Raise subsidy limits for social, economic impact says CPUC president

23 February 2014 by Steve Blum
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Opportunity to add value.

Limits on money from the California Advanced Services Fund (CASF) are not written in stone, according to CPUC president Michael Peevey. Late Friday, he proposed lifting the cap – 60% to 70%, depending on broadband availability – that commissioners previously set on CASF grants, at least for a middle mile project in the Salinas Valley proposed by Sunesys LLC, a dark fiber company.
The alternate resolution text that Peevey is asking his colleagues to approve says…

The Commission recognizes that a higher level of CASF funding may be needed for Sunesys to undertake the project. The Commission therefore approves 83% CASF funding of the project costs of $13,300,000 or 90% of the pro-rated adjusted total project cost of $12,253,606, because at this higher percentage funding, Sunesys will be able to charge a lower price for its fiber strand which in turn will keep prices to the last mile customers at reasonable rates. Moreover, Sunesys will offer this price for a period of five years rather than the required two years.

It’s a very nice price: $1,550 per fiber pair per month for the entire 91-mile length of the project, or $8.50 per mile. According to Peevey’s draft, Sunesys typically charges $60 to $65 per mile.
The justification for popping the cap is the huge economic and social benefit that cheap middle mile fiber would bring to the Salinas Valley, where unemployment rates can top 20%, education is dire and poverty rates are high. 16% of the people in Monterey County live below the poverty line and they are concentrated in Salinas Valley towns like Soledad, Chualar and Gonzales, where the fiber would run.
The vote by the California Public Utilities Commission has been rescheduled to 27 March 2014.