Race to the finish
Potential $8 million grant could close the “last mile.”
On December 3, 2015 the California Public Utilities Commission will decide whether to approve a resolution to grant almost $8 million to Race Communications to extend “last mile” optical fiber internet to 541 households in Mono County, including South Chalfant, Benton, Swall Meadows, Crowley Lake, Lee Vining, and Mono City.
Race, based in Burlingame, CA, filed an application for the grant from the California Advanced Services Fund (CASF) for its Gigafy Mono Project in December of last year. This project is intended to extend fiber-to-the premises (FTTP) network over a 6.33-square-mile area at an estimated cost of $11,887 per household. This grant will cover about 60 percent of the cost of the project, while Race will provide the other 40 percent from its existing capital up front, according to a draft of the resolution written by the CPUC.
“Race recognizes that the cost per home for building this project is significantly higher than Races’ other applications in the past. Race has explained that to connect Swall Meadows to the existing Race node in Tom’s Place, a second mile fiber connection must be constructed which adds to capital cost … This second mile construction with difficult terrain is the main driver of the increased cost per home,” the CPUC resolution states.
In 2010, then-governor Arnold Schwarzenegger signed signed Senate Bill 1040, which codified the CASF grant program and expanded the CASF fund. In 2012, the CPUC implemented new guidelines for funding, which included the allowance of a maximum grant award of 70 percent of project costs for “unserved” areas and 60 percent for “underserved” areas. Thus, the proposed grant to Race Communications is the maximum amount that the CASF is allowed to give.
The Gigafy Mono Project is designed to accommodate “underserved” areas in Mono County, which the new provisions in SB 1040 define as, “where broadband is available, but no wireline or wireless facilities-based provider offers service at advertised speeds of at least 6 megabits per second (Mbps) downstream and 1.5 Mbps upstream.”
The communities of Lee Vining and Mono City, according to the resolution, are not technically “underserved” because they do have greater access to wireless communication than the provisions describe, but “Race explains that the justification for combining Benton, Benton Hot Springs, Lee Vining, Mono City, and South Chalfant areas into one application is based on the fact that it will use shared resources to complete the project which will help it drive (sic) benefit from economic scalability.”
“Lee Vining and Mono City aren’t underserved from a wireless standpoint,” said Nate Greenberg, IT Director for Mono County, “but the argument is around the availability of mobile broadband. The County sees broadband as critical infrastructure.”
Greenberg said the County supports this project “and broadband projects in general because we believe strongly that communications networks are of the same value as power, water, and sewer.”
The draft of the resolution to the CPUC cites several letters written to Race Communications by the residents of these underserved communities. One letter requested that CPUC “not interpret mobile and wireless broadband as a substitution for physical connections but, instead, as a form of utilities infrastructure redundancy which make communications in small, dispersed, and isolated communities secure, reliable, and affordable.”
Greenberg said the County Board of Supervisors has written letters and been in support of the Gigafy Mono Project since before the resolution was drafted. The Board’s letter insists that students in rural communities will fall behind without reliable high-speed internet and that the connections will make it possible to access healthcare services as well.
Greenberg pointed out that in Paradise, for instance, “cell phone coverage doesn’t exist in 50 percent of that community, and they’ve got significant communications deficiencies on the landline side. In winter storms, they’ll lose landline communications, and you’ve got people like doctors or Sheriff’s Department officers who live in these communities, and during these periods when they need to be called for services, they’re not available. At the same time you’ve got elderly people who depend on the ability to dial 911 and so [the Gigafy Mono Project] alleviates some of this by putting in modern leading-edge technology in the form of fiber optics.”
The communications breakdown during the Round Fire was cited as a perfect example of why the area needs redundancy in its communications systems. The Board of Supervisors’ letter addressed this, noting that the fire “caused loss of Verizon Wireless service, which then caused three days of communication collapse for the communities in Mono County.” The letter also notes that the network and internet service that were on Digital 395 remained functional “and first responders were able to use the network for relief communication.”
The resolution states that Verizon was issued a grant in the amount of $286,398 by the CASF to provide broadband to the communities of Swall Meadows and Crowley Lake, but that the grant amount expired before Verizon provided service. Verizon is currently in the process of selling its wireless communications in the area to Frontier wireless, said CPUC’s Telecommunications Advisor Bill Johnston.
If the resolution is passed in December, up to $7,633,459 will be paid out of the CASF fund to Race Communications for the Gigafy Mono Project. If the grant award is not subject to income taxes, the grant amount will be reduced by up to $1,202,575 of Contribution in Aid to Construction (which covers these taxes).
The CPUC, as stated in its resolution, expects Race to complete the project in 22 months from the start date. Furthermore, Race is required to guarantee the price of service offered in the project area for two years—Race has quoted recurring rates starting at $25 monthly for residential “entry level speed” and maxing out at $200 monthly for “max level speed” for business accounts.
Race Communications specializes in these types of “last mile” projects, according to the CPUC’s Johnston. Greenberg said that Mono County has been in conversations with Race Communications since the completion of the Digital 395 Project, and that this would be their second endeavor in Mono County.
“My personal goal is to try to get 80 to 90 percent of our population base covered with gigabit service by 2017,” he said, “and this is one more step toward that.”
