Kennedy's Draft Decision Adopting Report in Fulfillment of Senate Bill 1563
Broadband Deployment Report - Appendices

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...the mission of the plan is to identify factors preventing the ubiquitous availability and use of advanced communications services, assess the consequences of, and develop strategies for, addressing these factors while encouraging the deployment of adequate investment for advanced communications infrastructure that serves the public good.2

Today's "broadband" may be considered narrowband when tomorrow's technologies are deployed and consumer demand for higher bandwidth appears on a large scale.

In response to congressional mandate,4 the Federal Communications Commission (FCC) initiated its first inquiry on the state of advanced telecommunications services in 1999 and filed the first Section 706 Report with Congress.5 In that first Section 706 Report, the FCC defined "broadband" as:

Figure 5.3

1 "The State Broadband Index," TechNet (July 17, 2003). 2 SB 1563, codified in Public Utilities Code Section 709. 3 Public Utilities Code Section 709.

4 Federal Communications Commission, "Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996," FCC Docket No. 98-146, Second Report, FCC 0-290 (August 21, 2000). Available online at

5 Section 706 reports are the FCC's primary national reporting mechanism on the state of advanced telecommunications services. 6 Ibid. 7 8 9

10 Report of the National Broadband Task Force available at

11 Ibid.

12 Electronic transmission figures assume a typical 2 hour-long movie.

13 14 FedEx package delivery from New York, NY 10005 to Beverly Hills, CA 90210. 15 Extrapolated from record Pony Express delivery time: Lincoln's Inaugural Address, March 4, 1861 carried approximately 2,000 miles from St. Joseph, Missouri to Sacramento, CA in 7 days 17 hours. 16 The FCC Local Competition and Broadband Form 477 data (collected semiannually in December and June) used to prepare the maps and tables presented here is derived from responses from providers having 250 or more customers. The data is provided to state commissions after the FCC publishes its analysis of the data in its Section 706 Report on the Availability of Advanced Telecommunications Capability, generally with a six-month lag. The June 2004 data was the most current available at time this report was prepared. December 2004 data will be available in June 2005. All data was collected by zip code, but does not include the number of customers in each zip code. Consequently, all indications of broadband availability and of the number of providers are understated. On November 12, 2004 in FCC Docket 04-266, the FCC adopted a new Form 477 that, among other things, will require reporting of five speed broadband services categories, ten broadband technology types and will eliminate any minimum customer reporting threshold. This more detailed information should help identify supply and subscribership patterns with greater accuracy and specificity. 17 Staff researched the availability of cable broadband in California zip codes through a variety of sources, including interviews with providers, public participation meetings, and research. Staff found that cable broadband is available in 313 more California zip codes than FCC data indicates. Staff's coverage calculations also assume that all areas in California with exposure to the Southern sky have access to satellite broadband. See Section 4.3 of the report. 18; Sam Diaz, "World is going WiFi - Fast", San Jose Mercury News, January 17, 2005, p. 3E. See Section 4.4 of this report for a detailed discussion of wireless broadband technologies. 19 FCC Form 477, December 2004. 20 U.S. Department of Commerce, "A Nation Online: Entering the Broadband Age," September 2004, Appendix Table 1. 21 Ibid. 22 Disability Watch: The Status of People with Disabilities in the United States, Volume 2, 2001, p. 87. 23 In California, the median household income for people without disabilities is $29,339 while the median income for people with disabilities is $16,534. Andrew J. Houtenville, Adam F. Adler, Cornell University, "Economics of Disability Research Report No. 4," Table No. 8 (April 2001). 24 Ibid. 25 Disability Watch, p. 90. 26 Pew Internet & American Life Project, "Rural Areas and the Internet," February 2004.

27 Ibid., p. 8.

28 Ibid., p. 34. 29 Ibid. 30 47 U.S.C. Sections 151 et seq. 31 See Section 5.3 of the report for a discussion of VoIP. 32 See Chapter 4 of the report for a discussion of Wireless broadband providers.

33 "Grande To Deploy Fiber to the Home Targets One Million Texas Homes, Businesses," Grande Communications Press Release, January 14, 2005.

34 General Accounting Office, "Wire-Based Competition Benefited Consumers in Selected Markets," GAO-04-241, February 2004.

35 Ibid. 36 Prices are for consumer, not wholesale, customers. Broadband pricing can vary greatly depending on a variety of factors: length of contract, speed, equipment (rent or buy), promotional period pricing, existence of market competitors, and bundling with other services (See the discussion of convergence in section 8.2.1 of the report). Generally, costs and prices of all broadband technologies decline as efficiencies due to economies of scale and equipment standardization are realized. 37 This equipment is called a Digital Subscriber Line Access Multiplexer. The DSLAM allows for the simultaneous transmission of high-speed data and voice services over traditional copper phone lines. 38 39 There are other variations of DSL including ADSL, SDSL and VDSL. ADSL, or Asymmetric DSL offers different bandwidth speeds depending upon the direction of the information flow. Data coming from the Internet to the customer's modem will be sent at a higher speed while data coming from the subscriber and going to the Internet is sent at a relatively lower speed or bandwidth. SDSL stands for Symmetric DSL, which offers the same upload and download speed, but would require a pair of dedicated copper loop. VDSL stands for very high data-rate DSL that offer a much higher speed than DSL (52 Mbps) but has a very limited range of less than 4,000 feet. 40 CPUC Staff interview with SBC representatives, February 1, 2005. 41 See, e.g., Carol Wilson, "Qbit unveils new compression approach," Telephony Online, January 7, 2005. 42 "SBC, EchoStar Announce Strategic Marketing Alliance," April 17, 2002. 43 Digital TV programming is digitized and compressed before being transmitted over the coaxial cable, enabling much more programming to be carried over a single coaxial cable. 44 National Cable & Telecommunications Association (NCTA), 45 MediaOne, since acquired by AT&T and then Comcast, began to offer cable modem service in 1994 in West LA. 46 This is not the case for California. DSL service is currently the dominant technology in California. 47 National Cable & Telecommunications Association (NCTA), 48 A "headend" is a master facility for receiving TV signals for processing and distribution over a cable TV system ( Headend is also where cable modem data is received and retransmitted to the Internet or the customer's computer. A headend serves a region that can be one city, several cities or part(s) of a city depending on the number of households subscribing to the cable data service. 49 Working through an industry association CableLab, the cable industry agreed on a common cable modem technical standard DOCSIS 1.1 (Data Over Cable Service Interface Specification), which allocated a cable channel of spectrum for cable modem with 40 Mbps of bandwidth. 50 Institute of Electrical and Electronics Engineers (IEEE), 51 As compared to typical DSL and cable modem price ($29.95 to $49.95) and bandwidth (1.5 Mbps to 3 Mbps). 52 Lonestar Broadband, 53 Institute of Electrical and Electronics Engineers. 54 Both 802.11a and 802.11g standards offer up to 54 Mbps in bandwidth but use different radio spectrums and technologies. 55 Renee Estes, SBC Laboratories Inc., "Fiber-to-the-Premise - Broadband Optical Passive Network," presented at CENIC conference on March 17, 2004. 56 Steve Rosenbush, "Verizon's Gutsy Bet" BusinessWeek, August 4, 2003. 57 Verizon News Release, July 19, 2004. 58 SBC, News Release. June 22, 2004: 59 Graphic provided by SBC-California. 60 61 62; 63 Varian Litan, Elder, and Shutter, "The Net Impact Study: The Projected Economic Benefits of the Internet in the United States, United Kingdom and Germany," January 2002. 64 Per line figures calculated by author using data from 65 Staff found some variation in these projections. 66 S. Pociask, "Building a Nationwide Broadband Network: Speeding Job Growth." TeleNomic Research, LLC, February 2002. 67 R. Crandall, C. Jackson, H. Singer, "The Effects of Ubiquitous Broadband Adoption On Investment, Jobs and the US Economy," Criterion Economics, LLC, September 2003. 68 Gartner Consulting. "One Gigabit or Bust Initiative: A Broadband Vision for California," May 2003. 69 The equivalent penetration of basic telephony in California is approximately 73% on a per capita basis. 70 S. Pociask "Building a Nationwide Broadband Network: Speeding Job Growth," TeleNomic Research, LLC, February 25, 2002. 71 Ibid., p. 2. 72 Ibid., p. 7. 73 R. Crandall, C. Jackson, H. Singer, "The Effects of Ubiquitous Broadband Adoption On Investment, Jobs and the US Economy," Criterion Economics, LLC, September 2003. 74 To achieve this level of penetration broadband subscribership must increase by about 9.4% per year from 2004 through 2021. 75 The study shows that employment peaks in 2010 at 546,000 and averages approximately 271,000 though 2021.

76 Wayne T. Brough, "State Economies Can Benefit from Broadband Deployment," Center for a Sound Economy, December 1, 2003.

77 See California Telemedicine and eHealth Center 78 Ibid. 79

80 "No Nerds Needed': VOIP Is No Longer Just for Techies", November 3, 2004, By Suzanne Vranica, Staff Reporter Of The Wall Street Journal,,SB109943061445662597,00.html

81 See "Freedom Unlimited" 82 "SBC, 2Wire Inc. to Launch Home Entertainment Services," Sacramento Business Journal, January 4, 2005. 83 DFC Intelligence Forecasts Significant Growth for Online Games, August 3, 2004. 84 "Work at Home Grows in Past Year by 7.5% in U.S.; Use of Broadband for Work at Home Grows by 84%," Press Release of International Telework Association and Council, September 2, 2004. 85 See AT&T's Telecommuting Calculator at, which permits workers to calculate carbon dioxide emissions saving by telecommuting. 86 Burt Helm, "Paving the Road for Telecommuters," BusinessWeek, September 29, 2004; Ben Macklin, "The Benefits of Broadband: Telecommuting," Entrepreneur, May 6, 2002. 87 88 Herndon, Virginia Helps Locate Missing Children with PhoneTop AMBER Alerts and Cisco IPC System, February 9, 2004. 89

90 "Westly Outlines E-Government Agenda," May 12, 2004,

91 "Public Policy Roadmap for Improving Broadband Access," New Valley Connexions, December 2003, p. 16. 92 Amador-Tuolumne Community Action Agency, Opening Comment in R. 03-04-003. 93 One study found that children of school age increased their use of a personal computer for education-related purposes by 19%, while decreasing their use for gaming and entertainment by 21%, when those computers were equipped with broadband connections. 2004 British Telecom Study, 94 Latino Issues Forum and Greenlining Institute, Opening Comments in R. 03-04-003. 95 Ibid. 96 Latino Issues Forum and Greenlining Institute, Opening Comments in R. 03-04-003, Appendix A: Model for closing Technological and Educational Disparities in Underserved Communities.

97 In addition to Section 851, wireless broadband projects face special problems related to the placement of antennas on utility poles because they are subject to additional state and federal statutory constraints on exposure of the public and utility workers to RF emissions and other hazards associated with the use of powered antennas, such as the danger of shock hazards from powered antennas.

98 California Public Resources Code Sections 21000 - 21177 (1970). 99 California Public Resources Code Section 853(b) 100 CPUC Decision 04-04-068 (2004). 101 California Public Utilities Code Section 7901.1(a) 102 California Government Code Section 50030. 103 Section 253(c) of the 1996 Telecommunications Act. 104 Ibid. 105 Government Code Section 66000 et seq. (1987). 106 114 Cal. App 4th 642 (2003). 107 Ibid. 108 Verizon California Inc.'s Opening Comments in R. 03-04-003. 109 Email transmittals between CPUC Staff and representatives of Verizon and SBC on January 14, 2005; January 26, 2005; January 27, 2005. 110 "Broadband Facilities and ROW," July 13, 2002, NARUC, 111 The stamp certifies the plans were developed by a registered professional engineer. Communications companies contract with outside engineering firms to have their plans reviewed and then stamped. However most engineering firms only stamp plans they develop, requiring communications companies to contract the outside firm to draw the plans as opposed to being able to use their own employees, which is usually cost prohibitive. 112 North Coast Times, June 5,2003. See also, 113 CPUC Decision 96-12-120. 114 California Government Code Section 53066. (a) Any city or county or city and county in the State of California may, pursuant to such provisions as may...authorize by franchise or license the construction of a community antenna TV system. 115 California Government Code Section 53066.3 (a) allows "...a city, county, or city and county elects to grant an additional cable TV franchise in an area where a franchise has already been granted to a cable TV operator..." 116 California Government Code Section 53066.3.(1) 117 California Government Code Section 53066.3 (d) 118 1996 Telecommunications Act, Section 653. FCC Rules, Section 76.1500-76.1505. 119 Comments of Disability Rights Advocates and the Center for Independent Living, San Francisco meeting on February 10, 2004. 120 Disability Watch, p. 93. 121 Amador-Tuolumne Community Action Agency, Opening Comments in R. 03-04-003. 122 Pew Internet & American Life Project, "The Ever-Shifting Internet Population," April 2003.

123 Ibid., p. 16.

124 New Valley Connexions' Public Policy Roadmap for Improving Broadband Access, December 2003, pp. 18-20. 125 New Valley Connexions, p. 3. 126 On August 3, 2004, the FCC suspended any new grants from the E-rate program. On November 29, 2004, funding for the program resumed.

127 The all-end-user surcharges are assessed on consumers' bills for intrastate telecommunications services except for the following: Universal Lifeline Telephone Service (ULTS) billings, charges to other certificated carriers for services that are to be resold, coin sent paid telephone calls (coin in box) and debit card calls, customer-specific contracts effective before September 15, 1994, usage charges for coin-operated pay telephones, directory advertising, and one-way radio paging.

128 The CPUC has determined that CTF discounts apply to all services deemed CTF eligible irrespective of the inter- or intra- state nature of the service. SBC filed an intrastate tariff with the CPUC for DSL service and is the only broadband provider to have done so. 129 47% of respondents received support from the CTF while 35% received support from E-rate and another 18% from Rural Utilities Service (RUS). RUS is discussed later in this chapter. Of the 82 respondents to the second survey, only eight reported receiving the CTF subsidy. 39 respondents reported that they were not aware of the CTF at all. 130 Of the respondents not identifying the CTF program as a support mechanism used, 58% stated that they did not know about the program. 131 Funding for the CTF Program was not included in the 2004-2005 State budget. However, Senate Bill 1276, signed by Governor Schwarzenegger on September 28, 2004, authorizes funding for the CTF Program. 132 Percentages calculated from data downloaded from 133 Federal Computer Week, October 1, 2003. 134 135 Federal Register, Vol. 69, No. 60, March 29, 2004. 136 The 19 states are AL, AR, MS, GA, KS, TX, LA, MI, ND, OH, OK, PA, SC, SD, TN, CO, IL, VA, and WI. To fund the loans, $150 million came from the 2002 Farm Bill, and $40 million from the traditional RUS program. 137 138 Application information can be found at, and DLT regulation at 139 140 141 142 143 144 Before the Idaho Public Utilities Commission, Case No PRJ-T-03-1, Order No. 29318 145 146 The tiers each represent one third of the counties in Mississippi ranked by average per capita income and unemployment rates. The 27 counties with the highest income and lowest unemployment are designated Tier 1. The next lowest income and highest unemployment is Tier 2, etc. 147 148 149 Loring Wirbel, "SBC Shifts Focus from DSL to Passive Optical Nets," EE Times, November 27, 2001. See also, SBC "Fiber-to-the-Node" announcement; 150 "Carriers Get Technical Help in Bringing HDTV to Market," Telephony Online, January 17, 2005. 151 Fiber-to-the-Node, which is similar to cable modem's HFC network architecture, but SBC will use copper loop instead of coaxial cable to connect to individual customers. 152 Financial Times, June 22, 2004. 153 June 22, 2004, 154 SureWest,, July 9, 2003 and "Cisco Helps SureWest Deploy Integrated Data, Voice and Video,", 2004. 155 Verizon, "Verizon Deploying Fiber Optics to Homes and Businesses in 6 More States in Northeast and Mid-Atlantic,", October 21, 2004. 156 Jim Duffy, "Verizon details FTTP plans," Network World, July 26, 2004. 157 Verizon, 158 SBC,, November 11, 2004. 159 Comcast, 160 Sam Kennedy, "RCN offers fastest access to Internet", The Morning Call, August 31, 2004. 161 Wi-Fi Planet,; Intel, 162 FCC Notice of Proposed Rulemaking (FCC 04-113), May 13, 2004. 163 For a more detailed discussion, visit the FCC website, "Spectrum Policy Task Force Proceedings and Initiatives," at 164 An office of the NTIA, U.S. Department of Commerce. 165 166 MetroFi, 167 Ground Control, 168 CPUC Staff interview with Ground Control, December 8, 2004. 169 CPUC Staff interview with DirecWay representative during April 2003 Broadband Summit in Washington, D.C. 170 The 15 states are: Arizona, Florida, Hawaii, Indiana, Maryland, Massachusetts, Michigan, Missouri, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas and Washington. 171 The CPUC filed comments in this docket, expressing support for the FCC's efforts. 172 News Release, FCC 04-245 Report and Order , ET Docket No. 04-37 173 Pew Internet and American Life Project, Rural Areas and the Internet, (February 17, 2004) 174 Jupiter Research, The DSL Market Opportunity (January 2004) 175 TNS Telecom Report, October 2004. 176 177 "Here Comes Cable...," Wall Street Journal, September 13, 2004. 178 179 180 "Meet the New TV Guy," Wall Street Journal, November 24, 2004. 181 "Here Comes Cable...," Wall Street Journal, September 13, 2004. 182 "Cable Titans Discuss Offering Cellular Services...," Wall Street Journal, November 8, 2004. 183 See Verizon online, Comcast, SBC Yahoo 184 For additional information on this subject: Nancy Bedard, "Progress on Point -Periodic Commentaries on the Policy Debate: A Survey of Government-Provided Telecommunications"; Kent Lassman and Randolph J. May, "Disturbing Growth Trend Continues Unabated," October 2003; "Community Broadband, Separating Fact from Fiction," Yankee Group, January 2004; "Wholesale Communications Strategies Reports, Municipalities Make their Own Broadband Opportunities," January 2004. 185 Ibid. 186 "The UTOPIA Story: Wholesale Telecommunication Services and Regional Development", Roger Black, Deputy Director and Chief Operating Officer, Utah Telecommunications Open Infrastructure Agency, August 2004.

187 See, e.g., Stephen Lawson, "Law May Snag Philadelphia Wi-Fi Rollout," and "Philadelphia Wi-Fi Plans Move Forward," IDG News Service, December 2, 2004.

188 CPUC Staff interview with Cerritos representative, January 31, 2005. 189 Visit of Assigned Commissioner to TDV, September 2004; see also 190 John Gartner, "Public Fiber Tough to Swallow," Wired, September 13, 2004.,1282,64902,00.html 191 192 The CPUC currently offers webcasting of its Commission meetings. 193 Only members of the public who are not parties to any proceeding can use the time set aside for comments from the public. 194 AB 1874 would have required state agencies to act within 45 days of the application. 195 In addition to compensation statutes, the NTIA matrix also includes citations to relevant state statutes and provides a brief description of key statutory provisions relating to jurisdiction, timelines, nondiscrimination, mediation, remediation and maintenance concerning access to public rights-of-way. The information was compiled through original research by NTIA, with reliance on existing research by NARUC and NATOA.

196 Section 851 states:

197 P.U. Section 853(b) authorizes the CPUC to exempt a public utility from Section 851 review when it finds that such review "is not necessary in the public interest."

198 The term "lower use" should be defined as suggested above (e.g. at least 10% below baseline) and not left open to interpretation and endless subsidies. 199 Citizens Housing Corporation project

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