Assuming there aren’t back channel conversations going on, there seems to be something like a consensus forming around draft rules proposed for subsidising broadband facilities and marketing programs in public housing in California.
Earlier this month, the California Public Utilities Commission released recommendations for spending $20 million on upgrading broadband infrastructure in public housing and $5 million on programs to encourage residents to subscribe to and use Internet services. The money was part of a grand deal made last year to top up the California Advanced Services Fund and expand eligibility – at least in theory – to independent Internet service providers and, to an even more limited extent, local governments.
Yesterday, four organisations – the California Emerging Technology Fund, TURN, Valley Vision and the CPUC’s office of ratepayer advocates (ORA) – filed comments on the plan. Rather than the horrified response earlier ideas produced, the comments mostly fiddled around the edges, suggesting tweaks to the plan rather than wholesale overhauls.
The most contentious point is the idea of allowing CPUC staff to approve grants based on particular criteria, rather than going through the commission’s formal – and lengthy and costly – decision making process. The original thought was to set the limit for expedited review at $500,000 per grant – which is what provoked the horror from ORA – but the latest draft scaled that back to $75,000. ORA let the lower figure slip past without comment; the others urged higher amounts. Whatever the final number, the apparent consensus on cutting red tape is what counts – there’s at least a hope of a fast and rational decision making process at this point.
There’s one more round of comments, then the next step will be writing draft rules to be considered by the commission. With luck, the program could be approved and in motion by the end of September.
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Over the past few days, I’ve written several posts about what I characterise as FCC chairman Tom Wheeler’s muni broadband posturing. I don’t think anything good or useful will come of it. In a comment on yesterday’s post though, Christopher Mitchell, a muni broadband advocate, asked a very relevant question, which I will boil down to: so what?.
It’s a fair question. I take Robert Heinlein’s maxim as axiomatic: Certainly the game is rigged. Don’t let that stop you; if you don’t bet, you can’t win. But that doesn’t mean you have to accept every dodgy gambit – you’re still playing to win.
If you want to keep or – depending on where you are – restore local options to pursue broadband projects, consider three dangers of significant investment in Wheeler’s game…
- Near term: the odds of winning at the state level are far better than in Washington, and time wasted there is better spent closer to home. That’s a Californian’s perspective, though. If it seems truly hopeless somewhere else, maybe you’ll conclude differently. But don’t think relying on the FCC’s lobbyist-in-chief is the easy way out. The choice is which option – state or federal – is less hopeless.
- Middle term: Wheeler floated his muni broadband balloon as a distraction from the net neutrality proceeding. He’s driving toward an outcome that overwhelmingly favors big cable and telephone companies, and wants to divert attention by dangling the prospect of locally run networks as a counterweight. But he has no intention of usefully following through. For further reading, check out Three Card Monte.
- Long term: adding a federal layer of rules and regulation – whether by FCC mandate or congressional action or court rulings or, mostly likely, all three – will tilt the muni broadband battle towards the side with the most lawyers and lobbyists. You won’t get anything from congress and neither the FCC nor federal courts will find a useful right to muni broadband somewhere in the penumbra of existing law.
Ignoring Wheeler’s muni broadband shuffle has its own dangers – anything that actually comes of it is likely to be harmful. But that makes it a threat which should be treated as such. It is not an opportunity.
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If you like the idea of cities and other local agencies encouraging broadband development and deciding to go into the business themselves – as I do – then FCC chair Tom Wheeler’s talk about sweeping away state-level restrictions is sweet music to the ears.
The City of Chattanooga certainly enjoys the tune. It filed a petition with the FCC on Thursday, asking it to override a Tennessee law that prevents it from expanding its fiber-to-the-home network.
Muni broadband advocates seem to assume that Wheeler will issue an order along the lines of “states shall not restrict muni broadband”. Something clean and clear, that leaves no room for legal ambiguity or weaseling by lobbyists.
That’s a bad assumption.
Wheeler has delegated Internet policymaking – in particular, regarding network neutrality – to his
fellow lobbyists former colleagues. To him, leadership is a matter of bringing the best-heeled lobbyists into a room and working out a deal that everyone can live with. Any muni broadband edict from the FCC will be vetted through that process.
The likeliest result will be a high-sounding declaration that proclaims the liberation of muni broadband while hobbling it with conditions and circumlocutions that cable and telephone company lobbyists can cheerfully exploit to stall projects, perhaps forever.
And if that proves insufficient to the needs of deep-pocketed incumbents, all they need do is go back to the FCC for another friendly conversation, as the National Conference of State Legislatures has pointed out. The messy business of arguing in front of state legislators or local officials will be gone.
As hard and as frustrating as community broadband battles are in Sacramento, local agencies and advocates can get in the fight and score victories. Once it moves inside the Beltway, we’re out of it. I’d rather be in a game we can occasionally win than one we’re locked out of from start.
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One of the (apparent) revelations in the arguments Comcast submitted to the FCC in support of its proposed take over of Time-Warner Cable and a market consolidation swap with Charter Communications is that it is not going to give up even a tiny piece of California. I guess we should feel flattered.
When the market swap was announced in April, the plan was for Comcast to add all of Time-Warner’s and all of Charter’s cable systems to its extensive California holdings, except for the Lake Tahoe area. Which made sense from a media perspective. Charter is strong in northern Nevada, and particularly in Reno, which is the center of the television market that includes Tahoe. That simplifies marketing, customer service, retransmission negotiations and a whole range of other day to day jobs.
But something trumped operational efficiency. Last month, Comcast sent a letter and supporting documents to the FCC trying to explain why the grand three-way bargain would be good public policy. (I missed it at the time, h/t to Jim Warner at UCSC for the pointer). Included in that filing was a map that gave more details on the markets Comcast and Charter would be swapping.
Not only is Comcast hanging on to the systems it already owns, it’s also hoovering up the Charter systems on the California side of the border. Northern Nevada, though, stays with Charter. Political, regulatory and jurisdictional issues outweighed economic and operational rationality, it appears.
The reason could be as mundane as tax considerations and bureaucratic paperwork, but the cost of nurturing sympathetic politicians in Sacramento is something that Comcast is already paying, and Charter would no doubt like to avoid. Along with an estimated 80% share – near-monopoly level – of the cable market in California, Comcast would also be in a position to buy undivided loyalty in our state capitol.
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The City of Chattanooga formally asked the FCC yesterday to throw out a Tennessee state law that prevents it from extending its fiber-to-the-home network to surrounding areas. In doing so, the city is asking FCC chairman Tom Wheeler to make good on his high-sounding rhetoric about pre-empting state restrictions on municipal broadband.
The filing is a goldmine of information. The petition itself was written by muni broadband legal expert Jim Baller, and the attachments provide a wealth of case study material on the Chattanooga project specifically, and the history of muni broadband regulation and legislation in general.
Baller makes a plausible, if circuitous, case for allowing the FCC to tell states how to allocate power amongst subordinate agencies, such as cities. As Baller has previously said, regarding another muni broadband case, the U.S. supreme court has established and applies a “traditional rule of statutory construction that federal statutes cannot be read to preempt a fundamental state power unless Congress makes it its intent unmistakabl[y] clear”.
This time, Baller says, congress wanted the FCC to be able to do whatever it thinks necessary to open up broadband markets…
Congress’s grant of broad authority to define the relevant terms, standards, and remedial approaches — limited only by the constraint that the Commission act “in a manner consistent with the public interest, convenience, and necessity” – reaffirms that Congress did not intend to tie the Commission’s hands in removing barriers to broadband investment and competition like the territorial restriction in [the Tennesse law].
There’s a difference, though, between telling a state what to do and micromanaging the way it does it. If Wheeler cowboys up (and I’m not betting on it) and the FCC grants Chattanooga its wish, it’ll be up to federal courts to sort it out.
You want to cancel? Squirt a few first.
Comcast’s senior management had a mommy/daddy moment this week. On Monday, COO Dave Watson sent a memo to employees saying basically that the viral recording of a Comcast customer service rep browbeating a subscriber who wanted to cancel was a wee bit over the top, but hey, we understand…
The agent on this call did a lot of what we trained him and paid him — and thousands of other Retention agents — to do. He tried to save a customer, and that’s important, but the act of saving a customer must always be handled with the utmost respect.
He wrote about about how important it is to listen and be sensitive to customers. Doggone it kids, we can do better. Here’s your juice box.
Then yesterday, daddy-in-chief Brian Roberts spoke to Wall Street analysts and said, yeah, but we’re getting results…
We firmly believe that our operating improvements are rooted in providing customers a better experience. And while we are making progress with better service tools and online tools and improved service levels, we are also very cognizant that there is ample room for further improvement and this is a top priority for us.
We do feel confident that there are measurable improvements in the experience we are offering customers, this includes faster broadband speeds, best in-home Wi-Fi, more content choices on more devices and what we believe is the best user interface and guide experience in the market and maybe in the world.
Translation: what that CSR-from-hell said was what we told him to say, and what we’re still saying and that’s why we’re making beaucoup bucks. His mistake was to get caught, and we’re making damn sure that never happens again.
Comcast has an aggressive culture and attitude, remarkably so even for a major corporation. That was highlighted yesterday in a letter to the FCC from the California Emerging Technology Fund that documented the abusive way in which the company treats low income families in California. It’s time to take a hard look at whether it’s in the public interest to give Comcast near-monopoly control of the California cable market.
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“Fool me once, shame on you, fool me twice, shame on me.”
The California Emerging Technology Fund and a long list of affiliated groups want the FCC to force Comcast to live up its own commitments, if the proposed merger with Time-Warner Cable and the market swaps with Charter Communications are approved. In a letter to the commissioners and supporting documents, CETF blasts the way Comcast has handled a program – called Internet Essentials – it claimed would give $10 per month Internet service to low income families with children…
In 3 years, Comcast has signed up only 11% of the eligible households in California and the nation. That is 35,205 households in California out of more than 313,000 eligible families. At that rate, it would take another decade for Comcast to reach just half of the currently-eligible population…
In the first 3 years, the program has been riddled with problems, including 8–12 week waits before getting service, credit checks on customers in violation of advertised program rules, a non-working online sign-up system, and customer representatives who give out wrong or inconsistent information.
Sleazy practices include signing up only the eldest child in a household, so eligibility will end years sooner, upselling poor families into more expensive packages, and telling callers – erroneously – that they can’t get Internet Essentials unless they have a social security number and are willing to hand it over to Comcast.
The poor performance of Comcast CSRs should come as no surprise to anyone who listened to the audio recording posted last week of the customer service phone call from hell. The flood of comments and condemnations that followed it made it clear that it was Comcast’s smash mouth customer service policy that was at fault, not some hapless employee.
Internet Essentials is a good program, in theory. It was originally offered as a way to grease the skids for Comcast’s purchase of NBC Universal, and then extended when the Time-Warner was announced. Its failure to run the program in good faith, as documented by CETF, points to the futility of relying on Comcast’s promises, though. I’m glad CETF is asking the FCC to include stricter oversight as a condition of any merger, but a better question is whether Comcast is fit to control 80% of California’s cable market. There’s no point to offering a second chance.
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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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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.