Cable Seeks Changes to Calif. Loan Loss Support Rules

Rework proposed rules for a $750 million broadband program to “meaningfully prioritize unserved communities,” the California Broadband and Video Association (CalBroadband) urged the California Public Utilities Commission in comments Wednesday. The California Public Utilities Commission could vote Nov. 2 on a proposed decision for the broadband loan loss reserve fund (BLLRF). The Center for Accessible Technology (CforAT) and Rural County Representatives of California (RCRC) applauded proposed rules.

The CPUC rejected cable industry suggestions to limit BLLRF support to unserved areas and to support projects in which a private entity owns the infrastructure, in the agency’s proposed decision (see 2309290050). California’s $6 billion broadband law created BLLRF to fund costs of financing broadband infrastructure deployment by nonprofits and local and tribal governments. It’s meant to cover costs including those for debt issuance, credit enhancement and reserves for paying principal and interest on debt. The law required the CPUC to set eligibility requirements, financing terms and conditions.

"Lack of meaningful prioritization for unserved communities contradicts state policy and prior Commission statements,” commented CalBroadband in docket R.23-02-016. The unserved seemingly would be prioritized only if applications exceed funding available in a given cycle, the cable group said. “It is unclear whether such a scenario would ever occur." Even if it did, applicants would get points even if the proposal benefits only a "portion of unserved locations," complained CalBroadband: Under such “ambiguous language,” an applicant could get all the points by reaching only one unserved location.

California’s broadband, equity, access and deployment five-year action plan said current available funding is unlikely to be enough to connect all unserved areas, so it’s "even more critical that the Commission focus all of its programs … on connecting those locations," CalBroadband said. Also, the association noted proposed rules define “unserved communities” but use the term only once, "ironically, to note that the LLP will not be limited to unserved areas.”

Meanwhile, disallowing support for privately owned networks means BLLRF "participants will be deprived of public-private partnerships that connect communities to high-speed broadband networks, which have a long, well-documented history of success,” said CalBroadband. "This restriction is particularly problematic given that partnerships with established providers can significantly lessen the well-documented high risk associated with government-owned networks.”

But the proposal got praise from non-industry commenters. It would bridge the digital divide, said RCRC. It "will ensure that local and tribal governments and nonprofits have adequate financial resources to invest in open access, future-proof community-owned networks," said CforAT, specifically praising proposed requirements of 100 Mbps symmetrical speeds and surplus capacity. Also, Cfor AT said the plan "will curtail incumbents’ delaying tactics and will result in communities owning their own broadband infrastructure.”

The CPUC would be right not to support private infrastructure, the National Diversity Coalition said. Doing so "would circumvent the statute’s stated intention to help local government agencies and nonprofit organizations to deploy broadband infrastructure."

Affordability mandates should go beyond requiring participation in the affordable connectivity program, given its uncertain future, said The Utility Reform Network. If funds are exhausted four months from now, the CPUC may soon find the loan loss program’s “affordability protections are hollowed and the Commission would need to revisit the affordability protections and seek out substitutes for the shell of the ACP,” said TURN. The group suggested requiring "a contingency plan to provide access to a broad-based affordability program for low-income customers in the proposed service area of the broadband infrastructure should the ACP end.” The commission should “identify a successor low-income subsidy program in its place,” it added.

Optimize the loan loss program to satisfy BEAD requirements, said TURN: Clarify that the loan loss program can be used to satisfy BEAD's letter of credit and matching requirements. Also, the CPUC should set aside 10% of the program's funding for sovereign tribal government applications, it said.

The CPUC should add a definition for underserved with the 100/20 Mbps speed standard from BEAD, and sharpen some other definitions to enhance equity, TURN said. It’s unclear if loans and letters of credit are eligible for the debt service reserve, so the CPUC should include a nonexclusive list of eligible public financing instruments, it said. Make it more clear that disadvantaged communities, low-income and tribal areas are eligible for a proposed equity track, added TURN: And the definition of tribal lands "should ensure projects .... can serve tribal members in reservation trust land and those in proximity to trust land."