Senate Energy, Utilities and Communications Committee Broadband and the Digital Infrastructure Video Competition Act of 2006

February 16, 2010

 

Who We Are

DRA is the independent consumer advocacy division of the California Public Utilities Commission with a statutory mandate to obtain the lowest possible rate for utility service consistent with reliable and safe service levels.

Problems with Broadband Grant Programs

Broadband grant programs funded by all ratepayers do not deliver ubiquitous broadband deployment and adoption cost effectively to all ratepayers

• Inadequate Project Information and Public Disclosure – Applications are reviewed confidentially with few, if any, published standards or requirements; the public has little to no opportunity to review or comment before award or denial of the grant; and applicants are not required to make public project details, such as labor and materials or construction milestones
• Insufficient Accountability – There is no opportunity for handling concerns or complaints after grant award; weak or non existent cost-effectiveness criteria; no third-party independent review of project viability; and no independent performance reviews or financial audit of projects
• Limited Expectations on Grant Recipients – No guarantee that services will or even should be provided on request to everyone in the service area; awards allow high installation charges and fees that discourage adoption; insufficient commitment to serve the low-income and working poor; and approved projects have proposed speeds below the already-low speed benchmark

DRA Recommendations

• Transparency – Require grant applications to include detailed project costs and make applications and process itself publicly available; mandate public notice to residents in target communities with adequate time to review and comment before award or denial; require the development of published standards and cost thresholds for application review; and establish independent third-party review of applications before award or denial
• Accountability – Create standards to ensure cost-effectiveness and project viability and require third-party post-performance audits of construction, costs, and subscriptions
• Accessibility – Prioritize funding to underserved and low-income communities; require recipients to share their networks; cap monthly rates at moderate levels for at least two-years; prohibit installation charges and service connection fees; and require speeds for 21st century applications

Contact: Matthew Marcus, DRA’s Legislative Director, (916) 327-3455, mnm@cpuc.ca.gov