California’s Broadband Office is just what you’d expect: large, spread out, and a little hard to navigate.
It’s not, technically, even one office, but when Telecompetitor met with Robert Osborn, the director, Communications Division, of the California Public Utilities Commission (CPUC), we were trying to get a lay of the land.
In actuality, the CPUC Communications Division handles the complicated task of allocating broadband grants to serve those in need. For our conversation, Osborn was joined by Ben Menzies, senior policy advisor, and Jonathan Lakritz, who is serving as the state’s BEAD program manager as we tried to better understand California’s plans for BEAD.
Lakritz, for one, predicted it will be difficult. “Experience running grant programs in California tells us this will be a big lift. It is every time we go out for grants.”
The CPUC’s Communications Division oversees the state’s telecommunications issues in six branches. Within broadband there are approximately 75 employees with a subsection of 25 dedicated to BEAD. Offices are in Sacramento, San Francisco ad Los Angeles.
Osborn said that CPUC works closely with the California Department of Technology, which oversees the implementation of the state’s digital equity grants and the deployment of the statewide open access middle mile network.
Broadband Goldrush Already Underway
Prior to the BEAD program, the state already had embarked on a $6 billion infrastructure buildout starting in 2021. The first tranche was combined with the state’s $540.2 million CPF allocation to create a $2 billion round of funding from California’s Federal Funding Account (FFA). Interest in the grant program was high, with more than 484 applications coming in requesting $4.6 billion.
Osborn explained that these are the latest efforts as part of the CPUC’s long-standing broadband grant programs that have existed since 2008. The California Advanced Services Fund is funded by surcharges on telephone lines (both landlines and cellular) and subsidizes a variety of programs around broadband adoption, line extension, community and Tribal technical support, and much more.
BEAD: Waiting & Readying
California will receive $1.86 billion in BEAD money to reach an estimated population of 307,000 unserved and 155,000 underserved residents.
Osborn said Volume 1, while approved by the NTIA on April 5, also required approval by the CPUC, which came a month later. He explained, “Because we are a commission and follow a deliberative public process, formal approval is done through a rulemaking.”
While California awaits Volume 2 approval, it is conducting webinars and doing outreach to educate the public on the 120-day challenge process, which will begin in July 2024. “The challenge process,” said Lakritz, “will be extremely … challenging, for a lack of a better word. We anticipate a lot of challenges. We have very active wired and wireless ISPs, as well as active consumer groups.”
One thing that should ease the challenge process, explained Osborn, is that he doesn’t see large RDOF defaults as an issue his state will face. “We were exhaustively thorough with our RDOF approvals. We got ahead of defaults because we didn’t see some providers having the wherewithal to deliver what they were proposing, so organizations that we were dubious of were never approved in the first place,” said Osborn.
As for Volume 2, curing is operating in a parallel path to the challenge process. Lakritz expressed some bemusement that the 365-day shot clock starts with Volume 2 approval as opposed to starting upon completion of the challenge process. “I can’t predict when [Volume 2] will be approved. It’s an iterative process and we are following the NTIA’s lead. But we’re going to need every bit of the 365 days — it’s going to be very challenging.”
BEAD Process
Before the process of selecting awardees officially gets underway, the team is busy priming the pump to make sure anyone who wants to bid is able to bid. Menzies told us that the team is currently “conducting education, outreach, and technical assistance to everyone including nontraditional competitors like local and tribal governments and nonprofits.”
Plans are to run an initial applicant selection process and then run successive rounds, as well as negotiations for project areas that received no bids.
The BEAD guidelines put California in a position to negotiate, which is a novel approach for broadband grant programs in California.
Another BEAD challenge is just how big and diverse the state is. “How does one set of rules serve both Los Angeles and Ojai? The environmental review requirements and permitting requirements are different in each location. Running one program in 58 counties is a hard thing to do,” Osborn said.
Technology Mix
Is under $2 billion enough money for California to reach underserved and unserved locations with this fiber first program?
Lakritz answered this by saying, “We are going to do our best to make sure it’s enough — it all depends on bids. We won’t know what the gap is until after the first round of grants.”
Will wireless play a part? Yes, as the state reports that it has 50 to 60 wireless internet service providers serving between 3 percent and 4 percent of the state’s broadband residential subscriptions.
Go Where No ISP Will Go
“We want to get broadband to places where ISPs won’t go,” said Osborn. “So, we are focusing on expanding the universe of broadband providers. It’s for this reason that we’ve had programs including local agency technical assistance to let localities build their own broadband.”
California clearly believes in municipal broadband and giving communities the chance to step up, build, and provide access where providers simply don’t want to build. But Lakritz explained that the 25% matching requirement in the BEAD program may be an impediment. “We’re hoping they all participate, but the match requirement will have an impact on whether people can bid.”
To date, Osborn reported that they’ve seen a lot of “nontraditional providers” submit applications for Federal Funding Account funding, including municipalities partnering with construction companies that can build and operating companies that can run these networks. Osborn said there is a high level of interest from tribes and municipalities that haven’t felt well-served by the private sector.
“We see lots of different approaches: some are going full municipal, public-private partnerships, or fully private,” said Osborn. “My team is simply trying to provide the resources and the training to allow counties who are interested to take control of their own destiny. A challenge is that nontraditional providers typically need more time — time that’s not necessarily available.”
To Japan & Back
A longtime Californian, Osborn holds degrees from UC Berkeley and UC San Diego. His career has been in telecommunications for more than three decades; he started his journey with what he calls “the private-sector thing.” This included stints at MCI in network management and a general manager post in Japan for Vodafone.
Osborn joined the CPUC in 2012 and was appointed director of the Communications Division just before the pandemic in 2020.
He praised his team as extremely important to him and his daily work life. “We have a great group, a very collegial team who has each other’s backs. Everyone is really smart and together we produce a lot of great stuff. It’s very satisfying.”
Ultimately, Osborn derives great satisfaction from working in the public sector and in his words, “doing something good for Californians that will stick.”
Updated to state that California is slated to receive approximately $1.86 billion/ $1.9 billion in BEAD funding
