CPUC Clears $91M for Last Mile After Lawmakers Slash Millions From Local Broadband Fund

The CPUC adopted rules for the once-$750 million loan loss program in November (see 2311020054). In spring 2024, the CPUC received nearly 40 applications requesting about $450 million from the fund. However, facing a budget deficit in May, Gov. Gavin Newsom (D) proposed slashing the program as part of a $2 billion clawback of state broadband funding (see 2405150035). On June 26, the California legislature set a $50 million budget and directed the CPUC to award it by Dec. 31.

The draft resolution (T-17841) approved Thursday clarifies “that at least $50 million in appropriated Broadband Loan Loss Reserve program funding will be available [for] … applications received during the first application cycle” from March 12 through April 9 “irrespective of cycles and tracks.” As originally envisioned, the program would have released funding over three, equal four-month cycles, split among: equity (50%), tribal (10%) and general market (40%). Commissioners approved the resolution as part of a unanimous vote on the consent agenda. Commissioner Matthew Baker recused himself because he previously directed the CPUC’s independent Public Advocates Office, which participated in the proceedings.

Rural County Representatives of California was disappointed that the fund was slashed but glad that the legislature and Newsom's administration appropriated $50 million in the final budget. Previously, it proposed providing nothing, RCRC Senior Policy Advocate Tracy Rhine emailed us. “We are hopeful that the remaining amount, paired with the [FFA] awards, will give project[s] in rural communities a chance at success.”

Commissioners unanimously approved the FFA last-mile grants, the fifth in a series of recent resolutions granting cash through the CPUC’s federal funding account. Of $91 million awarded, Comcast received about $14 million in grants this round, said the draft resolution (T-17839). Other winners included Surfnet ($4.3 million), Marin County ($11.3 million) and Round Valley Indian Tribes ($35 million). Commissioners also voted 5-0 to approve another draft resolution (T-17836) awarding more than $279,000 in grants for two public housing infrastructure projects.

The FFA “program has had great success in receiving a number of excellent applications … from a range of applicants,” said CPUC President Alice Reynolds. She's pleased that the awardees Thursday include “tribes, cities, counties and both large and small ISPs.” Commissioner Darcie Houck noted that the public housing awards are even more important with the end of the federal affordable connectivity program.

Commissioners voted 4-0, with Baker recused, for an order (docket A.22-09-003) related to setting the cost of capital for 10 independent small telephone companies, which is used for each company’s ratemaking purposes. Cost of capital is the rate of return a company may recover on infrastructure investments. Saying it strikes a better balance, commissioners supported an alternate decision by Commissioner John Reynolds that proposed a capital structure with 55% equity and 45% debt over CPUC Administrative Law Judge Patricia Miles’ proposed decision, which would have maintained -- for now -- a 70% / 30% capital structure established about 25 years ago.

For the second straight meeting, the CPUC postponed voting on an order that would allow people without Social Security numbers (SSNs) to apply for state low-income phone subsidies from the California LifeLine program. CPUC staff pushed the item to the Sept. 26 scheduled meeting, said a hold list released Wednesday. The commission released a revised draft of the proposed decision Monday.

The revised draft responded to various privacy concerns, including a plan to use LexisNexis’ TrueID authentication software for identity verification (see 2408130011). The commission won’t use facial recognition in California LifeLine identity verification software, it said. Regarding concerns about TrueID specifically, CPUC staff will work with the agency’s IT division “to confirm that any new vendor providing identity verification services to California LifeLine complies with the” CPUC’s privacy policy and the U.S. General Services Administration’s IT Security Procedural Guides, the new draft said. In addition, staff “will ensure that the new identification software does not retain California LifeLine consumers’ personal identification information submitted during the application process,” it said. “This data minimization process will effectively and automatically opt out California LifeLine consumers from having their information sold or shared.”

Also, noting comments by T-Mobile’s Assurance Wireless asking that accepting SSNs be optional, the CPUC reemphasized the requirement's mandatory nature in the revised draft. Assurance’s “argument conflicts with our previous conclusion that requiring applicants without an SSN to provide government-issued identification will deter fraud,” it said. “If we grant Assurance’s recommendation, eligible Californians without SSNs may be denied access to California LifeLine services. As such, we deny Assurance’s recommendation and remind service providers that they are obligated under Pub. Util. Code Section 876 to explain how to qualify and obtain California LifeLine service to all eligible Californians.”