Carriers Defend Proposed CASF Grants; CPUC Eyes ETC Denial for LTD

A California fight is heating up over proposed broadband subsidies that the California Public Utilities Commission might award next week to carriers including Frontier Communications and Race Communications. Etheric, GeoLinks, LTD Broadband and others in recent weeks opposed proposed California Advanced Services Fund (CASF) resolutions up for vote at the CPUC’s Dec. 16 meeting because they said the projects overlap with places where they won Rural Digital Opportunity Fund (RDOF) support. Commissioners may vote at the meeting on a proposed decision that could prevent LTD from qualifying for RDOF support in California.

“Frontier is comfortable that we are in compliance with all program rules,” a spokesperson emailed Wednesday. Etheric, GeoLinks and LTD raised concerns Nov. 23 about Frontier grants proposed in resolutions T-17749 and T-17754 (see 2111240046). The CPUC didn’t comment Wednesday.

Race urged the commission Tuesday to reject opposition to a proposed resolution (T-17751) to award it $18.3 million to bring service to 1,245 households in Nevada City and elsewhere. State public utility code doesn’t require the CPUC to use federal money before awarding CASF support, Race wrote the agency. “What the statute actually says is that CASF money may be used to leverage or match federal moneys for broadband.” The CPUC “has full discretion over what state broadband infrastructure projects it chooses to fund,” it said.

The state regulator isn’t “obligated to wait forever for federal funding to materialize under the law,” Race said. “The pleas of the objecting parties show that the FCC RDOF award process is progressing much more slowly than expected,” and it would be reasonable for the CPUC to move forward, it said. Even if complaining RDOF bidders receive their federal awards, all four lack eligible telecom carrier designations in California, said Race: the CPUC plans to vote on denying LTD’s application. Act quickly to grant support due to rising costs and a continuing pandemic, it said.

Etheric, GeoLinks and LTD asked to remove overlapping census blocks from proposed CASF grants. “Doing so will alleviate the possibility of double funding by a federal subsidy and a state grant,” LTD wrote Dec. 2 about the Race resolution. The draft departs from the CPUC’s March 26 decision to delay acting on 40 CASF applications until it gets more information on final certification of RDOF awards, said LTD: the FCC hasn’t completed that review. LTD hasn’t heard from the CPUC on its opposition letter, attorney Stephen Coran of Lerman Senter emailed Monday.

Some companies suggested that the CPUC could entirely deny CASF applications that partially duplicate areas with RDOF support. Etheric and GeoLinks said that in a Nov. 24 letter opposing T-17751, a Nov. 29 letter opposing T-17750 to grant funding to Plumas Sierra Telecommunications and the Nov. 23 letters against proposed Frontier grants. Spiral said the same in a Dec. 2 letter opposing T-17751.

Wavelength Internet opposes the “conclusion that, because the Commission has not yet acted on RDOF awardees’ petitions for ETC designation (most of which have been pending for nearly a year), the RDOF awards may simply be ignored,” it wrote Dec. 2 in opposition to the proposed Race grant. If the CPUC won’t remove duplicative funding, delay considering the application, at least for overlapping areas, “until either the FCC acts upon the RDOF awards, or the Commission acts upon the pending ETC designation petitions.”

LTD hasn’t shown “managerial fitness,” said the draft for the Dec. 16 meeting that would deny its application for a certificate of public convenience and necessity and ETC designation. “The facts in this proceeding show a pattern of misrepresentations by LTD to the Commission,” including LTD failing to disclose three federal tax liens, said the proposed decision. “While it is possible that the failure to disclose the federal tax liens was unintentional, at best, this failure shows negligence by LTD’s management and a lack of commitment to transparency and regulatory compliance.”

The proposal risks about $187.5 million in RDOF support for nearly 77,000 unserved locations and “is premised on erroneous findings of fact and incorrect application of the applicable law that … are evident on their face,” LTD commented Dec. 2. It “places full blame on LTD for falsehoods that the company’s former state regulatory counsel was exclusively responsible for originating and disseminating,” it said: That lawyer was fired. LTD said the draft’s assertion it had to disclose the federal tax liens “in response to a question relating solely to settlements, voluntary payments and monetary forfeitures arising from government enforcement inquiries stretches that disclosure requirement well beyond recognition and does not in any way show that LTD misrepresented itself.”

LTD sued the Iowa Utilities Board last week for denying ETC status needed to get $23 million in RDOF support in Iowa (see 2112070065).