Performance, not passion, builds broadband projects

Most of the opening and reply comments about expanding eligibility for California Advanced Services Fund (CASF) subsidies, my own included, can be summed up in three words: gimme, gimme, gimme.

Grant writers want to write grants, public agencies want to back fill budgets, independent ISPs want to play like the big boys and the big boys – telephone and cable companies – want to keep it for themselves. No surprise.

The road to broadband is paved with competence. Good intentions lead somewhere else.

Two organizations, though, pretty much make their living commenting on CPUC proposals: the Commission’s own Division of Ratepayer Advocates (DRA) and The Utility Reform Network (TURN). Both filed opening and reply comments, and although they came to opposite conclusions, their concerns were remarkably similar.

DRA opposes expanding eligibility for CASF grants and loans. They don’t like the idea of lowering the bar that applicants have to clear, “especially since such entities likely have no demonstrated expertise in telecommunications or in building broadband facilities.”

After reading everyone else’s opening comments, they were unimpressed with the focus on general benefits rather than concrete projects, noting “the overall lack of specificity underscores DRA’s cautions about opening up CASF eligibility and concern over these entities’ lack of technical expertise to implement broadband projects.”

It’s a good point, if unfairly broad. CASF exists to fund bad broadband business cases. Paying down the capital cost is only half the battle. It takes skill, creativity and experience just to cover operating costs in problematic areas. Good intentions and positive community vibes are not enough.

Many independent ISPs have that kind of managerial horsepower. The expansion of DSL and cable modem service coupled with the natural advantages of scale the big boys bring to the table have put many out of business. But the survivors are the smart and nimble ones.

It also makes sense to look to publicly owned utilities – municipal electric systems and water districts are two examples – for expertise and resources. With secure finances, existing customers, back office systems, skilled technicians, equipment and right of ways, bona fide publicly owned utilities have the kind of assets that can make a difficult business case achievable.

DRA’s closing advice is to recommend “added oversight and safeguards to help guard against fraud, waste, and abuse of ratepayer funds” if the Commission expands CASF eligibility. TURN has some ideas for accomplishing that. More tomorrow.