ISPs Warn CPUC Not to Relitigate Cheap Broadband Plan
California could risk losing broadband funding if it grants a consumer group petition to require low-cost broadband plans for everyone, ISPs warned this week. The California Public Utilities Commission received responses Monday in docket R.20-09-001 on advocates’ petition to modify an April decision on rules for the state’s $2 billion last-mile federal funding account (FFA). Industry also clashed with consumer groups, in reply comments in docket R.20-02-008, on how California LifeLine subsidies interact with federal programs.
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The CPUC removed a low-cost plan requirement in last-minute revisions before its April decision after industry groups and state legislators sought changes days before the vote (see 2204210046). The CPUC’s independent Public Advocates Office, Center for Accessible Technology (CforAT) and The Utility Reform Network (TURN) filed a June 30 petition asking the CPUC to bring back the requirement that FFA grant recipients offer a generally available $15 monthly, 50 Mbps broadband plan (see 2206300068).
"Changing the FFA rules at this late juncture would delay a time-sensitive program, risking the loss of federal funds for achieving state broadband goals,” the California Cable and Telecommunications Association responded Monday. Proposed changes are “unnecessary and unworkable,” which could deter FFA participation and hurt consumers, said CCTA. It said the petition also is procedurally improper because the consumer groups didn't show any "new facts, materially changed conditions, or that the Decision is based on a misconception of law or fact.”
The April decision properly balanced “affordability and the need to encourage participation and maximize the chance that the money will be invested in broadband infrastructure within the timelines specified by the federal government,” said Frontier Communications: The CPUC found “a reasonable resolution of this disputed issue in the underlying proceeding by removing this requirement in response to multiple comments, but incentivizing grantees to offer low-cost broadband plans by providing an additional 20 points to grantees that offer plans meeting specific criteria,” by giving an extra 10 points to federal or state Lifeline participants and by requiring affordable connectivity program (ACP) participation.
"Given the deadlines for disbursing FFA funds,” granting the petition “could jeopardize the Commission’s ability to allocate the funds in a timely manner, thereby denying consumers of the benefits of extending last-mile facilities in California,” warned AT&T. Setting a $15 monthly price would reduce the federal subsidy available for FFA-funded networks, said the carrier: The ACP gives each low-income customer $30 monthly, but the advocates’ proposal “would cut the amount in half to $15 per month, thus dramatically reducing the federal government subsidy available to support broadband services in California. In turn this would affect applicants’ ability to demonstrate the viability of proposed projects.”
Don't require small companies to provide internet at a loss, said CalTel and other small carriers: Federally regulated wholesale rates through which their ISP affiliates access local exchange facilities are commonly around $40 per month, making it "infeasible" to provide $15 monthly rates without additional support.
The consumer group petition received support from the California Community Foundation, a philanthropic organization, and Great Public Schools Now, a nonprofit advocating for better education. Affordability is a significant barrier to low-income residents accessing the internet, and communities with high poverty and low broadband adoption "are also the most likely to have only one wireline provider option,” said the community groups. “This structural problem with the market has been further compounded by decisions made by ISPs that 'redline' these same communities for reduced investment in broadband infrastructure, negating the potential role of market forces to keep prices low and service levels high.”
Calif. LifeLine Changes
The CPUC could vote Aug. 25 on a proposed decision to reduce California LifeLine subsidies when total federal monthly support applied to a LifeLine plan is more than $9.25. The National Lifeline Association (NaLA) and other providers slammed the proposal last month (see 2207290007 and 2207280059).
CforAT and TURN criticized the low-income plan providers for saying the commission can't stop them from collecting LifeLine and ACP subsidies "even if doing so results in excessive payments to providers.” Replying Monday, the consumer groups urged the CPUC to “reject providers’ arguments that they are somehow entitled to windfall profits, especially given their failure to provide data regarding customers’ data usage or providers’ reasonable costs and lost revenues incurred from providing LifeLine service.”
The consumer groups describe a “fantasy world” in which providers get “double recovery” for providing a LifeLine standard plan that includes unlimited voice, text and 6GB mobile data, protested NaLA. "No such world exists today and no service provider has proposed such an untenable outcome for the future." TruConnect agreed the CPUC should reject advocates' comments and the proposed decision.
Cable companies supported a clarification sought by small LECs that specific service amounts (SSA) will continue to be available to state LifeLine wireline providers that sell stand-alone voice to customers who also participate in ACP. Providers should continue to get $5.25 from federal Lifeline and a state SSA up to $16.23, plus $30 for stand-alone broadband if the customer is enrolled in ACP, said Cox.