Broadband Deployment in California Report Appendix A - C
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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" will be considered narrowband when tomorrow's technologies are deployed and consumers increasingly demand greater bandwidth.

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 In addition, 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 the time this report was prepared. December 2004 data will be available in June 2005. 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 FCC Form 477 data, June 2004. 19 Warren's Factbook 2004; email correspondence between CPUC staff and representative of Comcast, April 8, 2005. 20 Based on national data, see Lynn Stanton, "'Shaping Industry' Like `Herding Cats'," Telecommunications Reports, April 5, 2005 (quoting FCC Chairman Martin as stating "As a result of cable broadband investment, 90% of homes have [broadband] access..."); "Cable Industry Facts-at-a-Glance January 2005," 21; 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. 22 See 23 Consistent with FCC practice for Broadband reporting inForm 477 and elsewhere, for purposes of this Chapter, "lines" refers to all broadband connections, including those using wireline technologies, such as fiber, copper, co-axial cable and electric power lines, and those using wireless connections, such as satellite and WiFi. 24 FCC Form 477, December 2004. 25 U.S. Department of Commerce, "A Nation Online: Entering the Broadband Age," September 2004, Appendix Table 1. 26 Ibid. 27 Disability Watch: The Status of People with Disabilities in the United States, Volume 2, 2001, p. 87. 28 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. 29 Ibid. 30 Disability Watch, p. 90. 31 Pew Internet & American Life Project, "Rural Areas and the Internet," February 2004.

32 Ibid., p. 8.

33 Ibid., p. 34. 34 Ibid. 35 Rob Fairlie, Rebecca London, Manuel Pastor, Rachel Rosner, "A Nation Offline? Research on the Digital Divide," Center for Justice, Tolerance & Community, University of California Santa Cruz, 2003;;digitaldivide.html. 36 Ibid. 37 Ibid. 38 Ibid. 39 Ibid. 40 In a 2003 CPUC Competition Report, 12 ILECs reported offering broadband through affiliates. 41 47 U.S.C. Sections 151 et seq. 42 2003 Competition Report, supra. 43 See Section 5.3 of the report for a discussion of VoIP. 44 Stephen Lawson, "EVDO Lights Up Mobile Data," NetworkWorldFusion, August 12, 2004;; See Chapter 4 of the report for a discussion of Wireless broadband providers. 45; April 4, 2005 email between CPUC Staff and Verizon Wireless representative. 46 Email correspondence between CPUC staff and representative of Cingular Wireless, April 5, 2005. 47 James Granelli, "Network with No Strings Attached," Los Angeles Times, August 30, 2004;; 48

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

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

51 Ibid. 52 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. 53 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. 54; 55 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. 56 CPUC Staff interview with SBC representatives, February 1, 2005. 57 See, e.g., Carol Wilson, "Qbit unveils new compression approach," Telephony Online, January 7, 2005. 58 "SBC, EchoStar Announce Strategic Marketing Alliance," April 17, 2002. 59 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. 60 National Cable & Telecommunications Association (NCTA), 61 MediaOne, since acquired by AT&T and then Comcast, began to offer cable modem service in 1994 in West Los Angeles. 62 This is not the case for California. DSL service is currently the dominant technology in California. 63 National Cable & Telecommunications Association (NCTA); 64 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. 65 Working through an industry association CableLab, the cable industry agreed on a common cable modem technical standard DOCSIS 2.0 (Data Over Cable Service Interface Specification), which allocated a cable channel of spectrum for cable modem with 40 Mbps of bandwidth. 66 Under the previous cable modem standard DOCSIS 1.1, each cable modem customer can achieve maximum download speed of 10 Mbps, DOCSIS 2.0. increases the maximum download speed to 30 Mbps. 67 Institute of Electrical and Electronics Engineers (IEEE); DSL Reports; 68 As compared to typical DSL and cable modem price ($29.95 to $49.95) and bandwidth (1.5 Mbps to 3 Mbps). 69 Lonestar Broadband, 70 Institute of Electrical and Electronics Engineers, 71 Both 802.11a and 802.11g standards offer up to 54 Mbps in bandwidth but use different radio spectrums and technologies. 72 Renee Estes, SBC Laboratories Inc., "Fiber-to-the-Premise - Broadband Optical Passive Network," presented at CENIC conference on March 17, 2004. 73 Steve Rosenbush, "Verizon's Gutsy Bet," BusinessWeek, August 4, 2003. 74 Vince Vittore, "IOCs," Telephony, February 28, 2005. 75 Verizon News Release, July 19, 2004. 76 SBC News Release, June 22, 2004; 77 Vince Vittore, supra. 78 Ed Gubbins, "New Reports Suggest 2005 As Critical to Growth of BPL," Telephony, February 28, 2005, p. 9. 79 United Telecom Council, 80 81 Gubbins, supra. 82 83; 84 Transcript of California Public Utilities Commission Full Panel Hearing on Broadband Deployment, February 8, 2005. 85 Craig Rose, "SDG&E Explores Offering Web Access," San Diego Union-Tribune, February 10, 2005. 86 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. 87 Per line figure calculated using data from 88 Staff found some variation in these projections. 89 S. Pociask, "Building a Nationwide Broadband Network: Speeding Job Growth," TeleNomic Research, LLC, February 2002; 90 R. Crandall, C. Jackson, H. Singer, "The Effects of Ubiquitous Broadband Adoption On Investment, Jobs and the US Economy," Criterion Economics, LLC, September 2003; 91 Gartner Consulting, "One Gigabit or Bust Initiative: A Broadband Vision for California," May 2003; 92 The equivalent penetration of basic telephony in California is approximately 73% on a per capita basis. 93 S. Pociask "Building a Nationwide Broadband Network: Speeding Job Growth," TeleNomic Research, LLC, February 25, 2002. 94 Ibid., p. 2. 95 Ibid., p. 7. 96 R. Crandall, C. Jackson, H. Singer, "The Effects of Ubiquitous Broadband Adoption On Investment, Jobs and the US Economy," Criterion Economics, LLC, September 2003; 97 To achieve this level of penetration broadband subscribership must increase by about 9.4% per year from 2004 through 2021. 98 The study shows that employment peaks in 2010 at 546,000 and averages approximately 271,000 though 2021.

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

100 See 101

102 Suzanne Vranica, "No Nerds Needed: VOIP Is No Longer Just for Techies," Wall Street Journal, November 3, 2004;,,SB109943061445662597,00.html.

103 See "Freedom Unlimited," 104 "SBC, 2Wire Inc. to Launch Home Entertainment Services," Sacramento Business Journal, January 4, 2005. 105 DFC Intelligence Forecasts Significant Growth for Online Games, August 3, 2004; 106 "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; 107 See AT&T's Telecommuting Calculator at, which permits workers to calculate carbon dioxide emissions saving by telecommuting. 108 Burt Helm, "Paving the Road for Telecommuters," BusinessWeek, September 29, 2004; Ben Macklin, "The Benefits of Broadband: Telecommuting," Entrepreneur, May 6, 2002. 109 110 Herndon, Virginia Helps Locate Missing Children with PhoneTop AMBER Alerts and Cisco IPC System, February 9, 2004; 111

112 "Westly Outlines E-Government Agenda," May 12, 2004;

113 "Public Policy Roadmap for Improving Broadband Access," New Valley Connexions, December 2003, p. 16. 114 Amador-Tuolumne Community Action Agency, Opening Comment in R. 03-04-003. 115 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; 116 Latino Issues Forum and Greenlining Institute, Opening Comments in R. 03-04-003. 117 Ibid. 118 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. 119 California Public Utilities Code Section 7901. 120 47 U.S.C. Section 253. 121 Conversation between CPUC Staff and Counsel for NextG Networks of California, Inc. on March 17, 2005. 122 California Public Resources Code Sections 21000 - 21177. 123 California Public Resources Code Section 853(b). 124 CPUC Decision 04-04-068 (2004). 125 California Public Utilities Code Section 7901.1(a). 126 California Government Code Section 50030. 127 Section 253(c) of the 1996 Telecommunications Act. 128 Ibid. 129 Government Code Section 66000 et seq. 130 114 Cal. App 4th 642 (2003). 131 Ibid. 132 Verizon California Inc.'s Opening Comments in R. 03-04-003. 133 Email transmittals between CPUC Staff and representatives of Verizon and SBC on January 14, 2005; January 26, 2005; January 27, 2005. 134 "Broadband Facilities and ROW," July 13, 2002, NARUC; 135 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. 136 North Coast Times, June 5,2003; see also 137 CPUC Decision 96-12-120. 138 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. 139 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..." 140 California Government Code Section 53066.3.(1). 141 California Government Code Section 53066.3 (d). 142 1996 Telecommunications Act, Section 653. FCC Rules, Section 76.1500-76.1505. 143 CPUC General Order 96-A. 144 CPUC Decision D.05-01-032. 145 Comments of Disability Rights Advocates and the Center for Independent Living, San Francisco meeting on February 10, 2004. 146 Disability Watch, p. 93. 147 Amador-Tuolumne Community Action Agency, Opening Comments in R. 03-04-003. 148 Pew Internet & American Life Project, "The Ever-Shifting Internet Population," April 2003.

149 Ibid., p. 16.

150 New Valley Connexions' Public Policy Roadmap for Improving Broadband Access, December 2003, pp. 18-20. 151 New Valley Connexions, p. 3. 152 On August 3, 2004, the FCC suspended any new grants from the E-rate program. On November 29, 2004, funding for the program resumed.

153 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.

154 SBC's affiliate, SBC Advanced Solutions, Inc. (SBC ASI) has filed intrastate tariffes with the CPUC for advanced telecommunications services and provides CTF discounts on these services when purchased by qualifying organizations. SBC ASI is the only broadband provider to do so. 155 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. 156 Of the respondents not identifying the CTF program as a support mechanism used, 58% stated that they did not know about the program. 157 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. 158 Percentages calculated from data downloaded from 159 Federal Computer Week, October 1, 2003. 160 161 Federal Register, Vol. 69, No. 60, March 29, 2004. 162 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. 163 164 Application information can be found at, and DLT regulation at 165 166 167 168 169 170 Before the Idaho Public Utilities Commission, Case No PRJ-T-03-1, Order No. 29318. 171 172 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, then Tier 3. 173 174 175 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; 176 Loring Wirbel, "SBC Shifts Focus from DSL to Passive Optical Nets," EE Times, November 27, 2001. 177 "Carriers Get Technical Help in Bringing HDTV to Market," Telephony Online, January 17, 2005. 178 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. 179 Financial Times, June 22, 2004. 180 June 22, 2004, 181 SureWest,, July 9, 2003; "Cisco Helps SureWest Deploy Integrated Data, Voice and Video,", 2004. 182 Verizon, "Verizon Deploying Fiber Optics to Homes and Businesses in 6 More States in Northeast and Mid-Atlantic,", October 21, 2004; 183 Jim Duffy, "Verizon details FTTP plans," Network World, July 26, 2004; 184 Verizon, 185 SBC,, November 11, 2004. 186 Comcast, 187 Sam Kennedy, "RCN Offers Fastest Access to Internet," The Morning Call, August 31, 2004. 188 Wi-Fi Planet,; Intel, 189 FCC Notice of Proposed Rulemaking (FCC 04-113), May 13, 2004. 190 For a more detailed discussion, visit the FCC website, "Spectrum Policy Task Force Proceedings and Initiatives," at 191 An office of the NTIA, U.S. Department of Commerce. 192 193 MetroFi, 194 Ground Control, 195 CPUC Staff interview with Ground Control, December 8, 2004. 196 CPUC Staff interview with DirecWay representative during April 2003 Broadband Summit in Washington, D.C. 197 The 15 states are: Arizona, Florida, Hawaii, Indiana, Maryland, Massachusetts, Michigan, Missouri, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas and Washington. 198 The CPUC filed comments in this docket, expressing support for the FCC's efforts. 199 News Release, FCC 04-245 Report and Order , ET Docket No. 04-37. 200 Pew Internet and American Life Project, Rural Areas and the Internet, February 17, 2004. 201 Jupiter Research, The DSL Market Opportunity (January 2004) 202 Gubbins, supra, p. 9. 203 TNS Telecom Report, October 2004. 204 205 "Here Comes Cable...," Wall Street Journal, September 13, 2004. 206 207 208 "Meet the New TV Guy," Wall Street Journal, November 24, 2004. 209 "Here Comes Cable...," Wall Street Journal, September 13, 2004. 210 "Cable Titans Discuss Offering Cellular Services...," Wall Street Journal, November 8, 2004. 211 See Verizon online, Comcast, SBC Yahoo. 212 See, e.g., Ed Fletcher, "West Sac Mayor Rolls Out Plan for Free Wi-Fi," The Sacramento Bee, April 6, 2005; Miguel Helft, "Whining Telcos Battle Cities' Broadband Plans, San Jose Mercury News, March 30, 2005. 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. 213 Ibid. 214 "The UTOPIA Story: Wholesale Telecommunication Services and Regional Development", Roger Black, Deputy Director and Chief Operating Officer, Utah Telecommunications Open Infrastructure Agency, August 2004.

215 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.

216 Carol Wilson, "FTTP `Revolution': Bell Companies," Telephony, February 28, 2005. 217 CPUC Staff interview with Cerritos representative, January 31, 2005. 218 John Gartner, "Public Fiber Tough to Swallow," Wired, September 13, 2004.,1282,64902,00.html. 219 Visit of Assigned Commissioner to TDV, September 2004; see also 220 221 The CPUC currently offers webcasting of its Commission meetings. 222 Only members of the public who are not parties to any proceeding can use the time set aside for comments from the public. 223 AB 1874 would have required state agencies to act within 45 days of the application.

224 Section 851 states:

225 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."

226 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. 227 Citizens Housing Corporation project

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