California: Use bonds for public utilty, consumer coop-owned fiber to the premise telecom infrastructure as stimulus

Don’t expect an economic stimulus package using state tax money.States can’t print dollars like the feds can. President Trump and Congress will do all the stimulating. But (California Senate President pro tempore Toni) Atkins and (Assembly Speaker Anthony) Rendon want to tap into infrastructure bonds that have already been authorized by voters and quickly push the borrowed money out into job-creating projects. There’s $42 billion in unsold bond authorization.

Source: Newsom wields California executive power amid coronavirus - Los Angeles Times

That bonding capacity should be tapped to fund public utility and consumer coop-owned fiber to the premise telecom infrastructure as an economic stimulus initiative. Not only would doing so directly create jobs; it would also provide a boost to California's knowledge and information economy. Particularly as its constituents rely on advanced telecommunications services to work at home and especially those in Northern California counties lacking good infrastructure. They need robust and reliable connectivity only fiber can offer.

California proposes 3-day backup power for cell towers, communication networks - SFChronicle.com

California proposes 3-day backup power for cell towers, communication networks - SFChronicle.com: “It’s important to remember that one size does not fit all when it comes to network management during an emergency,” AT&T spokesman Jim Kimberly said in an email. “Adding 72 hours of backup power could mean adding large fuel tanks or multiple refrigerator-sized cabinets in the middle of communities, which in many areas is simply not feasible. A combination of fixed and mobile solutions is what is needed.”

Kimberly is right re fixed solutions. Residential fiber connected to premises backed up with premise generators and batteries would provide one such solution. That would require AT&T to rapidly change out its aged legacy copper outside plant to fiber -- something it should have done decades ago -- and consider placing in underground conduit in high wildfire risk areas to increase suvivabilty. Also, to offer both business and residential fiber service. In some of its Northern California service territory, AT&T has deployed fiber to business customers but does not offer fiber service to nearby residences.

Patient pension capital funding for FTTP could be game changer

The modernization of America’s legacy twisted pair copper plant to fiber to the premise (FTTP) has been inhibited – described by observers as “stalled” and “stalemated”– by the conservative, risk averse business models of large investor owned players that require relatively rapid and assured returns on capital investment while also paying generous shareholder dividends. Several years ago, Verizon scaled back its FTTP deployment. In 2016, Google Fiber paused new deployments. AT&T hit the brakes on its FTTP deployments this year at the same time voters and policymakers want to press the gas pedal.

The sluggish progress has prompted localities to seek alternative business models that can more rapidly build FTTP infrastructure serving all and not just some premises along with rising demand for greater reliability and better value. The task isn’t easy. State and local governments and their taxpayers still feel the trauma of the economic crisis a decade ago. They’re thus risk averse when it comes to taking on debt or assessing new taxes. If localities are to build FTTP infrastructure and operations and maintenance, they will have to investigate new financing models that require less public funding.

One that is emerging and bears watching is localities partnering with operators of open access FTTP networks that tap pension funds as a source of patient capital. The 30-50 year lifespan of FTTP telecom infrastructure is far better aligned with the long term investment horizon of pension funds than the shorter timelines of investor owned ISPs. And now that advanced telecommunications is considered an essential utility (but not by legacy telcos and cablecos who prefer it be regarded as an information and entertainment service) and FTTP as a future proof means of delivering it to homes, businesses and institutions, there’s less uncertainty its ability to generate demand and revenue over the long term.

So far, European pension management firms appear to be in the game. However, it’s possible American pension funds like the mammoth California Public Employees' Retirement System (CalPERS) could jump in. There are plenty of localities just within California that could be potential partners on FTTP projects, particularly given the state’s two thirds voter approval requirement for most new taxes amid indications of tax exhaustion.

To reduce commute transportation demand and further its climate goals, California should tap pension funds to support advanced telecommunications infrastructure

California Governor Gavin Newsom recently issued an executive order directing the state Department of Finance to create a Climate Investment Framework. The order notes that while the state has established an ambitious goal of reducing greenhouse gas emissions 40 percent below 1990 levels by 2030, emissions from automobiles and other forms of transportation remain a “stubborn driver” of emissions. The order further directs the State Transportation Agency to reduce transportation-based emissions by reducing vehicle miles traveled by bringing jobs and housing in closer proximity and to “encourage people to shift from cars to other modes of transportation.” The order also calls for the state to leverage its $700 billion pension investment portfolio and assets to advance California’s climate leadership.

Placing jobs and housing in closer proximity has historically proven to be difficult to achieve in California given local governments have much more direct jurisdiction over land use planning than the state. A better approach would be to leverage pension funds to support regional projects by local governments to build much needed modern fiber optic telecommunications infrastructure. Pension funds the patient capital needed for long term investments such as infrastructure. This strategy would reduce commute transportation demand by better connecting California communities and allowing office workers to more easily work from their homes and co-working centers instead of piling onto freeways daily and spewing vehicular emissions. It’s particularly timely as the state’s high housing prices in metro areas drive lengthening commutes as people seek affordable homes often located at the edges of metro areas and beyond. This is where advanced telecommunications infrastructure tends to be the weakest but provides the greatest benefit.

California policymakers should consider creating public utility to serve Northern California delivering electric power -- and advanced telecommunications.

Northern California’s electric utility Pacific Gas & Electric’s future as a going concern is in doubt in the aftermath of enormous wildfires in the region the past several years, most recently the disastrous Camp Fire that incinerated the town of Paradise. The investor-owned utility is potentially facing liability claims running into the many billions of dollars from deaths, injuries, property damage and fire suppression costs that it will be hard pressed to pay. This circumstance is raising the question of whether the public interest of reliable and safe electric power would be better served by a publicly owned utility.

The question presents at a pivotal time as regulators prepare to reassess PG&E’s organizational structure going forward, the Legislature begins a new biennial session and new administration is about to take office. Veteran Sacramento columnist Dan Walters suggests they explore whether California’s electric utilities should become governmental entities – regional versions of municipally owned utilities already operating in the state. “All of them have markedly lower rates than the three big private utilities, and have governing structures that are much more transparent and accountable, not only to ratepayers but to voters.”

Policymakers would be wise and forward looking to also consider expanding the scope of a publicly owned regional utility to include advanced telecommunications. Consumers would likely get a better deal there as well. Much of PG&E’s service area lacks adequate landline telecommunications infrastructure, nominally served by investor owned corporations like PG&E. A publicly owned utility would operate without the need to generate profits and could concentrate on providing the highest possible level of service and value to all – and not just some premises. Particularly when advanced telecommunications service is increasingly seen as essential as electricity.

New methods of installing fiber optic cable on poles owned by PG&E show promise to lower construction costs compared to the traditional strand and lash method of utilizing a separate metal suspension cable hung in the middle part of the pole leased by telephone and cable companies. These include lighter weight all-dielectric self-supporting cable and aerial conduit used in conjunction with smart grid technology. Smart grid technology could also improve safety management of the electric infrastructure, reducing wildfire risk.