New season for broadband infrastructure subsidies in California

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It’s time to close the door on the last round of applications for broadband construction subsidies from the California Advanced Services Fund. Of the 32 proposals submitted on 1 February 2013 – nearly a year and a half ago – 17 were funded for total of $48.6 million in grants and $127,000 in loans. The final two were approved by the CPUC in June – an FTTH project in Mono County and a fixed wireless system in Shasta County.

Twelve proposals didn’t make it, for a variety of reasons. Some were pulled because of competitive upgrades from incumbent service providers, others either didn’t have a ready-for-prime-time application with a supportable business case and/or valid eligibility claim, or were bumped in favor of another applicant for the same area. The total ask on the rejected projects was $170 million.

That leaves three projects, totalling $29.1 million in grants and loans still on the table, and still under review. Two of those – ViaSat at $11 million and Bright Fiber at $17 million – have run into a buzz saw of challenges from incumbent providers. The third one – a DSL upgrade in Madera and Fresno Counties proposed by Ponderosa – is relatively modest at $945,000 but has likewise stalled in the review process.

With the CPUC’s approval of a new timeline and rulebook for the CASF program, the next round is underway. The next application window will open on 1 December 2014, but it will stay open until the money runs out – when an application is submitted is relatively unimportant. All that matters is when it’s finally approved by the commission. Whether by design or default, the 3 unresolved applications have, for all practical purposes, been bumped into the next round.

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If you’re wondering how much it costs to use existing poles and conduit, it’s public information

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The most difficult and costly part of any wireline broadband infrastructure project is getting cable from point A to point B. There are two primary ways of doing it: stringing it on poles or running through buried conduit. Since the chances of getting permission to build a new pole route in California is only slightly better than the odds of getting approval to drill for oil in San Francisco Bay, your only independent alternative is to start digging, at the rate of $30 to $60 a foot or more.

But public utilities in California do not operate completely independently. That’s good news if you have the seal of approval from the California Public Utilities Commission, otherwise known as a certificate of public convenience and necessity. That piece of paper gives you the right to go to other (older) utilities, like PG&E or AT&T, and force them to let you use their poles and conduits. Up to a point, anyway. If there’s no space available, then it’s generally up to you to pay the cost of making room, which can be quite high if poles have to be replaced or new duct work installed.

Even so, the contract terms that regulated utilities impose on each other are, to a large extent, regulated and publicly disclosed. Jim Warner at UCSC has taken the trouble of hunting down several of these contracts and posting them. As he explains…

Regulated utilities with access to public right-of-way must share resources with other utilities. Rates are established in contracts that also set other terms of sharing. Underground duct rents for about $1 per foot per year. Right to attach a cable to a phone or power pole is about $5 per pole per year. I have a collection of contracts with rates.

Which is right here, although I’ve pasted the links he’s gathered to date below as well. Happy reading.

  • Sonic and AT&T, 2010
  • IP Networks and AT&T, 2010
  • Pioneer Telephone and AT&T, 2010
  • Summary of rates charged by AT&T to dozens of companies, 2011
  • Plumas Sierra Telecommunications and AT&T, 2012
  • Summary of rates charged by AT&T to dozens of companies, 2012
  • Summary of unbundled rates charged by AT&T to dozens of companies, 2012
  • Fireline Network Solutions and AT&T, 2013
  • AT&T trenching terms – who pays – 2013
  • Suddenlink and AT&T, 2013
  • Suddenlink and AT&T, 2013
  • AT&T’s stand-alone structure access agreement for poles, conduits and rights-of-way, 2013
  • PG&E’s standard overhead facilities license, 2007
  • PG&E fee schedule for wireline attachments to distribution poles, 2014
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    Six Californias are really one conversation piece

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    The Six Californias campaign had some good news and some bad news for its supporters. The good news is that it gathered 1.3 million signatures in its petition drive – half a million more than the number necessary to get it on the ballot. The bad news is that the proposal to split our state six ways won’t go to a vote in November. Instead, the initiative’s backers intentionally slipped the 26 June deadline for filing the petitions – the advice they gave to circulators was to mail signatures back by 7 July.

    Assuming that there wasn’t massive fraud or illegible handwriting involved – and of course, the professionally aggrieved have already filed complaints to that effect – Californians will have a chance to vote on the plan in November 2016. Which means we’ll have more than two years to talk about it.

    That’s the main purpose – I believe – behind the drive. The proposal is not going anywhere, even if voters approve – the measure is riddled with suicide pills. But it will be healthy for Californians to have an existential debate. Contrary to what the petition claims, our state is not ungovernable. Execution isn’t exactly optimal, but the mechanism of Californian governance is functional. The problems with the actual operation of it – starting with the trump card of campaign cash – are likelier to be multiplied by six than subtracted from the equation if we split apart. And California isn’t exactly an aberration in that regard.

    North or south, east or west – we have common interests as Californians. Let’s not miss this opportunity to discover it.

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    Independent ISPs have a shot at California public housing broadband program

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    Fast, focused, low cost and sustainable projects are the answer to the problem of how to extend modern Internet access into publicly supported housing. That’s the conclusion of a report prepared by California Public Utilities Commission staff that lays out recommendations for implementing assembly bill 1299 – approved last year – which spends money from the California Advanced Services Fund on broadband facilities and marketing programs in public housing.

    The report carefully draws boundaries. Inside wiring and networking equipment would qualify for CASF subsidies, backhaul fiber installed out in the street gets squat. In theory. CASF money is only part of the business plan – the capital expense part – so applicants have to have a long term operations plan…

    Staff recommends the Commission award grants and loans to finance up to 100 percent of the installation costs, but not maintenance or operation costs. Additionally…staff recommends that the Commission require grantees to maintain and operate the network for five years after receiving Commission funding.

    Operating networks is not a sweet spot for public housing authorities or non-profits. That’s a job that independent Internet service providers know best. Unfortunately, ISPs won’t be eligible to get the money directly – that’s written into the law – but there will be an opportunity to work with public housing operators, which are eligible.

    The report includes a long list of other recommended requirements and restrictions, including technical specifications. The commission is taking comments on the report until 28 July 2014, and rebuttals for ten days after that. The next step is a formal draft resolution that will lay out the rules in detail, which will go through the same comment/reply cycle before the commission votes on it. If all goes to plan – but don’t plan on it – the program will be in place by the end of September, setting up a December application window.

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    Benicia fiber deal puts industrial broadband plan into action

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    The City of Benicia is working with Lit San Leandro LLC (LSL) to bring a gigabit-class fiber network to the Benicia Industrial Park and the adjacent Arsenal area. That’s the top line from a status report I gave to the Benicia City Council this evening.

    Benicia issued a request for proposals last year, asking interested service providers to submit ideas for delivering industrial and commercial-grade broadband service. Among the resources the City put on the table was $750,000. The most attractive proposal – for a full fiber network – was submitted by LSL. Since then, both the City and LSL have been working on solving key challenges, such as how to connect the local network to long haul fiber and Tier 1 data centers.

    LSL identified several potential solutions, and is working on more detailed plans. Parallel to that, the City and LSL will be negotiating a formal contract, which will be brought back to the City Council for approval, likely in the next two or three months. After that, LSL can begin construction.

    The preliminary network design includes a loop through the central core of the Benicia Industrial Park, with spurs serving the Arsenal area just to the south and the periphery of the park.

    I helped the City develop the RFP, evaluate the proposals and get to the point where a tentative agreement is in place with LSL. The work was based on a report I did last year for the City, which looked at alternatives for meeting the broadband needs of current BIP tenants and businesses that might be considering moving there.

    If all goes to plan, the Benicia project will be LSL’s second metro fiber network, the first being in San Leandro – another project I assisted with.

    Downloads:

    Benicia industrial broadband status report, presentation to the Benicia City Council, 15 July 2014

    Request for Proposal, Benicia Industrial Broadband Project, 30 September 2013

    Benicia Industrial Broadband Project Assessment presentation, made to the Benicia City Council by Steve Blum, 2 July 2013

    Benicia Industrial Broadband Project Assessment report, prepared by Tellus Venture Associates, 24 June 2013

    Benicia City Council minutes, 2 July 2013

    Staff report to Benicia City Council, 2 July 2013

    Broadband Needs Assessment for the Benicia Industrial Park, prepared by Successful.com, 15 September 2010

    Map of Benicia Industrial Park and surrounding area

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    Only telephone companies can take part in rural broadband experiments

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    The FCC today released the full details on the rural broadband experiments approved by the commission on Friday. Of legal necessity, the program is limited to regulated telephone companies, although independent ISPs can either partner with one or go through the process to become one.

    Eligibility is pretty much what was expected, with one new twist. The money can only be given to “Eligible Telecommunications Carriers” (ETCs) and projects have to include voice service and meet all the rules that pertain to it. But non-ETCs can apply to take part in the experiments and get the designation later. Usually, ETC designations are made by state regulators, such as the California Public Utilities Commission, but the FCC is leaving the door open to making such a designation itself, if a state regulator takes more than 3 months to make a decision.

    In that case, though, it’s not yet clear (to me at least, but I’m not a lawyer) that a company would need to first have a certificate of public convenience and necessity (CPCN) from a state regulator (in other words, officially be a regulated telephone company) or if the FCC would preempt that too. It’s an important detail because just getting a CPCN in California can take a year or more.

    Winning bidders – and the FCC considers this to be a bidding process – will be picked on the basis of a quantitative cost-effectiveness model, with extra credit for projects that are restricted to tribal lands. The FCC also expects “to select a diversity of projects in terms of geography and technologies”. A total of $100 million is available…

    • $75 million (with a max of $20 million per project) for networks capable of delivering 100 Mbps down/25 Mbps up and with at least 25/5 on offer to all customers within the project area. The FCC’s order talks about it in the context of fiber-to-the-premise, but doesn’t limit it to that. Presumably, beefed up VDSL or Docsis 3 cable modem service would qualify too. Pricing and data caps have to be comparable to similar wireline plans in urban areas.
    • $15 million for projects that offer a service plan of at least 10 Mbps down/1 Mbps up. That’s a service level that’s often associated with AT&T’s Uverse upgrades on ageing rural copper systems, for example. But fixed wireless and hybrid experiments are also encouraged. The service plan has to allow at least 100 gigabytes of monthly traffic with latency no greater than 100 milliseconds and be reasonably priced, by comparison to FCC benchmarks. The maximum subsidy per project is $7.5 million.
    • $10 million, also for 10 Mbps down/1 Mbps up, but specifically earmarked for what the FCC considers to be “extremely high-cost census blocks”. Same specs otherwise, except there’s wiggle room on latency and satellite proposals are allowed. The per-project limit is $5 million.

    There is a long list of detailed requirements and qualifications for bidders. I won’t try to summarise it – if you’re interested in applying, it’s best to slog through it yourself. The CPUC previously posted some very helpful information for interested applicants, including maps of eligible areas. Bids are due in 90 days.

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    Expert opinion: Internet companies play the cards as dealt, dammit

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    Pew Research asked more than 1,400 people it considers to be experts in Internet philosophy about what they think the future holds. The businesses that built the Internet are killing it, they said…

    While there is no one definition of Net neutrality, it is generally expressed as the idea that the best public network should be operated in such a way as to treat all senders and receivers of content as equally as is technologically possible while maintaining information flows well. Corporate goals to serve customers and shareholders can be in conflict with this.

    The chief counsel for a major foundation wrote, “Collusive and anti-competitive practices by telecommunications operators threaten the re-creation of an Internet controlled by people.” A post-doctoral researcher wrote, “We are seeing an increase in walled gardens created by giants like Facebook and Apple … Commercialization of the Internet, paradoxically, is the biggest challenge to the growth of the Internet. Communication networks’ lobbying against Net neutrality is the biggest example of this.”

    I probably shouldn’t disagree with 1,400 experts. But what the hell. They are pointing to a genuine problem, but then misidentifying the source of it. Businesses – successful ones, anyway – are competitive and they will play whatever game they find themselves in to the max. That’s what they’re supposed to do.

    The problem is that someone else writes many of the rules they compete under. Communications networks aren’t hiring lobbyists because they’re commercialised. They hire lobbyists because that’s how you play the game in Washington (and Sacramento and city hall and…). A game that was, in the final analysis, designed by political interests.

    Internet companies were fiercely commercial from the very beginning. What’s changed is the degree to which politics, rather than microeconomics, determines winners and losers. To be sure, there are many big Internet companies, and big groups of small companies, that have enthusiastically fed that trend. But they didn’t create it: it was there to be stoked.

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    Californians with better Internet infrastructure have a better life, and vice versa

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    Bling is no substitute for bandwidth.

    Statewide quantitative research done by the Field Poll on behalf of the California Emerging Technology Fund shows that most Californian adults – 86% – use the Internet “at least occasionally”. Most – 75% – have some kind of Internet access at home. But the way they access the Internet at home is also a good predictor of mainstream status.

    Nearly all adults between 18 and 29, or with a college degree, or making $60,000 a year or better have Internet access at home. The numbers released by the Field Poll, however, suggest that those are the people who, overwhelmingly, have a fixed connection at home – DSL, cable, fixed wireless, satellite or similar. The 75% breaks down into two groups: 67% with fixed, in-home service and 8% relying on smartphones with mobile connections. And there’s a big difference between those two groups, according to the research…

    The 8% of California adults using a smart phone as their sole means of connecting to the Internet at home include many of the same subgroups reporting lower than average access to broadband Internet connectivity at home. These include Spanish-speaking Latinos, non-citizens, adults who have not graduated from high school, and residents whose annual household income is less than $40,000.

    Mobile Internet service providers can’t be blamed for poverty or other demographic factors, of course. And the fact that poorer Californians are more likely to rely only on mobile service shows that Swiss Army Knife product and service bundles are a rational compromise for people on a restricted budget. But the bottom line conclusion is equally clear: Californians who have fixed Internet access are enjoying the bounty of the Golden State, and those who don’t, aren’t.

    Mobile broadband is good, but not sufficient. Infrastructure matters.

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    No progress made in closing California’s digital divide

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    If you’re a Californian who’s college age or even just a twenty-something, or you’re any age at all and you have a college degree, or if you’re making $60,000 or more a year, then it’s almost certain you’re on the Internet. If that’s not you, then not so much.

    That’s the conclusion of a Field Poll conducted for the California Emerging Technology Fund that put some harder numbers on the digital divide here. The research, released today, showed that that core demographic groups – young, educated and/or making a reasonable living – are over the 95% mark in terms of Internet adoption. Given that much of the 4% or 5% remainder can be characterised as being in some sort of transition – between jobs, say – there’s not much practical room for improvement there.

    But if you’re not among the blessed, it’s a different story. If you’re a Californian who didn’t graduate from high school, then it’s a 50/50 proposition whether you’re on the Internet. Do you speak Spanish and not English? Only a 60% chance. A senior citizen? 1 in 3 chance you’re on the wrong side of digital divide. It’s even worse if you’re not a citizen, or a naturalised citizen, or disabled, or making minimum wage – less than $20,000 a year.

    Overall, 86% of Californians over the age of 18 are online, at least to the extent that they “use the Internet at least occasionally”, and 75% have access at home. That’s good news, but only to an extent – the home access number hasn’t changed over the last year, the millions of dollars being spent trying to boost it notwithstanding.

    The divide has a technological fault line as well: most Californians who have Internet service at home get it via some kind of fixed connection. But a sizeable minority – 8% – rely just on mobile service. And the demographics of the mobile-only homes look a lot like those with no service at at all. More on that tomorrow.

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    Digital 395 fiber draws a last mile crowd in eastern California

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    Faster residential and business broadband service – including gigabit-class fiber-to-the-home service in some communities – is following in the wake of the Digital 395 project, an open access middle mile fiber link from Reno down through eastern California to Barstow. The California Public Utilities Commission just approved a $4.7 million grant proposed by Race Telecommunications to build FTTH systems in four small Mono County communities using the Digital 395 backbone.

    The areas around Aspen Springs, Chalfant, Crowley Lake and Sunny Slopes should see upgraded service in the next couple of years. Race is committing to offering residential service at set rates for at least 2 years, starting at $25 per month for 25 Mbps down and 15 Mbps up and ranging to $150 per month for 1 Gbps down and 100 Mbps up. The commercial rate card is higher – $60 for 25/15 and $200 for 100/50 – but the same, the resolution says, as what Race charges at the Mojave Spaceport, another CASF-funded project.

    Two other project proposals, also leveraging Digital 395 connectivity, had been been submitted by Schat Communications, an Internet service provider based in Bishop, but were ultimately turned down by the commission. Schat asked for a combination of grants and loans from the California Advanced Services Fund totalling $3.8 million to build a WiMAX network, with fiber links to Digital 395, over a wider area of Mono and Inyo Counties, including the areas sought by Race.

    Last year, the CPUC awarded CASF grants to Race for FTTH projects in Boron and the Tehachapi area. Two other proposals, for California City and Mojave, were pulled after Charter Communications upgraded its network in those communities.

    The Race projects aren’t the first to take advantage of Digital 395. The bandwidth delivered by that system was quickly leveraged by SuddenLink last year, when it boosted speeds – up to ten-times – for existing customers in Mammoth Lakes at no extra charge.

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    Recent posts

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    \n\nThe most difficult and costly part of any wireline broadband infrastructure project is getting cable from point A to point B. There are two primary ...
    \n\nThe Six Californias campaign had some good news and some bad news for its supporters. The good news is that it gathered 1.3 million signatures in it...
    \n\nFast, focused, low cost and sustainable projects are the answer to the problem of how to extend modern Internet access into publicly supported housi...
    Click for the full presentation.\n\nThe City of Benicia is working with Lit San Leandro LLC (LSL) to bring a gigabit-class fiber network to the Benicia ...
    Eligible areas in the California, per the CPUC (click to get a bigger map).\n\nThe FCC today released the full details on the rural broadband experiment...
    \n\nPew Research asked more than 1,400 people it considers to be experts in Internet philosophy about what they think the future holds. The businesses t...
    Bling is no substitute for bandwidth.\n\nStatewide quantitative research done by the Field Poll on behalf of the California Emerging Technology Fund sho...
    \n\nIf you’re a Californian who’s college age or even just a twenty-something, or you’re any age at all and you have a college degree,...
    \n\n\n\nFaster residential and business broadband service – including gigabit-class fiber-to-the-home service in some communities – is following in th...

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