6. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Thomas R. Pulsifer is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. Pursuant to SB 1040, the Broadband Infrastructure Grant and Revolving Loan Accounts provide appropriations for grants and loans to cover the cost of broadband deployment activities as specified by the Commission.

2. Ubiquitous deployment of broadband holds tremendous opportunities for consumers, technology providers, and content providers, and is important to the continued health and economic development in California.

3. The Commission previously adopted measures in D.07-12-054 to implement the CASF infrastructure grant account program to promote advanced communications services within California.

4. In view of the expanded funding for broadband grants and new funding for revolving loans authorized by SB 1040, the Commission undertook to revise the applicable rules for the award and disbursement of CASF grants and to establish initial rules for the newly established CASF revolving loan program.

5. The rules set forth in Appendix 1 and Appendix 2 to this decision provide a fair and effective set of measures to implement the purposes of the expanded CASF program pursuant to SB 1040.

Conclusions of Law

1. The Commission is authorized to implement measures necessary to enable qualifying applicants to seek funding for grants and loans under the CASF program in accordance with the legislative provisions of SB 1040.

2. Consistent with the Commission's jurisdiction over public utilities, the Commission's authority to award grants and loans under the CASF program should be limited to entities classified as telephone corporations, as defined in § 234 of the Pub. Util. Code.

3. The Broadband Infrastructure Grant Account Application Requirements and Guidelines, and the Revolving Loan Account Requirements and Guidelines, attached hereto as Appendix 1 and Appendix 2, respectively, have been developed with appropriate input from parties and should be adopted for purposes of implementing the revisions to the CASF program addressed in this decision.

ORDER

IT IS ORDERED that:

1. The Broadband Infrastructure Grant Account Application Requirements and Guidelines, and the Revolving Loan Account Requirements and Guidelines, attached hereto as Appendix 1 and Appendix 2, respectively, are hereby adopted for purposes of the application and administration process for eligible applicants under the California Advanced Services Fund.

2. Eligible applicants are authorized to begin submitting applications for projects in unserved regions pursuant to the filing deadlines adopted in Appendix 1. Subsequent rounds of applications shall be accepted in accordance with the adopted schedule for additional filing windows.

3. Rulemaking 10-12-008 is closed.

This order is effective today.

Dated February 1, 2012, at San Francisco, California.

MICHAEL R. PEEVEY

President

TIMOTHY ALAN SIMON

CATHERINE J.K. SANDOVAL

MARK J. FERRON

Commissioners

Commissioner Michel Peter Florio, being
necessarily absent, did not participate.

APPENDIX 1

Broadband Infrastructure Grant Account -
Revised to Application Requirements and Guidelines

Table of Contents

I. Background - 1 -- 1 -

II. Amount Available for Grants - 1 -- 1 -

III. Definitions - 2 -- 2 -

IV. Who May Apply - 4 -- 4 -

V. Information Required From Applicants - 5 -- 5 -

VI. Submission and Timelines - 14 -- 14 -

VII. Proposal Checklist - 18 -- 18 -

VIII. Scoring Criteria - 19 -- 19 -

IX. Selection - 24 -- 24 -

X. Reporting - 25 -- 25 -

XI. Payment - 25 -- 25 -

XII. Execution and Performance - 26 -- 26 -

Attachments

Attachment A - Information Sheet

Attachment B - Application Checklist

Attachment C - Notarized Affidavit

Attachment D - Sample Scoring Scenario Analysis

I. Background

The California Advanced Services Fund (CASF), a two year program established by the Commission on December 20, 2007, under D.07-12-054, provides matching funding for the deployment of broadband infrastructure in unserved and underserved areas of California to qualifying applicants.  The funding is used for projects that will first provide broadband services to areas currently without broadband access or with access only to dial-up service or satellite; and then second, build out facilities in underserved areas if funds are still available. Matching funds of 40% of total project costs are available to successful CASF applicants with the applicant providing 60% of the projects costs either from their internally generated funds or from external sources.

On September 25, 2010, Governor Schwarzenegger signed SB 1040 (Stats. 2010, c.317, codified at California Public Utilities (P.U.) Code § 281), which expanded the CASF and increased the CASF appropriation from $100 million to $225 million. The increase of $125 million to be collected after January 1, 2011 is allocated to the following accounts: $100 million to the Broadband Infrastructure Grant Account, $10 million to the Rural and Regional Urban Consortia Account, and $15 million to the Broadband Infrastructure Revolving Loan Account. The $125 million will be funded by a surcharge to be assessed on revenues collected from end-users and collected at $25 million a year beginning calendar year 2011.

II. Amount Available for Grants

While revenues of $20 million per year will be allocated to the Broadband Infrastructure Grant Account, the actual amount available for infrastructure grants will be $19 million as the Commission must deduct costs for administering the program from this account.

The grant funding limits are as follows:

	Infrastructure Grant (% of total project cost)	Broadband Infrastructure Revolving Loan Account (% of total project cost	Applicant(s) Funds (% of total project cost
A. With Loan
Unserved Areas	70%	20%	10%
Underserved areas	60%	20%	20%
B. Without Loan
Unserved Areas	70%	0%	30%
Underserved areas	60%	0%	40%

Unserved areas are eligible for a 70% CASF matching grant amount as the Commission considers unserved areas as having the highest priority. Typically, these areas are totally devoid of broadband service, are sparsely populated, and are characterized by difficult terrain and geography -- with correspondingly high broadband infrastructure development costs and thus are not financially attractive to private investors. The Commission hopes that the higher CASF matching funds will attract private investments to these areas as the funds required from the private investor will only be 10-30%, (depending on whether the applicant also applies for and receives a loan from the Broadband Infrastructure revolving Loan Account).

Underserved areas are eligible for 60% CASF grants, 10% less than that allocated to unserved areas, as these areas already have broadband service and the funding from CASF will be used to construct broadband infrastructure projects geared towards increasing the broadband speed to at least 6 Megabits per second (mbps) download and 1.5 mbps upload.

An applicant who applies for both a grant and a loan, but who is deemed ineligible for the loan, will have to submit a new application if it intends to pursue the project and show how it will fund 30 - 40 % of the total project cost.

In areas where the Commission has already awarded a CASF grant, new CASF grant funding for broadband projects in the same area will be available only after 3 years from the start of broadband service of the first CASF- funded project in order to ensure that existing grantee(s) are able to realize returns on their investment.

III. Definitions

An "unserved" area is an area that is not served by any form of wireline or wireless¹⁸ facilities-based broadband, such that Internet connectivity is available only through dial-up service.

An "underserved" area is an area where broadband is available, but no wireline or wireless¹⁸ facilities-based provider offers service at advertised speeds of at least 6 mbps download and 1.5 mbps upload.

The Commission will consider all CASF funded projects in the determination of unserved and underserved areas, irrespective of the CASF funded project's technology.

A California Interactive Broadband Map is posted on the CASF webpage to assist the applicant(s) in identifying areas that are still unserved and underserved. This map is based on the most current information collected as part of the federal broadband inventory mapping effort.  Data used in this map were collected from California providers pursuant to a Recovery Act Broadband Mapping grant.  Availability and maximum advertised speeds are shown by census block (for blocks 2 square miles or smaller), and by street segment (for larger blocks).  The map will show the areas served, unserved or underserved, existing providers in areas where broadband service is available, the broadband technology offered in served areas, current speeds in the served areas, and population in the served and underserved areas.

Where a broadband infrastructure may have to pass or upgrade existing broadband facilities in already served, unserved or underserved areas to reach a remote unserved or underserved area, the project may be considered for funding. Applicants for middle-mile projects are required to submit all documentary requirements and will be evaluated based on their compliance with the guidelines and the evaluation criteria applicable to last mile unserved and underserved projects, including submission of proof that the backhaul or backbone construction is an indispensable part of their plan to reach unserved and / or underserved communities The applicant will also have to pro-rate costs when projects include facilities in unserved, underserved, and "served" - areas, including a detailed explanation of the allocation of costs and a full accounting of that allocation at each funding phase of the project.

For example, if a project (for an unserved area and the applicant is requesting a CASF grant only) will cost $2.5 million and 20% of those costs are related to facility improvements that will benefit both unserved and served areas, applicants should pro-rate the amounts related to each area. Thus, if the common facilities will be used equally by unserved areas and by communities with broadband today, then the applicant should only include $250,000 in the application for facility improvement costs. The applicant should thus ask for $1,575,000 in CASF funds ($1,400,000 for construction in the unserved area, and $175,000 in common costs allocated to the unserved area). The applicant should fully explain the total cost of the project and the allocation that was made to arrive at the figures used in the application. ¹⁹

IV. Who May Apply

CASF funding is limited to entities with a Certificate of Public Convenience and Necessity (CPCN) that qualify as a "telephone corporation" as defined under P.U. Code section 234 or wireless carriers who are registered with the Commission (i.e., hold a WIR). Wireless carriers need not obtain a CPCN to qualify for CASF funding. An entity who has a pending CPCN application to provide service as a "telephone corporation" may submit a request for CASF funding subject to approval of its CPCN. CASF funding is also available to a consortium as long as the lead financial agent for the consortium is an entity holding a CPCN or a wireless carrier registered with the CPUC.

The Commission will consider applications from satellite service providers provided that the applicants are CPCN or WIR holders, are able to prove functionality, and are able to meet the speeds required.

The Commission also encourages applicants to offer basic voice service to customers within the service area of the broadband deployment subject to the CASF award. Any such voice service offering must, at a minimum, meet FCC standards for E-911 service and battery back-up supply.²⁰ For purposes of the CASF, "basic service" is defined to include any form of voice-grade service including that offered through a wireless or Voice Over Internet Protocol (VoIP) service.

V. Information Required From Applicants

Applicants are required to submit the following information to the Commission for each proposed broadband project, where each "broadband project" is defined as deployment encompassing a single contiguous group of Census Block Groups (CBGs).

The application must be submitted online, with a hard copy sent to the CASF and the Division of Ratepayer Advocates. The applicant must submit each item as a document, unless otherwise specified, and in some cases also as data entered directly. The applicant must also fill out a checklist (attached as Attachment B) and include the completed checklist in hard copies of the proposal.

1. Project Summary

The applicant must submit a project summary which the Communications Division (CD) will post on the CASF webpage under Pending New Applications to Offer Broadband. The applicant must also submit the project summary to the CASF application distribution list²¹. The summary must include the following information:

o Applicant's name

o Contact person

o Project title

o Proposed Project Area Location (Community / County)

o Project Type (Last Mile or Middle-Mile)

o CASF Funding Requested (Amount of Grant / Amount of Loan)

o Description of the Project

o Map of the Proposed Project

o List of Census Block Groups

o List of ZIP codes

The applicant may also use this summary information in its adoption and outreach efforts, i.e., in soliciting local government and community support for the proposed project, in disseminating information to the proposed communities/areas.

2. Funding Requested

The applicant must indicate the funding requested, i.e., whether it is applying for a grant only or a combination of a grant and a loan.

3. Area applied for

Applicant must specify whether it is applying for an unserved or underserved area.

4. CPCN / U-Number / CPUC Registration Proof

(As a single document)

· Applicant's U-Number and/or

Proof of applicant's Certificate of Public Convenience and Necessity (CPCN)

· In the absence of a CPCN -

Proof of CPCN application pending approval, or CPCN application number.

· Wireless Carriers -

CPUC Registration Number

5. Information sheet

Applicant must submit the information sheet attached as Attachment A together with all supporting documents required.

6. Organizational Chart and Background

The applicant must submit an organizational chart showing the parent organization, subsidiaries and affiliates.

The applicant must also submit a description of its readiness to construct and manage a broadband service network by listing all projects constructed and currently managed and operated.

7. CASF Key Contact Information

· First Name

· Last Name

· Address Line1

· Address Line2

· City

· State

· ZIP

· Email

· Phone

8. Key Company Officers (list up to 5):

· Position Title

· First Name

· Last Name

· Email

· Phone Number

Resumes of each key company and management personnel must be submitted.

9. Current Broadband Infrastructure Description

Description of the provider's current broadband infrastructure and/or telephone service area within 5 miles of the proposed project, if applicable.

10. Current Broadband Infrastructure Shapefile

Shapefile (.shp)²² of current service area. A shapefile is not a single file, but a collection of seven files - .dbf, .prj, .sbn, .sbx, .shx, .shp, .xml.  Without all of these, the data cannot be read.

The .shp format is compatible with the ArcGIS software used by the Commission.

11. Proposed Broadband Project Description

· Description of proposed broadband project plan for which CASF funding is being requested, including the type of technology to be used

· Project size (in square miles)

· Download speed capabilities of proposed facilities

· Upload speed capabilities of proposed facilities

The proposed broadband description should include a description of the type of technology to be provided in the proposed service areas. The project description should provide enough construction detail to enable a preliminary indication of the need for a California Environmental Quality Act (CEQA) review. For example, when trenching is required, the applicant should so state and describe the manner in which the site is to be restored, post-trenching. The Commission established benchmark speed standards of advertised speeds of 6 mbps download and 1.5 mbps upload. Applicants may propose lower speeds; speed will be a criteria considered in evaluating the applications, with higher speeds being preferable.

12. Proposed Broadband Project Location

· Geographic locations by CBG(s) where broadband facilities will be deployed

· List of CBG(s),

· Number of households per CBG,

· Median household income for each CBG that intersects the proposed project, to be based on most current Census data available, and

· List of ZIP Code(s) that intersect the proposed project.

CBGs and ZIP codes must be based on the 2010 census. CBGs must be in a twelve digit format as follows:

State CA           County              Tract                 Block Group

2 digits              3 digits              6 digits              1 digit

For example:  a CBG near the town of Alturas in Lassen County:  Lassen County Tract 401, Block Group 1 would have the following CBG:

State CA           County              Tract                 Block Group

06                     035                   401.00              1

State:  California is always denoted as 06. 

County:  Refer to County Code List

Tract:  Can be denoted as 1) a number with decimal followed by 2 digits; then fill in zeroes in front to make 6 digits; or 2) as 4-6 digits, fill "0s" as needed. Drop decimal.

For the example cited; this tract/block group in Lassen would be expressed as 06-035-040100-1.  For CASF purposes, we use the standard expression: 060350401001

Applicants are expected to target areas that are still unserved and underserved based on the latest available information. The most current Broadband Availability map that the applicant can use in preparing their applications is the California Broadband Interactive Map on the CASF webpage which shows the areas current served, the provider, the technology available in a particular area up to street level, the speeds in the areas served, as well as the population in these areas.

13. Proposed Broadband Project Location Shapefile

Shapefile (.shp) showing boundaries of the specific area to be served by the project. A shapefile is not a single file, but a collection of seven files - .dbf, .prj, .sbn, .sbx, .shx, .shp, .xml.  Without all of these, the data cannot be read.

The .shp format is compatible with the ArcGIS software used by the Commission.

14. Assertion of Unserved or Underserved Area

An explanation of the basis for asserting that, to the best of the applicant's knowledge, the area is unserved or underserved (i.e. a reference to the California Interactive Broadband Map or other published reports).

This includes figures, in mbps, of the current:

· average download speed by CBG(s);

· average download speed by ZIP Code(s);

· average upload speed by CBG(s); and

· average upload speed by ZIP Code(s).

15. Estimated Potential Subscriber Size

· Estimated number of potential broadband households (i.e. total occupied housing units) in proposed project location.

· Estimated number of potential broadband subscribers (i.e. total population) in proposed project location.

· Documentation of all assumptions and data sources used to compile estimates.

· Adoption / Sustainability plan

Applicants must submit a plan to encourage adoption of the broadband service in the proposed area(s). The plan should include the total number of households in the area, the number of households the applicant estimates will sign up for the service (the take rate), the marketing or outreach plans the applicant will employ to attract households to sign up for the service.

16. Deployment Schedule

Delineated schedule for deployment with commitment to complete build-out within 24 months of the approval of the application. The schedule shall identify major prerequisite(s), construction, and any other milestones that can be verified by Commission staff. Milestones will be listed using the following format:

· Milestone Start and Ending Date

· Milestone Description

· Milestone Comments

· Milestone Risks

In developing the schedule, applicant(s) must include the timeline required for the California Environmental Quality Act (CEQA) review.

If the applicant(s) is unable to complete the proposed project within the 24-month timeframe, it must notify the CPUC as soon as it becomes aware of this prospect. The Commission may reduce payment for failure to satisfy this requirement.

17. Proposed Project Budget

Proposed budget for the project including:

· a detailed breakdown of cost elements;

· amount of cost elements;

· availability of matching funds to be supplied by applicant;

· amount of available funds from each individual funding source; and

· the amount of CASF funds requested, broken down into grant and loan components, if applicable.

Note: See section II for the amounts required from the applicants.

18. Economic Life of all assets to be funded

The applicant must identify all the equipment to be funded by the CASF by category (buildings, outside plant, towers and poles, network and access equipment, operating equipment, customer premise equipment), the type of equipment (new building, prefabricated building, rehab of existing building, new towers or poles, modification of existing towers and poles, broadband switching equipment, office furniture and fixture, etc.), and the estimated useful life (10, 15, 20, etc years).

19. Local Government and Community Support (optional)

The applicant may submit endorsements or letters of support from the local government, community groups, and anchor institutions supporting the deployment of the broadband infrastructure.

20. Performance Bond Documentation

The applicant must send an executed bond, equal to the total amount payable under the CASF award²³, to the Executive Director and to the Director of Communications Division within five business days after the completion of the CEQA review. An applicant is not required to post a performance bond if it certifies that the percentage of the total project costs it is providing comes from their capital budget and is not obtained from outside financing. The performance bond must be callable for failure to complete the CASF funded broadband project.

Applicants who will complete the project and front-end all the project costs before requesting for reimbursement may request exemption from the performance bond requirement.

21. Proposed Pricing

Proposed (two - years fixed) monthly subscription fee and waiver of installation and / or initial service connection fee for applicant's proposed broadband service(s). The monthly subscription fee should be the sum of all recurring rates and non-recurring charges (except the installation and/or initial service connection fees) the customer must pay to receive service during the initial two years of service, expressed as a monthly average. All services upon which the monthly subscription fee is based should be clearly itemized. The monthly subscription fee should not include discounts or any other promotional offerings. The monthly subscription fee should represent the maximum amount that customers will pay, on average, for the duration that this price is committed (according to Item 22).

Also indicate, if any: service restrictions; option to bundle with other services; commitments; any requirements that customers must meet, or equipment that they must purchase or lease, in order to receive the service.

For each type and/or bundle of services that you propose to offer (or for each monthly subscription fee, if you propose to commit to more than one), provide the following:

· Proposed (two- years) monthly subscription fee for applicant's proposed broadband service(s).

· Other recurring charges;

· All services and equipment upon which the monthly subscription fee is based;

· Service restrictions; option to bundle with other services;

· Any commitments and/or requirements that customers must meet, or equipment they must purchase or lease, in order to receive service.

22. Price Commitment Period

The required Period of Commitment to which the initial price (listed in Item 21) is applicable for all households within the service area of the project. Minimum price guarantee period for each customer is two years.

If the applicant proposes to require customer commitments to more than one monthly subscription fee (i.e., one amount for six months and a different amount for the six month intervals, thereafter), list the duration and amount of each price guarantee separately (Note: you must make a separate showing for each amount in Item 21).

The period of commitment is on a per customer basis, such that a customer who signs up within two years from the beginning date of service can expect the same price guarantee from the day they signed up for service, which may not be for the entire two years. To illustrate, a customer who signs up for service on day 730 will be entitled to the same price for one month as a subscriber who signs up for service on day 1. The difference between the two customers is that the former's price is valid for one month while the latter's price is valid for 24 months.

23. Financials - Financial Qualifications to Meet Commitments

A. CPA Audited / Attested Financial Statements for the last three years. The statements are to include:

_ Balance Sheet

_ Income Statement

_ Statement of Cash Flows

B. Pro Forma Financial Forecast over the life term of the loan (i.e. 5 years) that includes a list of assumptions supporting the data. For projects applying for a grant only, the pro forma financial forecast will be over 5 years. Future projections must include the following financial statements:

_ Balance Sheet

_ Income Statement

_ Statement of Cash Flows

C. Annual EBIT (Earnings Before Income and Tax) projection over 5 years

D. Schedule of all outstanding and planned debt

E. Collateral Documentation

i. Include Depreciation Schedule of Assets (applicable to an applicant applying for a grant / loan combination only).

The applicant must submit an analysis of the viability (B. above) of the project and the assumptions used in the analysis such as the funding sources, the adoption rates, subscriber data and adoption rates.

CPA Audited or Attested Financial Statements will be accepted from parent companies in lieu of financial statements from subsidiaries that have no audited or attested financial statements. If applicant has been in existence for less than three years, financial statements for as long as applicant has been in existence, e.g. one or two years, will be accepted.

24. Providing Voice Service:

· Availability of voice service that meets FCC standards for E-911 service and battery back-up;

· Listing of types of voice services offered;

· Timeframe of voice offering(s).

25. CEQA Compliance

The applicants must provide the Proponent's Environmental Assessment (PEA) prior to the first 25% payment. The PEA submission should include information on any land crossing sites requiring discretionary or mandatory permits or environmental review pursuant to CEQA (include the type of permit required, the name of the permitting agency/agencies and the Lead Agency if an environmental review is required). Also agree to identify, prior to the first 25% payment, any other special permits required with a cross reference to the government agencies from which the permits will be required for the project.

Any application should state whether the project is statutorily or categorically exempt from CEQA requirements and cite the relevant authority, as applicable.

Applicants should include the CEQA review timeline in its construction timeline.

26. Affidavit of Application's Accuracy

Applicants must submit an affidavit, under penalty of perjury, that to the best of their knowledge all the statements and representations made in the application information submitted is true and correct (Attachment C).

VI. Submission and Timelines

Applicants should electronically file their completed applications at http://www.cpuc.ca.gov/puc/

and mail a separate hard copy to the Communications Division, Attn: California Advanced Services Fund, and mail another hard copy to the Division of Ratepayers Advocates. Since applications are not filed with the Commission's Docket Office, they will not be assigned proceeding number(s).

There will be three application windows in the initial round, as follows:

· First application window - for unserved projects

· Second application window - for underserved projects in areas with broadband service and where the existing infrastructure or broadband infrastructure under construction was not partially funded by CASF and broadband speed is less than advertised speeds of 6 mbps download and 1.5 mbps upload. This deadline will also include hybrid broadband projects²⁴ covering unserved and underserved areas (not partially funded by CASF).

· Third application window - in underserved areas with broadband service and where the existing infrastructure or broadband infrastructure under construction was partially funded by CASF and broadband speed is less than advertised speeds of 6 mbps download and 1.5 mbps upload. The third application window will also be open to other viable projects the Commission deems appropriate. CD is authorized to communicate the deadline for filing at a later time.

As specified in Section II, the Commission will evaluate new CASF applications in areas where CASF funding has been provided 3 years after the start of broadband service of the CASF funded project in order to ensure that grantee(s) are able to realize returns on their investment.

If funds are still available, CD will open a second round, open up three application windows, and set new deadlines for submission of applications.

Applications submitted on the specified deadline dates will be evaluated and funding approved based on the evaluation and ranking of the proposals.

Applications for unserved areas will receive priority in funding. Applications received up to the deadline date will be evaluated and ranked according to the criteria adopted. CD will consider in the next application round applications submitted after the deadline as well as applications that were not funded during the first round application window(s) for the following reasons: submission of an incomplete application, failure to provide additional information as required by CD staff, and failure to provide additional information / clarification by the date set by CD staff. In the second and third application window, CD will consider only applications specified for those windows.

To illustrate, if the drop-dead deadline for unserved applications is May 15, 2012, CD will review and evaluate applications that are compliant with the requirements. CD will review and evaluate an application for unserved areas submitted after the May 15, 2012 deadline only after a second round is opened and will review and evaluate that post-May 15 application together with the applications submitted during the second round application window for unserved areas. This is true for applications for underserved areas submitted during the second and third application windows.

Any applicant whose application in any application window is held for a) late submittal, non-submittal of information requested or 3) additional information submitted late may withdraw its application and resubmit a new application when a second application round is opened.

The estimated timeline for application submission and evaluation is as follows:

CD may create subsequent filing periods if applications do not exceed the available funds. After considering all of the applications for unserved areas received by the initial deadline for the first application window and if funds are still available, CD will consider applications for underserved areas subject to the availability of remaining CASF funds.

Any party that challenges a proposed area or CBG as already served or not underserved must provide documentation that the area or CBG is in fact already served and not underserved (e.g., maps or a copy of a customer bill).  CD will then investigate this information, along with the applicant's documentation supporting its assertion that the CBG is unserved or underserved.  CD will inform the applicant of the challenges filed on its application and provide the challenger's name and all information submitted. Once CD makes a final determination, it will notify the applicant of its determination.

If the challenged CBG is determined to be "served" or not underserved, the application cannot be considered and will be rejected.  The applicant, however, has the option to submit a modified application in subsequent rounds of proposals, either for the same area (provided that the parts of the CBG that are not "unserved" are omitted from project cost and budget considerations) or for only those parts of the CBG that are unserved

Entities who challenged applications submitted must submit maps of their service area(s) and addresses of households in their service area(s) to enable staff to verify the challengers' allegation that the area(s) are already served and not underserved.

VII. Proposal Checklist

An applicant must complete the CASF Application Checklist Form (Attachment B and attach it to each project proposal.

VIII. Scoring Criteria

This section describes the method by which CD will evaluate applicants on how well they meet the goals of the CASF program outlined in D.07-12-054. CD will present its evaluation in the form of a numerical score. Once CD assigns applicants a score, CD will rank them in order from highest to lowest, with CASF money being allocated following this order until the entire fund has been allocated.

An evaluation team comprised of Commission staff will assess applications in each of the following areas: (i) Funds Requested per Potential Customer, (ii) Speed, (iii) Financial Viability, (iv) Pricing, (v) Total Number of Households in the Proposed Area, (vi) Timeliness of Completion of Project, (vii) Guaranteed Pricing Period, and (viii) Low-Income Areas, by applying the corresponding formula and assigning weights. Points will be awarded based on consensus of the evaluation team.

The following table summarizes the adopted scoring criteria and weights:

Scoring Criteria

Criterion	Weight (Points)
i) Funds Requested per Potential Customers	35
ii) Speed	20
iii) Financial Viability	15
iv) Pricing	10
v) Total Number of Households in the Proposed Area(s)	5
iv) Timeliness of Completion of Project	5
vii) Guaranteed Pricing Period	5
viii) Low-Income Areas	5
TOTAL:	100

Applicants will be scored based on eight criterion with each criterion scored relative to the best offer, i.e., highest amount (Max) or lowest (Min). Relative scoring measures an applicant's performance by how well they do compared to all other applications. The application that does the "best" for each criterion is awarded more points and sets the standard for comparison with all other applications. Using points in the scoring formulas sets a limit on the effect each criterion will have on the total score and ensures that the optimum mix of CASF features sought by the Commission is made available by applicants.

Each criterion has a formula associated with it that determines its value and is scored accordingly. Applicants' data as reflected in their submission is entered in the formula for each criterion to generate the points for each criterion. Corresponding points for each of the criterion will be added together to determine each application's total score.

Example:

Among three applicants, with total number of households in the proposed area(s)at 100, 75, and 50 households respectively. The highest value is 100, therefore, each applicant will be scored relative to that. Thus, the first applicant's score for this factor would be (100/100)*5 = 5; the second applicant's would be (75/100)* 5 =3.75; and, the third applicant's would be (50/100)* 5 = 2.5.

Attachment D shows a sample scoring - scenario analysis for seven (7) - hypothetical proposed projects.

i) Funds Requested per Potential Customers

Funds requested per potential customers is calculated based on the number of customers the applicant will be able to serve divided by the CASF grant funding amount requested. Points will be determined based on the following formula:

Min(a) / a_i *35

Where "a" is the funding amount ($) requested from the CASF divided by the number (#) of potential customers for the specific project being scored and Min(a) is the lowest funding amount ($) requested from the CASF divided by the number (#) of potential customers among all the eligible projects submitted.

a = Funds Requested / Potential Customers

Customers is defined as households and defined in P.U. Code, section 5890(j)(3). Applicants can obtain data on households from the U.S. Census Bureau.

ii) Speed

This criterion represents the difference between the current average advertised speed per customer available and the average advertised speed per customer available after the proposal is complete in the proposed areas. Applicants are encouraged to offer a minimum of at least advertised speeds of 6 mbps download and 1.5 mbps upload. Points will be determined based on the following formula:

b_i / Max(b) * 20

Where "b" is the sum of the square roots of the differences in upload and download speeds (MB) between pre- and post-project for the specific project being scored and Max(b) is the highest sum of the square roots of the differences in upload and download speeds among all the eligible projects submitted.



The square root of the average advertised speed increase is used to express the diminishing return to value associated with increasing speed. This encourages speed increases that are more noticeable and therefore valuable to the customer, but still rewards those who offer speeds far above the benchmark speed of at least advertised speeds of 6 mbps download and 1.5 mbps upload.

Where:

NSU = New Speed Upload

Average advertised upload speed (MB) per customer post-proposal in the proposed areas.

OSU = Old Speed Upload

Average advertised upload speed (MB) per customer pre-proposal in the proposed areas.

NSD = New Speed Download

Average advertised download speed (MB) per customer post-proposal in the proposed areas.

OSD = Old Speed Download

Average advertised download speed (MB) per customer pre-proposal in the proposed areas.

iii) Financial Viability

The average projected EBIT (Earnings Before Interest and Tax) over 5 years will be used as the measure of the applicant's financial position.  Points will be determined based on the following formula:

h_i / Max(h) * 15

Where "h" is the average projected EBIT amount over five years for the specific project being scored ((EBIT Year 1 + EBIT Year 2 + EBIT Year 3 + EBIT Year 4 + EBIT Year 5)/5)) and Max(h) is the highest projected EBIT amount among all the eligible projects submitted.

iv) Pricing

This factor measures the price applicants will charge, on average, per Megabit. Points will be determined based on the following formula:

.

Min(e) / e_i * 10

Where "e" is the price ($/MB) of service for the specific project being scored and Min(e) is the lowest price of service among all the eligible projects submitted.

v) Total Number of Households in the Proposed Service Area

The total number of households in the applicants' proposed areas is the number of households passed. Points will be determined based on the following formula:

c_i / Max(c) * 5

Where "c" is the number of households for the specific project being scored and Max(c) is the highest number of households among all the eligible projects submitted.

vi) Timeliness of Completion of Project

This criterion measures the number of months the applicant will complete its proposal ahead of the 24 month cut-off date. Points will be determined based on the following formula:

d_i / Max(d) * 5

Where "d" is the number of months (Mo.) ahead of schedule for the specific project being scored and Max(d) is the highest number of months ahead of schedule among all the eligible projects submitted.

d = 24 - TT

where:

TT = Total Time (Mo.) to complete

The total amount of time the proposal will take to complete. Total Time may not exceed 24-months.

vii) Guaranteed Pricing Period

This measures the amount of time the applicant can guarantee the price of service beyond the mandatory two years. Note: applicants must guarantee the price of their services in the proposed areas for at least two years. Points will be determined based on the following formula:

f_i / Max(f) * 5

Where "f" is the length (Mo.) of price guarantee for the specific project being scored and Max(f) is the highest length (Mo.) of price guarantee among all the eligible projects submitted.

f = Months Guaranteed - 24

viii) Low Income Areas

This will be determined based on the median household income of the potential customers in the applicant's proposed area. Points will be determined based on the following formula:

Min(g) / g_i * 5

Where "g" is the median household income ($) of the potential customers for the specific project being scored and Min(g) is the lowest median household income ($) of the potential customers among all the eligible projects submitted.

* Data on population and median household income per CBG can be obtained from the U.S. Census Bureau.

Five (5) bonus points will be added to the score of an applicant who is able to submit local government and community support endorsements or letters of support.

IX. Selection

The Commission will award CASF grant funding to projects that receive the highest number of points based on the scoring criteria described above. The Commission will authorize individual awards for CASF grant funding via resolution.

X. Reporting

Grantees must submit quarterly progress reports on the status of the project irrespective of whether grantees request reimbursement or payment.

XI. Payment

Payment to the CASF recipient will be on a progress billing basis with the first 25% to be made upon the proponent's submission to the Commission staff of a progress report showing that 25% of the total project has been completed. Subsequent payments shall be made on 25% increments showing completion at 50%, 75%, and 100%. The CASF recipient must submit a project completion report before full payment. Progress reports shall use both the schedule for deployment; major construction milestones and costs submitted in the proposals and indicate the actual date of completion of each task/milestone as well as problems/issues encountered, and the actions taken to resolve these issues/problems during project implementation and construction. Recipients shall also include test results on the download speed and upload speed on a per CBG and per ZIP Code basis in the final completion report. Recipients must certify that each progress report is true and correct under penalty of perjury.

CASF recipients shall notify the Commission as soon as they become aware that they may not be able to meet the 24-month timeline. In the event that the recipient fails to notify Communications Division of any delays in the project completion and the project fails to meet the approved completion date, the Commission may impose penalties to be adopted in a Commission resolution.

Payment will be based upon receipt and approval of invoices/other supporting documents showing the expenditures incurred for the project in accordance with the CASF funding submitted by the CASF recipient in their application.

Grantees shall submit final requests for payment 90 days after completion of the project.

Payment will be made in accordance with, and within the time specified in California Government Code section 927 et seq.

The Commission has the right to conduct any necessary audit, verification, and discovery during project implementation/construction to ensure that CASF funds are spent in accordance with Commission approval.

The recipient's invoices will be subject to a financial audit by the Commission at any time within three (3) years of completion of the work.

XII. Execution and Performance

CD staff and the CASF grant recipient shall determine a project start date after the CASF grant recipient has obtained all approvals. Should the recipient or Contractor fail to commence work at the agreed upon time, the Commission, upon five (5) days written notice to the CASF recipient, reserves the right to terminate the award.

In the event that the CASF recipient fails to complete the project, in accordance with the terms of approval granted by the Commission, the CASF recipient must reimburse some or all of the CASF funds that it has received.

The CASF grant recipient must complete all performance under the award on or before the termination date of the award.

ATTACHMENT A

Information Sheet to be submitted by Applicants Requesting for CASF Funding


BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

1 Application of:

Name of Applicant

for CASF Funding pursuant to Decision_____

(Insert the full legal name of applicant in blank above; see instruction 1; attach fictitious names, if any)

Street address:

Telephone: ( ) Fax No.: ( ) E-Mail:

2 Applicant is:	A corporation (attach good standing certificate)	·
(Check only one;	A general partnership (attach good standing certificate)	·
see instruction 2.)	A limited liability partnership (attach good standing certificate)	·
	A limited liability company (attach good standing certificate)	·
	A general partnership	·
	A sole proprietor	·
	A trust	·
	Other (describe)	·
	Attach name, street address, and telephone number of applicant's registered agent for service of process
	Attach list of the names, titles, and street addresses of all officers and directors, general partners, trustees, members, or other persons authorized to conduct the business of applicant at a similar level
	Attach list of all affiliated entities (see instruction 2)

3 Legal domicile	California	·
of applicant is:	Other (identify):	·
(Check only one; see instruction 3.)

4 Applicant will provide service:	In specific portions only (attach description and map)	·
(Check only one; see instruction 5.)

5. Applicant will	True	·
provide: broadband service only	Not true	·
(Check only one; see instruction 6.)

6. For the past 10 years, no affiliate,	True	·
officer, director, general partner, or	Not true	·
person owning more than 10% of applicant, or anyone acting in such a capacity whether or not formally appointed, held one of these positions with any company that filed for bankruptcy or has been found either criminally or civilly liable by a court of appropriate jurisdiction for a violation of § 17000 et seq. of the California Business and Professions Code or for any actions which involved misrepresentations to consumers, and to the best of applicant's knowledge, is not currently under investigation for similar violations.
(Check only one; see instruction 2.)

7. To the best of applicant's knowledge, neither	True Not true	· ·
applicant, any affiliate, officer, director, partner, nor owner of more than 10% of applicant, or any person acting in such capacity whether or not formally appointed, has been sanctioned by the Federal Communications Commission, or any state regulatory agency for failure to comply with any regulatory statute, rule or order, or convicted by any court for any criminal activity for the past 10 years.

8. Applicant has	True	·
the required financial capability and technical	Not true	·
expertise to build a broadband infrastructure and operate and maintain a broadband service.

I hereby declare under penalty of perjury under the laws of the State of California that the forgoing information, and all attachments, are true, correct, and complete to the best of my knowledge and belief after due inquiry, and that I am authorized to make this application on behalf of the applicant named above.

Signed:

		Name:
		Title:
		Dated:
Street
Address
Telephone No.
Fax No.

Principal Place of Business (if different from address on page 1).

Street Address

City  

State  

ZIP Code

Telephone No.

Instructions:

1. Enter the legal name of applicant exactly as it appears on its articles or certificate of corporation or similar charter document.

2. Specify the type of applicant's organization. Applicant must provide Good Standing Certificate is available from the office of the Secretary of State of the State of California and should be dated of a date not more than 60 days prior to the date of filing the application. An original certificate must be attached to the manually signed copy of the application. An affiliated entity is any entity under common control with applicant. Common control exists if the same individuals or entities have the direct or indirect power to determine the action of applicant and such entity through the right to vote shares, by contract or agreement, or otherwise. Note whether any such entity is a reporting company for purposes of the Securities Exchange Act of 1934, as amended.

3. For individuals, domicile is the place of legal residence; for entities, it is the state of incorporation or organization.

4. Specify the exact area for which authority is requested, i.e., Community and County.

5. Indicate whether the applicant will be providing broadband service only.

Items 2, 6 and 7 are subject to confirmation by the Commission through the conduct of background check(s). For numbers 6 and 7, attach detailed description, if applicable.

6. Detailed information should be provided for the past 10 years, if applicable.

7. Detailed Information should be provided for the past 10 years, if applicable.

8. Attach audited balance sheet for the most recent fiscal year and an unaudited balance sheet as of the most recent fiscal quarter, a bank statement as of the month prior to the date of filing the application, or a third-party undertaking to provide the required amounts on behalf of applicant. If the balance sheet shows current liabilities in excess of current assets or negative equity, explain how applicant will be able to maintain sufficient liquidity for its first year of operations. Attach detailed summary, if applicable.

Material changes in the entries for this application , such as discontinuing operation or bankruptcy, or change of name (DBA), change of address, telephone, fax number or E-mail address should be reported by a letter to the CPUC, Director of the Communications Division, 505 Van Ness Avenue, San Francisco, CA 94102.

ATTACHMENT B

CASF APPLICATION CHECKLIST

(Required for EACH proposed project)

To assist the Commission in verifying the completeness of your proposal, mark the box to the left of each item submitted.

	1. Project Summary
	2. Type of Funds Requested (Check one only):
		Grant
		Grant Amount: _________
		Grant/Loan Combination
		Grant Amount: _________
		Loan Amount: _________
	3. Area Applied for
		Unserved
		Underserved, with existing broadband service below advertised speed of 6 mbps download and 1.5 mbps upload, Broadband infrastructure whether existing or ongoing construction not CASF funded
		Underserved, with existing broadband service below advertised speed of 6 mbps download and 1.5 mbps upload, Broadband infrastructure whether existing or ongoing construction CASF funded
	4. CPCN / U-Number / CPUC Registration Proof (As a single document)
		Applicant's U-Number and/or Proof of applicant's Certificate of Public Convenience and Necessity (CPCN)
		Proof of CPCN application pending approval, or CPCN Application Number (in the absence of a CPCN)
		CPUC registration Number (wireless carriers)
	5. Information Sheet with a Certificate of Good Standing issued by the CA Secretary of State attached
	6. Organizational Chart, Company History and Readiness to Build, Manage and Operate Broadband
		Organizational Chart
		Company History
		Readiness to Build, Manage and Operate Broadband
	7. CASF Key Contact Information
		First Name
		Last Name
		Address Line1
		Address Line2
		City
		State
		Zip
		Email
		Phone
	8. Key Company Officers (list up to 5)
		Title
		First Name
		Last Name
		Email
		Phone Number
		Resumes of key officers and management personnel
	9. Current Broadband Infrastructure Description
		Description of the provider's current broadband infrastructure within 5 miles of the proposed project, if applicable.
		List showing number of households per CBG and Zip Code
	10. Current Broadband Infrastructure
		Shapefile (.shp) of current service area.
	11. Proposed Broadband Project Description
		Description of proposed broadband project plan for which CASF funding is being requested, including the type of technology to be deployed
		Project size (in square miles)
		Download speed capabilities of proposed facilities
		Upload speed capabilities of proposed facilities
	12. Proposed Broadband Project Location
		Geographic locations by CBG(s) where broadband facilities will be deployed:
		List of CBG(s) and,
		ZIP Codes that intersect the proposed project.
	13. Proposed Broadband Project Location Shapefile
		Shapefile (.shp) showing boundaries of the specific area to be served by the project.
	14. Assertion that area being proposed is Unserved or Underserved Area. This includes figures, in mbps, of the current:
		(a) average download speed by CBG(s);
		(b) average download speed by ZIP Code(s);
		(c) average upload speed by CBG(s) and;
		(d) average upload speed by ZIP Code(s).
	15. Estimated Potential Subscriber Size
		Estimated number of potential broadband households in proposed project location.
		Estimated number of potential broadband subscribers in proposed project location.
		Documentation of assumptions and data sources used to compile estimates.
		Adoption Plan
	16. Deployment Schedule
		Milestone Start and Ending Date
		Milestone Description
		Milestone Comments
		Milestone Risks
	17. Proposed Project Budget
		a detailed breakdown of cost elements;
		the source of cost elements;
		amount of cost elements;
		availability of matching funds to be supplied by applicant; and
		the CASF funds requested.
	18. Economic Life of Assets to be Funded
	19. Local Government and Community Support (optional)
	20. Performance Bond Documentation (to be submitted after project award)
	21. Proposed Pricing
		Proposed recurring retail price per MBPS for applicant's proposed broadband service(s).
		Initial service connection charges, if any and any bundling of equipment in the proposed pricing.
		Other recurring costs
		Other non-recurring costs
	22. Price Commitment Period
	23. Financials
	a) CPA Audited / Attested Financial Statements for the last three years (if applicant has been in existence for less than three years, provide financial statements for as long as applicant has been in existence, e.g. one or two years)
		Balance Sheet
		Income Statement
		Statement of Cash Flows
	b) Pro Forma Financial Forecast over 5 years
		Balance Sheet
		Income Statement
		Statement of Cash Flows
	c) Annual EBIT (Earnings Before Income and Tax) projection over 5 years
	d) Schedule of all outstanding and planned debt
	e) Collateral Documentation (include depreciation schedule of assets
	f) Equity Requirement of 20% of the loan amount (For Grant / Loan Combination only) Equity requirement of 20% should be sustained throughout the life of the loan: 5 years
	g) Minimum TIER Requirement of 1.5 (For Grant / Loan Combination only) The Minimum TIER Requirement of 1.5 should be sustained throughout the life term of the loan: 5 years
	24. Proof of Voice Service
		Availability of basic voice service that meets FCC standards for E-911 service and battery, including:
		Listing of types of services offered;
		Timeframe of offering.
	25. CEQA Compliance
		Proponent's Environmental Assessment (PEA)
	26. Notarized Affidavit

Applications will be considered beginning: _________________

Submit completed applications online at http://www.cpuc.ca.gov/puc/

with hard copies mailed separately to:

Communications Division

Attn: California Advanced Services Fund

California Public Utilities Commission

505 Van Ness Ave.

San Francisco, CA 94102

Division of Ratepayer Advocates

Re: California Advanced Services Fund

California Public Utilities Commission

505 Van Ness Ave.

San Francisco, CA 94102

ATTACHMENT C

NOTARIZED AFFIDAVIT

Name of Carrier/Company _______________________________________

Utility Identification Number ___________ or __________ check here if Application for CPCN is pending and the CPUC assigned application no., if available.

My name is ____________________________. I am ___________________ (Title) of __________________________ (Company). My personal knowledge of the facts stated herein has been derived from my employment with ____________________________ (Company)

I swear or affirm that I have personal knowledge of the facts stated in this Application for the California Advanced Services Fund, I am competent to testify to them, and I have the authority to make this Application on behalf of and to bind the Company.

I further swear or affirm that ________________________ [Name of Carrier/Company] agrees to comply with all federal and state statutes, rules, and regulations, covering broadband services and state contractual rules and regulations, if granted funding from the California Advanced Services Fund.

I swear and affirm that I agree to comply with Rules 1.11 and 2.2 of the California Public Utilities Commission's rules of practice and Procedure.

I swear or affirm, under penalty of perjury, and under Rule 1.1 of the California Public Utilities Commission's Rules of Practice and Procedure, that, to the best of my knowledge, all of the statements and representations made in this Application are true and correct.

___________________________

Signature and title

___________________________

Type or print name and title

SUBSCRIBED AND SWORN to before me on the _____ day of ____, 20____.

Notary Public In and For the State of __________________

My Commission expires: ______________________

ATTACHMENT D

(END OF APPENDIX 1)

APPENDIX 2

Broadband Infrastructure Revolving Loan Account -
Application Requirements and Guidelines.

D1202015 APPENDIX 2 Peeveye

¹⁸ Wireless broadband means a wireless high-speed internet access or connection provided to households, businesses and/or anchor institutions that meet the speeds and program guidelines set forth in this decision. Wireless broadband can be mobile or fixed.

¹⁹ a) Total Project Cost x 20% equals amount of facility improvements benefiting both Unserved and Served areas: ($2,500,000 x 0.20 = $500,000),

b) Equal proration of facility improvements: Unserved area = $250,000 and Served area = $250,000,

c) Common cost funded by CASF for facility improvements: Unserved area equals $250,000 x 0.70 = $175,000,

d) Project cost exclusive of facility improvements equals $2,000,000 ($2,500,000 - $500,000),

e) CASF funding of project costs exclusive of facilities improvements equals $1,400,000 ($2,000,000 x 0..70),

f) Thus, the applicant's Total CASF funding request would be $1,575,000 ($1,400,000 + $175,000).

²⁰ D.07-12-054, Ordering Paragraph 16, pp. 62-63

²¹ Communications Division will provide instructions on how to sign up for this distribution list to parties in the CASF rulemaking proceeding (R.10-12-008) and post these instructions on the Commission website as soon as practicable.

²² This file format is compatible with ArcGIS software used by the Commission.

²³ A CASF award includes both a grant and loan amounts.

²⁴ As referenced in section V, each "broadband project" is defined as deployment encompassing a single contiguous group of Census Block Groups (CBGs).

²⁵ The evaluation period may be longer for applicants applying for a loan as the evaluation will include financial eligibility review which may be performed by an external government financial institution.