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A first for small businesses in high-speed Internet age

January 6, 2014

Schat.net on Main Street in Bishop received a Certificate of Public Convenience and Necessity from the California Public Utilities Commission last month. The certificate will make the independent Internet provider eligible for federal grants that will help it improve and expand its services. Photo by Mike Gervais

Schat.net of Bishop got an early Christmas present last month when the California Public Utilities Commission approved a resolution that provides it with a Certificate of Public Convenience and Necessity. This is the first time the CPUC has approved such a certificate, which is typically reserved for telephone companies, rather than independent Internet service providers.
Schat.net applied for the CPCN last February to qualify for California Advanced Services Fund grants for two proposed last-mile projects in Mono and Inyo counties.
According to Marianne Schat of Schat.net, the local service provider has applied for federal grants for a series of upgrades that will allow for faster, more reliable service to all customers, and new services to some of the more remote regions of the Eastern Sierra.
“This puts us in a whole different category, and allows us to bring a lot more to the area,” Schat said. “We have two grant applications in to up our Internet service in Inyo and Mono counties,” including two new “last-mile” projects to bring high-speed Internet to Death Valley and Crowley Lake.
Schat said that the grants Schat.net applied for last year require a CPCN. “We applied without the certificate, hoping they would overturn the requirement,” Schat said. She explained that the grants moved forward before the request for a certificate was approved. “Now we’re in the final stages of the grant, and we just need to show that we have the matching funds, which is a lot,” she said.
If and when the grants are awarded, Schat.net will use the funds to improve and expand its services. To do that, “the Internet service provider has to upgrade equipment. We have to go to our customers and upgrade our whole backbone. We’re doing that now, but this will help us get it done faster,” Schat said.
Schat said the company will not be required to lay new fiber-optic cable from the Digital 395 backbone to the remote communities it is planning to serve, “so it’s not going to take forever” to complete the project and the grant money will help speed it along.
When the project is complete, “we’ll have higher speeds than almost everyone else,” Schat said.
Schat.net will have a better idea of a time-line for improved services once the grants are officially awarded.
Schat.net owner Aaron Schat pointed out that, since the Digital 395 fiber-optic backbone was completed late last year, “we have already increased our customers’ speeds (in most areas). But we cover a wide area, from Reno to Keeler, so it takes time.” This grant, he said, will speed up the delivery of high-speed connections “to our more remote areas.”
Marianne Schat said the award of the CPCN is a milestone for independent Internet service providers like Schat.net who need the certificate to be eligible for federal grants.
“A lot of people have been trying to get it, and we’ve been applying for it, but (until now) nobody’s gotten approval,” she said. “It means that we will be more closely regulated, but the good thing is we’re qualified for this federal funding.”
Currently, there are several independent Internet service providers from across the state applying for a CPCN that will allow them to begin applying for federal grants to improve services while large telephone companies such as AT&T and Verizon are moving away from telephone systems (which the certificate was designed for) towards Internet provider status. By moving away from the telephone service, those companies will be moving away from CPUC regulations.
But for the independent Internet service companies, that’s good news because, unlike the larger corporations, they rely on grant funding for major projects and improvements.
Schat she is proud that Schat.net was the first company to be awarded the CPCN and pave the way for other smaller businesses.

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