Friday, November 02, 2012

California PUC rectifies its mischaracterization of Internet infrastructure subsidy fund

Several months ago, this blog called out the California Public Utilities Commission (CPUC) for incorrectly asserting the public policy goal of its program to subsidize the build out of Internet infrastructure in the Golden State was instead to encourage “the adoption of broadband.”

To its credit, the CPUC has rectified its gross misstatement of the law authorizing its $100 million plus California Advanced Service Fund (CASF). It did so this week, buried 18 pages deep into a proposed order that would loosen eligibility for CASF infrastructure loan and grant funding to include entities not holding a Certificate of Public Convenience and Necessity (CPCN) or a Wireless Identification Registration (WIR):

“We wish to make clear that although we propose to modify the CASF eligibility requirements to include both for profit and nonprofit broadband infrastructure providers, it is not our intent to change the focus of the CASF program. The CASF was created to fund the deployment of broadband infrastructure in unserved and underserved areas of the state, rather than the adoption of broadband services.” (Emphasis added)

The CPUC should also make it easier for consumer owned, community-based providers such as telecom cooperatives to access CASF funding for last mile (to the premises) Internet infrastructure construction – a critical infrastructure link singled out for attention in the proposed order. A key need of these providers is technical assistance grant funding to retain engineers and expert consultants to develop preliminary network designs and business case analyses. These deliverables would help ensure that the contemplated projects pencil out and would generate sufficient revenues to justify the prudent investment of CASF funds.

The CPUC should also revisit its unworkable, hair splitting exercise in futility of attempting to map out what neighborhoods are considered “unserved” and “underserved” based on throughput speed and census block groups. The inherent variation of legacy telco infrastructure Internet service from one address to the next doesn’t lend itself to these broad brush delineations. Internet service available at a given premise can be entirely different from another one just a quarter mile or a half block away.  Some overlap or "overbuilding" as it is called by incumbent providers will the inevitable consequence of progress.  But it must occur if the United States is to remedy what President Barack Obama decried in his State of the Union speech at the beginning of this year as the nation's "incomplete" Internet telecommunications infrastructure.  A network filled with holes does not a network make.

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