California PUC proposes supplementing US broadband stimulus funds

The California Public Utilities Commission has issued a proposed order that would allow it to supplement federal economic stimulus funds for broadband telecommunications infrastructure construction in unserved and underserved areas of the Golden State. Specifically, the proposed order would supplement $4.7 billion of the $7.2 billion broadband infrastructure stimulus funding to be distributed by the National Telecommunications and Information Administration's Broadband Technology Opportunities Program (BTOP).

In an apparent bid to leverage the BTOP funds, the CPUC would supplement the 80 percent BTOP grant subsidy with 10 percent of the total project cost -- amounting to half of the 20 percent funding match for BTOP grant recipients. That means 90 percent of the cost of approved projects would be subsidized by the combined 80 percent BTOP grant and 10 percent CPUC funding under the proposed order.

The CPUC funding would be allocated out of the regulatory agency's California Advanced Services Fund (CASF). Created in 2007, the $100 million CASF is funded by a surcharge on intrastate long distance calls. As much as $80 million of CASF funding remains unrewarded, according to the proposed order. A likely reason according to proceeding documents filed by CPUC staff late last year, is applicants balked at the requirement they put up 60 percent of project costs, complaining the CASF 40 percent subsidy is inadequate.

Those seeking the CASF funding must act quickly. Priority will be given to project applications received by July 17 -- about two weeks after the NTIA is to publish its own rules for allocating the federal broadband stimulus funding. According to the proposed order, the CPUC will make those awards in September. Applications for a second round of funding will be accepted from July 18 to August 14 with funds awarded in October. As per current CASF rules, priority will be given to unserved areas lacking broadband access.

Current CASF rules restrict funding to registered wireline and wireless providers. Whether others such as local government entities, nonprofits and cooperatives would be eligible for the CASF funding depends on the enactment of authorizing legislation, AB 1012, currently pending in the California Senate after breezing out of the Assembly May 28 on a 78-0 vote. If enacted, the urgency measure would take effect immediately. If it is, under the proposed order the CPUC would require these other entities to meet the same application requirements as wireline and wireless providers including maps of areas to be served and financial and technical information.