Federal subsidies are in the pink.
As might be expected, Frontier Communications objects to a proposed $29 million California Advanced Services Fund subsidy for a fiber to the home project in its San Bernardino County territory. Its first instinct was to try to a backdoor approach at the California Public Utilities Commission, but that was rebuffed. So yesterday Frontier filed formal comments urging the CPUC to kill the Gigafy Phelan project when it comes up for a vote next week.
There are a few problems with its arguments against it.
First, it claims it’s going to upgrade the area that Race Telecommunications wants to serve. Well, not the entire area. Only 60% of the homes. And Frontier is very careful not to mention what that upgraded service will be. That’s because it’s only willing to commit to meeting a federal subsidy program’s 10 Mbps download/1 Mbps upload standard, as its previous filings at the CPUC have made abundantly clear. That service level does not meet the CPUC’s 6 Mbps down/1.5 Mbps up minimum. So even if the upgrade is completed in August, Frontier’s service in the Phelan area will still be substandard, for both the 40% of homes it’s bypassing and for many, if not all, of the remaining 60%.
Second, it makes a very odd argument against tapping two subsidy programs in one area. The CASF grant, which would give a gigabit to 100% of the homes in the project area, comes from California taxpayers, who also contribute to the federal Connect America Fund program that is financing Frontier’s substandard upgrade. It’s a fair point that taxpayers should only be paying for one broadband upgrade project, but should it be the one that offers a gigabit for $60 a month or the one that’ll lock in ten or twenty year old technology for the next twenty or thirty years?
There’s no way that Frontier will pass up that money, though. In fact, it doesn’t pass up money even when it means engaging in the kind of double dipping that it so piously objects to in its letter to the CPUC. In 2015, Frontier pursued, and received, CASF and federal subsidies to prop up its ageing DSL infrastructure in the Humboldt County town of Petrolia.
Frontier is entitled to play subsidies as dealt. But it’s gross hypocrisy to complain about the game when the other guy ends up with better cards.