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.

California legislation would expand subsidy program

As the U.S. Federal Communications Commission considers retasking the Universal Service Fund that was originally formed to subsidize voice telephone service in high cost areas to advanced telecommunications infrastructure, California is considering urgency legislation to expand and make permanent its own similar subsidy program.

The California Advanced Services Fund (CASF) was established by the California Public Utilities Commission 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.

SB 1040 would leave the CASF in place indefinitely and expand its budget to $250 million with up to $25 million available in any given fiscal year. The urgency measure also liberalizes the use of CASF funds. To subsidize broadband infrastructure construction, $20 million would be allocated to grants and $3 million for loans.

One of the most important elements would be a new Regional Broadband Consortia Grant Account that earmarks $2 million in technical assistance grants to fund the cost of broadband deployment activities other than actual infrastructure construction. The money would be available to a wide variety of groups including local and regional governments, schools and colleges, health care providers, libraries and community-based organizations.

This is a critical element of the bill since many such entities that were interested in applying for broadband infrastructure grants and loans appropriated in the American Recovery and Reinvestment Act of 2009 lacked adequate funding to retain experts to help them with the engineering and business planning work needed in order to prepare project proposals.

A California Senate floor analysis of SB 1040 notes the Senate Energy, Utilities and Communications Committee was told at a Feb. 16 hearing that four percent of Californians - 1.4 million people in mostly rural areas, do not have access to broadband service. Only about half of Californians have Internet access at speeds meeting the CPUC's definition of basic broadband of 3 Mbs down and 1 Mbs up.

SB 1040 is advancing without opposition and would become law immediately after being signed by the governor. The CPUC would then open a rulemaking proceeding to implement the new CASF provisions later this year.

California PUC approves $7.9 million supplemental broadband stimulus funding for 9,000 square mile Central Valley wireless project

The California Public Utilities Commission today conditionally approved a resolution providing $7.9 million in supplemental funding for a major wireless broadband project requesting federal funding via broadband infrastructure subsidies allocated in the American Recovery and Reinvestment Act of 2009. The supplemental funding allocated from California PUCs' California Advanced Services Fund covers half of a 20 percent recipient match required under the National Telecommunications and Information Administration's (NTIA) Broadband Technology Opportunities Program and is contingent on federal funding approval.

The California Valley Broadband (CVB) project, proposed by a the consortium of Moreno Trenching Ltd, Mika Telecom Group and MT2 Telecom, LP, plans to build wireless infrastructure that will serve about 77,195 households in Fresno, Madera, Merced, Sacramento, San Joaquin, Solano, and Stanislaus counties. The consortium claims it will deliver Internet connectivity and VoIP over nearly 9,000 square miles at speeds of up to 20 Mbs on the download side and up to 6 Mbs uploads using two unregulated (WiFi) frequencies and one licensed (WiMAX) frequency "to accommodate range, terrain, tree and other interference issues."

The CVB project faced multiple challenges from incumbent telco and cable companies who claimed they already serve census block groups in the proposed CVB footprint. But PUC staff rejected the bulk of the challenged census block groups finding the incumbents didn't offer broadband as the California PUC defines it: at least 3 Mbs for downloads and 1 Mbs on the upload side.

It remains to be seen however how the NTIA will respond to protests the incumbents lodged against CVB's proposed project that is pending approval for the 80 percent BTOP subsidy.

In allowing incumbents to contest proposed broadband infrastructure projects in the first round of stimulus funding that closed last summer, both the NTIA and the Rural Utilities Services of the U.S. Department of Agriculture -- which is also distributing a portion of the broadband stimulus funds -- set the stage for an adversarial process that by implication would require the agencies to adjudicate contested applications. However, it's likely they are less able than the California PUC to carry out that function since the PUC can reference the state's broadband availability maps and has dedicated staff evaluating comparatively far fewer proposed projects.

Since putting in place a process to resolve applications contested by the incumbents and make findings of fact regarding whether the area of a proposed infrastructure project is underserved or unserved requires substantial time and resources, my guess is the two federal agencies simply put contested applications into a "hold" file while trying to figure out how to square the applications with incumbent telco/cable objections. That would explain why so many now impatient applicants haven't heard anything whatsoever after rushing to get their applications in by the first round funding deadline in mid-August of 2009 after having been initially led to believe they'd know by the year end holidays at the latest whether their projects were approved for funding.

This sets the stage for political blow back from federal and state representatives in areas where broadband stimulus projects in their districts are stuck in limbo after hearing from frustrated constituents asking them to expedite approval of their applications. The incumbents couldn't stop the broadband stimulus provisions from becoming law in the rush to enact ARRA one year ago. So they may instead opted to fend off threats to their territorial hegemony (remember, an incumbent telco/cable "service territory" doesn't mean everyone is served) in a "death by a thousand cuts" strategy to vector and shoot down stimulus applications one by one.

California PUC conditionally funds start up cooperative's middle mile project

The California Public Utilities Commission has demonstrated its support of start up telecom cooperatives -- entities this blogger believes play a crucial role in the rapid expansion of advanced telecommunications infrastructure in areas that are not sufficiently profitable for incumbent providers.

In a resolution adopted earlier this week, the CPUC agreed to fund 19 percent of the California Broadband Cooperative's planned open access wholesale middle fiber project along 448 miles of Highway 395 in the Golden State's Eastern Sierra area including the counties of Mono, Inyo, Eastern Kern and San Bernardino. Coop membership is open to local governments, institutions and Internet Service Providers.

The 19 percent funding level is beyond the 10 percent level the CPUC established in July in an effort to utilize its $100 million California Advanced Services Fund (CASF) to leverage $7.2 billion in federal subsidies for broadband telecommunications infrastructure allocated in the American Recovery and Reinvestment Act (ARRA). The CASF funding is contingent on the project being approved for ARRA funding.

In the initial round of ARRA broadband funding that closed in August, the National Telecommunications and Information Administration's (NTIA) Broadband Technology Opportunities Program (BTOP) generally required project grant applicants to put up a 20 percent funding match. In an effort to get more California projects funded, CASF kicked in half the match amount, bringing total project funding up to 90 percent. That left it to applicants to come up with the remaining a 10 percent match.

However, the California Broadband Cooperative noted as a start up nonprofit with no financial history it would find it all but impossible to come up with the 10 percent match for its proposed $101.4 million project under grant and loan subsidies for broadband infrastructure construction under the BTOP and the USDA's Rural Utilities Service (RUS) program.

Kudos to the California PUC for recognizing that alternative, nonprofit business models like cooperatives are needed in the quest to close the digital divide in California and that these entities face unique and substantial start up funding challenges. As the NTIA and USDA draw up new rules governing an upcoming and final round of funding for broadband infrastructure projects early next year, the agencies should keep the California PUC's action in mind.

California PUC approves subsidy for fixed WISP build offering 14Mbs symmetric service

The California Public Utilities Commission announced July 9 that it approved a 40 percent subsidy totaling $2.8 million from its California Advanced Services Fund for fixed terrestrial wireless infrastructure to provide broadband connectivity to more than 14,000 unserved premises in Alpine, Amador, Calaveras, Tuolumne, and Mariposa counties.

According to the CPUC resolution approving the project, it will be built over a 20-month period by Mother Lode Broadband and will leverage a regional network of existing mobile cellular towers reinforced with "expanded backhaul" -- most likely fiber.

The proposed throughput will blow existing WISPs -- both mobile 3G cellular as well as fixed premises providers -- clean out of the water. It's on a business class scale providing symmetric connectivity of "up to" 14 Mbs. There's no word on latency and Mother Lode Broadband is mum on what protocol -- WiMAX is a likely possibility -- that it plans to use. In addition, the CPUC resolution is silent on the technology that will make service this scale possible, only revealing it will employ "high capacity licensed spectrum."

Only time will tell if this is for real or simply more wireless vaporware. With the deployment planned over 20 months, there is a relatively large amount of that -- and probably too much for those 14,000 premises that needed broadband 10 years ago and are still stuck on dialup or sucking a satellite. "I'll believe the speeds when I see them," one skeptical Northern California industry insider tells me.

California issues updated "unclassified" state broadband availability maps

The California Public Utilities Commission has published updated versions of maps of broadband availability in the Golden State that were issued in early 2008 by Gov. Arnold Schwarzenegger's California Broadband Task Force.

There are two versions of the maps: "classified" versions accessible only to approved providers and "unclassified" maps that are publicly available and published online as .pdf files. The secret maps -- classified at the insistence of incumbent providers who don't want the public or potential competitors knowing exactly what they are providing (and more importantly, not providing) and where -- purportedly reveal street address level broadband availability organized by census block. The unclassified public maps by comparison show only the view from 60,000 feet and are sanitized via rasterization and the omission of key highway and road identifiers and town markers. This renders them nearly inscrutable to outsiders and consumers -- some of whom complain the maps exaggerate the boundaries of where broadband availabilty truly exists.

Notably, the two federal agencies administering the distribution of $7.2 billion of grant and loan subsidies to faciltiate the build out of broadband telecommunications infrastrucutre -- the Dept. of Agriculture's Rural Utilities Service (RUS) and the Commerce Department's National Telecommunications and Information Administration (NTIA) -- issued rules last week for the first round of funding requiring proposed projects include service area maps delineated by census block and posted on the federal government's Broadband Stimulus Portal.

When compared with the California maps, these newly created maps of proposed project areas may show where the broadband black holes really exist in a way the California maps do not.

California PUC adopts order aimed at leveraging federal broadband infrastructure grants

The California Public Utilities Commission announced July 9 it has adopted a proposed order designed to leverage and maximize California's share of $7.2 billion set aside for broadband infrastructure construction in unserved and underserved areas of the nation in the American Recovery and Reinvestment Act (ARRA).

The decision pertains to grants of up to 80 percent for such projects administered under the $4.7 billion National Telecommunications and Information Administration's Broadband Technology Opportunities Program (BTOP). It would cover half of the minimum 20 percent BTOP match required of those proposing broadband infrastructure projects, bringing the potential total combined federal/state subsidy level up to 90 percent for approved California BTOP projects.

The CPUC supplemental BTOP 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, of which about $80 million remains unspent.

Projects that qualify for the supplemental grant match will have to meet a higher minimum thoughput standard than under the BTOP. While the federal standard is just 768 Kbs for downloads and 200 Kbs for uploads, under CASF rules the minimum is 3 Mbs down and 1 Mbs for uploads.

While the current CASF rules restrict funding to wireline and wireless providers that have been certified by the CPUC, the decision contemplates making the CASF funding available to entities that aren't providers such as local governments and nonprofits. That would require legislative authorization under an urgency bill currently pending in the state Senate, AB 1555.

Lawmakers should approve this measure and sent it to Gov. Arnold Schwarzenegger. California cannot rely exclusively on providers to close the digital divide and build out badly needed broadband infrastructure; local goverments and telecommunications cooperatives need to be part of the solution.

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.

Amended legislation would put CPUC in charge of broadband stimulus funding

As the Sacramento Bee reported Tuesday, California -- embarrassed by its extensive patchwork of broadband black holes in a state that prides itself as an information technology leader and the home of Silicon Valley -- is angling for $1 billion of the $7.2 billion in broadband infrastructure subsidies in the federal economic stimulus package.

Undecided however is which California entity would be in charge of doling out the money -- assuming the two federal agencies administering the funds ultimately decide by next month to channel it through the states rather than accepting funding applications directly.

Would it be Gov. Arnold Schwarzenegger's chief information officer as the governor initially suggested? The California Public Utilities Commission? Or the California Emerging Technologies Fund, a nonprofit to increase broadband deployment and adoption formed and funded as a condition of recent telco M&A activity?

Legislation pending in the California Assembly was amended May 5 reflecting the recommendation of the state Legislative Analyst that the CPUC be in charge of the stimulus funding. You can link to the measure, AB 1012, here.

California PUC sets March 23 public meeting re broadband funding in federal stimulus act

The Schwarzenegger administration is preparing to request some of the $7.2 billion earmarked for broadband telecommunications infrastructure subsidies and loans in the recently enacted federal economic stimulus legislation.

The governor's office has asked the California Public Utilities Commission as well as the nonprofit California Emerging Technology Fund (CETF) to get stakeholder input on how best to use the CETF and the CPUC's California Advanced Services Fund (CASF) as vehicles to "quickly target initial federal stimulus funds toward California." The goal is also to determine how to leverage California’s existing broadband programs to assist applicants seeking federal funding available for broadband infrastructure in the stimulus bill.

The CPUC has set a public hearing for March 23 in San Francisco.
"We seek input from a broad spectrum of interests, including broadband providers, public agencies, and consumer groups," the CPUC's notice states.

California PUC approves broadband subsidies for 9 Northern California, Central Valley communities

The California Public Utilities Commission last week approved 40 percent subsidies for wireline broadband infrastructure build outs to 1,262 households in nine Northern California and Central Valley communities.

The $728,093 in funding for the projects comes from the CPUC's California Advanced Services Fund, which is funded by a surcharge on intrastate long distance telephone calls.

Here's the CPUC's press release.

Tensions erupt between telcos, cablecos over over California broadband build out subsidy levels

As recently reported on this blog, California's incumbent telcos are bitching to the California Public Utilities Commission, complaining a 40 percent subsidy to underwrite the cost of building out broadband infrastructure to areas of the state lacking adequate access under the CPUC's California Advanced Services Fund (CASF) isn't likely to be enough for many potential projects.

Now the griping has turned into a contretemps between some of the biggest players and Comcast has jumped into the fray. In comments filed Nov. 19 on the eve of a CPUC hearing today to consider restructuring the CASF, Verizon criticizes AT&T's suggestion the 60 percent provider match be abandoned, warning it could lead to too much state funding of some projects.

In its Nov. 19 comments filed with the CPUC, cable provider Comcast takes issue with AT&T's "incredible" suggestion that the CASF fully subsidize some projects and Verizon's proposal that the CASF share be increased up to 80 percent for selected projects. The cable company warns the higher CASF funding threshold would be contrary to the CASF's goal of funding only projects that are economically viable.

AT&T's suggestion that CASF provide 100 percent funding for selected high cost projects in unserved areas "is truly outrageous, particularly coming from AT&T," Comcast said in its filed comments. "The CASF was not set up to be a slush fund to cover 100 percent of the costs of the largest ILEC in the state."

Less than enthusiatic response to California broadband build out subsidy program

A key recommendation of California Gov. Arnold Schwarzenegger's Broadband Task Force to build out broadband Internet infrastructure in the Golden State is getting a less than enthusiastic response from the state's incumbent telcos.

In comments filed last week with the California Public Utilities Commission (CPUC), which is considering expanding eligibility for 40 percent project subsidies to a wide variety of organizations and local governments, both large and small Incumbent Local Exchange Carriers (ILECs) complain the 40 percent subsidy is too low to make it worthwhile to invest in infrastructure for high cost areas currently unserved or underserved by broadband providers. They call on the CPUC to abandon the fixed 40 percent subsidy and instead award amounts based on the cost of the project.

The CPUC's internal Division of Ratepayer Advocates (DRA) is also calling on the CPUC to revamp the subsidy program, the California Advanced Services Fund (CASF). "The general paucity of bidders for CASF funding" and just six ILEC-proposed projects submitted for funding to date "suggests that the Commission’s anticipated advancement of broadband availability and competition is not bearing fruit," the DRA stated in its filed comments in the CASF proceeding. "While the factors that have led to this outcome are unclear, what is clear is that one of the Commission’s goals for the CASF – encouraging a diversity of advanced technologies and service providers – is unlikely to be met unless there is a critical review of the CASF, as it is currently structured and administered."

The DRA also recommends against allowing municipalities and other entities that are not under the CPUC's jurisdiction from proposing projects because the CPUC would have to enforce compliance with CASF funding requirements through the courts.

The six ILEC-proposed projects to bring wireline-delivered broadband unserved areas to be considered by the CPUC at its Nov. 21 meeting total just $372,976 in requested CASF funding.

The largest of the six proposals is by Verizon California and seeks $174,000 to serve 382 housholds in the Pinyon Crest area of Riverside County. AT&T has proposed four projects in both northern and southern California, including what is arguably a token effort to bring broadband to two residences in the Mount Wilson area of Los Angeles County.

Only one of the proposed projects meets original CASF project criteria of being capable of providing at least 3 Mbs downloads and 1 Mbs uploads -- one by Frontier Communications to provide service for 171 households in the Lake Almanor area of Plumas County.

CLECs fear loss of access to copper loops being retired and replaced with fiber

Competitive Local Exchange Carriers (CLECs) established under the federal Telecommunications Act of 1996 that requires Incumbent Local Exchange Carriers (ILECs) to sell them access to their copper cable loops apparently fear the copper is literally about to be pulled out from under them and replaced with fiber, leaving them without access to their customers.

An organization of California CLECs, the California Association of Competitive Telecommunications Companies (CALTEL), petitioned the California Public Utilities Commission to adopt rules requiring ILECs to obtain advance approval from the CPUC before retiring copper loops and replacing them with fiber and demonstrate doing so would be in the public interest.

The CPUC declined, instead requiring ILECs to notify the CPUC and all CLECs interconnected with their copper plants before replacing copper with fiber. In addition, ILECs must engage in "good faith commercial negotiations" CLECs that want to purchase or lease the copper loop, the CPUC said in a Nov. 6 news release.

"I believe that this decision balances state and federal goals of promoting the deployment of broadband networks against the interests of competitors to retain access to the copper loop," Commissioner Rachelle Chong stated in the news release.

ILECs have long chafed under the line sharing requirements of the 1996 federal reform law and have dragged their feet and litigated with CLECs seeking to connect to their lines. Apparently CLECs now fear ILECs are about to use their ultimate weapon to make them go away for good, rendering them irrelevant by replacing their copper with fiber since they don't have to provide CLECs access to their proprietary fiber under a 2006 U.S. Court of Appeals ruling.

But ILECs have largely resisted employing the fiber strategy on CLECs since it requires them to make substantial investments in upgrading their wireline infrastructures that they have been reluctant to make. It's possible ILECs are now concluding doing so is worth it because it both disposes of pesky CLECs while also enabling them to exclusively offer far more advanced IP-based services that can be more reliably delivered over fiber than copper.

It will be interesting to watch how this plays out in California and other states and whether CLECs will bid on telco copper loops made obsolete by fiber. Probably few will since copper does not provide a future growth path for offering advanced services due to its technological limitations as have been painfully illustrated with the limited range and throughput of DSL over copper. In addition, aged copper loops are likely to be a low repair priority for ILECs, making it difficult for CLECs to provide reliable service. This could be the beginning of the end for CLECs.

California PUC considering expanding eligibility for broadband build out subsidies

The California Public Utilities Commission is soliciting comment on potentially expanding eligibility for 40 percent grant funding from its California Advanced Services Fund (CASF) to build out broadband infrastructure in unserved and underserved areas of the Golden State. The commission has set aside $100 million for qualifying projects to be funded over a two-year period, paid for by a 0.25 percent surcharge on end-users’ intrastate telephone bills.

Proposals to serve unserved areas were due July 24 and underserved areas by Aug. 25. Only entities with a certificate of public convenience and necessity to offer telecommunications services or those registered with the CPUC provider of wireless telecommunications services were eligible to submit project proposals by those dates. The CPUC is now considering accepting proposals from municipalities, community-based cooperatives, Native American tribes as well as funding economic development corporations to issue loans to finance projects.

"We further anticipate significant unserved and underserved areas will remain after grant of the current pending applications," CPUC's Oct. 15 ruling states. "During our first round of applications we received significant interest from serious potential applicants who were uncertificated internet service providers in areas geographically close to unserved or underserved areas."

ISPs target remote areas of Northern California for state subsidized broadband infrastructure

A review of broadband infrastructure projects filed by the July 24 soft application deadline for 40 percent buildout subsidies from the California Advanced Services Fund to service unserved and underserved areas of the state shows nearly all of the proposed projects are located in Northern California. Most are in ZIP Codes and census tracts in North Coast counties and heavily concentrated in remote Sierra Nevada counties.

The providers -- whose identities remain under wraps until the close of the application process being overseen by the California Public Utilities Commission -- have apparently chosen to deploy outside of metro areas where they believe they could face near term competition from the telco/cable duopoly. That unfortunately means for those mired in broadband black holes where telcos and/or cable companies have limited, incomplete broadband infrastructure in parts of metro area counties such as the Sierra Nevada foothill counties of El Dorado and Placer and portions of Silicon Valley, relief doesn't appear likely anytime soon from one of these subsidized ISPs. In El Dorado County alone, for example, the California Broadband Task Force identified more than five dozen communities that aren't provided any wireline broadband services -- and that's not counting the numerous broadband black holes adjacent to U.S Highway 50.

Providers seeking the CASF funding were allowed to propose either wireline or wireless broadband projects providing minimum throughput of 3 Mbs down and 1 Mbs up.

Update 9/3/08: The CPUC has released ZIP Codes, Maps and Census Block Groups for proposed projects filed by the Aug. 25 soft deadline that would build out broadband infrastructure to underserved areas, which the CPUC defines as those where broadband is available but no facilities-based provider offers service at asymmetrical speeds of at least 3 Mbs for downloads and 1 Mbs on the upload side.

As with the proposals for unserved areas, defined as defined those not served by any form of facilities-based broadband, or where
Internet connectivity is available only through dial-up service or satellite, the vast majority of the proposed projects for underserved areas are situated in Northern California. This latest batch of proposals is heavily concentrated in Sierra Nevada and Sierra Nevada foothill counties including Toulumne, Mariposa, Amador and Calavaras counties.

Verizon Wireless harvests AT&T residential customers stuck in broadband black holes

While big telcos AT&T and Verizon don’t compete on wireline-based broadband services and stay out of each other’s service areas, that anti-competitive strategy does not apply to wireless broadband.

In Northern California, for example, Verizon has expanded its wireless broadband footprint and AT&T announced this week it would counter with a $290 million expansion of its wireless system in Northern California and Reno, Nevada. Both are based on Third Generation (3G) wireless technology and are primarily targeted to mobile wireless customers rather than fixed residential users.

But some residential customers mired in AT&T’s large broadband black holes created by its incomplete wireline infrastructure are turning to Verizon’s wireless broadband plans offering advertised speeds of 600 Kbps to 1.4 Mbps for downloads and 500 Kbps to 800 Kbps for uploads. For them, it’s an easy choice over impractical early 1990s era dial up or substandard and costly satellite service.

AT&T isn’t likely to offer a superior alternative in terms of speed and usage caps (Verizon offers a 50Mb per month plan for $40 and a 5Gb plan for $50 with overage charges for exceeding the limit). Plus Verizon Wireless requires two-year contracts, which would dissuade subscribers from switching to AT&T.

If AT&T wants to protect its residential customers who don’t have wireline-based broadband from signing up with Verizon Wireless or convince them paying an early termination fee is worthwhile, it will have to do what it should have done years ago and expedite an upgrade and expansion of its wireline infrastructure to offer what the California Public Utilities Commission deems as true broadband providing minimum speeds of 3Mbs for downloads and 1Mbs uploads.

If on the other hand AT&T merely matches with a service at or slightly less comparable to Verizon Wireless Broadband without leveraging its wireline infrastructure to more widely offer true broadband service, it will once again be a day late and dollar short and leave unearned revenues on the table.

Comcast applies for California video franchise

Comcast has joined cable providers Cox, Time Warner, Charter and Wave Broadband in applying for a statewide franchise with the California Public Utilities Commission under the Digital Infrastructure and Video Competition Act that took effect in early 2007.

Comcast's Dec. 12 application can be viewed on the CPUC's Web site.

California PUC allocates $100 million as broadband build out incentive

The California Public Utilities Commission announced it has formed the California Advanced Services Fund (CASF), allocating $100 million in matching funds for 2008 and 2009 to encourage broadband providers to bring service to unserved and underserved areas of the state. In order to qualify, providers will be evaluated on a broadband throughput benchmark of 3 Mbps download and 1 Mbps upload and would also have to offer Voice Over Internet Protocol (VOIP) service.

The CPUC said the funds will come from a .25 percent surcharge on telephone bills, estimated to be five cents a month for an average customer. The CASF surcharge will be offset by an equal reduction in the California High Cost Fund-B surcharge created to subsidize deployment of basic voice telephone service.

One year ago, your blogger suggested the administration of Gov. Arnold Schwarzenegger direct the CPUC to reform the five funds in California's Universal Service Fund program including the High Cost Fund-B -- which together received a total of $2.8 billion since 2003 to serve more than 7,600 designated high-cost areas -- to help speed the deployment of high speed Internet access in higher cost areas of the state.

The CPUC action sets a deadline of June 2, 2008 for submission of CASF funding requests. Consideration will be technology neutral and applicants will be required to provide a minimum of 60 percent matching funds as a prerequisite for consideration of their applications.

The CPUC decision finds that broadband infrastructure is critical to the economic health and welfare of the state and that "ubiquitous deployment of broadband holds tremendous opportunities for consumers, technology providers, and content providers, and is important to the continued health and economic development in California."

"Today's decision signals that this state is not content to sit around waiting for federal action to bring broadband to every part of our state," said CPUC President Michael R. Peevey. "We encourage every broadband provider in California to be a part of the solution for ending the digital divide in our state and participate in the CASF process."

As with other state-based broadband build out initiatives, the question is whether funding in the millions is sufficient to result in a meaningful expansion of broadband considering that in California and other states, the existing metal wire line based infrastructure is increasingly obsolete for the deployment of advanced telecommunications services and requires billions of dollars of investment to bring it up to date.

Here are links to the decision implementing the program and related proceeding documents.

California PUC receives several franchise applications from cable providers

The California Public Utilities Commission has received several new applications for broadband video franchises from cable companies. Among the new applicants are Charter Communications and several of its operating units as well as Seattle-based Northland Cable Television.

Time Warner Cable, which was issued a franchise in October by the California PUC, also submitted several new applications for subsidiary operations in the state.

Verizon, which received a franchise earlier this year, filed an amended application reflecting an expansion of its service area in Southern California.

The applications can be viewed at the CPUC's Web site by clicking here.