money, even though the CPUC’s guidelines don’t say that. At best, that approach will produce unobtainable estimates, at worst it’ll lead to fraud.

To make the program work, the CPUC should focus on credibility and reject applicants who give in to temptation and offer inflated sales projections. Instead, priority should go to applicants who are honest about their mission and have a verifiable track record of producing results based on the accepted criteria of their professions. A non-profit or government organisation that promotes its worthiness or measures its success on the basis of sales that have to be closed by others – by for-profit Internet service providers – should be viewed with skepticism, to put it politely.