Salinas Valley fiber optic project gets CPUC support, but final vote postponed

Click to see presentation.

“I think this is a great project and I want to see it happen”, said commissioner Michel Florio, as the California Public Utilities Commission discussed an $11 million proposal to build a fiber optic backbone down the Salinas Valley. “I drive through that areas regularly. I know the geography, it’s the 101 corridor. It is in many respects a low income area”.

But he wasn’t completely sold on the numbers, questioning the length of time it would take for the applicant, Sunesys LLC, to see a return on its investment in the project, if 83% of the construction cost was subsidised by the California Advanced Services Fund (CASF). By one reckoning it would take 5 years for Sunesys to start showing a profit, which, to Florio, indicated that the subsidy level might be too high. Other estimates went as long as 12 years, depending on the assumptions made.

Earlier in the meeting, Gonazales mayor Maria Orozco and city manager Rene Mendez spoke passionately about the benefits the project will bring to the Salinas Valley – I’ll have more on those comments tomorrow. CPUC staff also walked commissioners through a presentation outlining the project and the logic behind the higher level of funding that commission president Michael Peevey proposed. Normally, CASF subsidies are limited to 60% to 70% of infrastructure costs.

He agreed with Florio’s request to postpone a vote for two weeks to the 10th of April, in order to see if money might be saved. “I’m not interested in any wholesale hatchet job on the costs here, I think we can use a scalpel”, Peevey said.

Florio reiterated his overall support for the project, and seemed confident ultimate agreement on the details was possible. “I hope everyone can sharpen their pencils and shave this back a little bit”, he said, and come up with a plan that’s “not quite as rich but still gets the job done”.

Tellus Venture Associates assisted with several CASF proposals in the current round, including the Sunesys project, so I’m not a disinterested commentator. Take it for what it’s worth.