Wednesday, October 06, 2010

Ratepayer advocate urges reform of California subsidy fund

The Division of Ratepayer Advocates (DRA) of the California Public Utilities Commission (CPUC) recommends an overhaul of the CPUC's California Advanced Services Fund (CASF). The fund was established in December 2007 to subsidize advanced telecom infrastructure in high cost unserved and underserved areas of the state. Up to $100 million was allocated from a 25 percent surcharge on intrastate long distance calls, with the CASF surcharge offset by an equal reduction in the California High Cost Fund-B surcharge created to subsidize deployment of basic voice telephone service.

DRA's Sept. 13 petition was filed 12 days before California Gov. Arnold Schwarzenegger signed into law urgency legislation that would extend the CASF to 2013 and appropriate an additional $125 million to the fund.

DRA wants the following reforms implemented:

• Transparency. Applications for CASF funding should be open to the public and subject to a public comment process.

• Affordability/Adoption. The program should cap monthly rates at affordable levels for at least two years, prohibit installation or connection charges, and require funding recipients to demonstrate how they will ensure that customers adopt and can afford their broadband offerings.

• Speed. The CASF minimum speed should mirror the FCC's 4/1 standard except in rare cases.

• Cost control. CASF projects should not exceed benchmark per-household costs based on what it costs in the market to install broadband.

• Open access. The Commission should require all CASF recipients to share their networks with third party providers.

• Audits. The Commission should audit each CASF funding recipient and allow public access to audit data.

DRA's petition can be viewed here.

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