Frontier Communications isn’t happy with the bonus that California Public Utilities Commission staff wants to bestow on it. Instead, Frontier is demanding the CPUC pay the entire cost of two fiber to the home projects in outlying areas of California.
Frontier applied for two grants from the California Advanced Services Fund (CASF), one for $1.8 million in the San Bernardino County mountain community of Lytle Creek, and the other for $1.5 million in two towns – Desert Shores and Salton Sea Beach – in Imperial County. The applications asked the CPUC to pay 100% of the cost of the projects. The CPUC has always had the discretion to do that, but up until now has typically limited last mile infrastructure subsidies to 60% to 70% of construction costs.
When the California legislature rewrote the rules for CASF subsidies last year, it bowed to cash pressure from lobbyists for Frontier – as well as AT&T, Comcast, Charter and other big monopoly model incumbents – and turned the program into their private piggy bank. One change specifically – and unnecessarily – authorised the CPUC to pay for “all or a portion” of a project, based on an assessment of its worthiness.
So that’s what CPUC staff did when they evaluated Frontier’s applications, and drafted two resolutions for commissioners to consider at their meeting tomorrow. They recommend giving Frontier grants for 90% of the Desert Shores project cost and 80% in Lytle Creek.
That’s more than any other last mile project subsidised by CASF, but it still isn’t enough for Frontier. It filed objections to the staff proposal, essentially arguing that the CPUC is obligated to give them all the money.
Nonsense.
The CPUC’s job is to try to untangle the mess that lawmakers made last year when the CASF program was rewritten. That means developing a rational process for identifying and funding broadband projects in unserved and otherwise eligible areas of California, Frontier’s overwhelming sense of entitlement notwithstanding.