A $138 million initiative to extend high-speed Internet capacity to about 150,000 rural California households — including 3,520 in Sonoma and Mendocino counties — has collapsed, forcing advocates to start from scratch after nearly three years of planning.

The failure of the the Golden Bear Broadband proposal to get funding endorsement from the state Public Utilities Commission presents a substantial setback for local organizers and frustrated consumers who stood to benefit from a new fiber optic-based network designed to connect 16 northern counties and provide the anchor for expansion of fast, affordable service across more than a quarter of the state.

“It was a devastating blow,” Sonoma County Supervisor Efren Carrillo said of Golden Bear's withdrawal from the plan, “and we'll just have to figure out what next steps to take.”

Broadband “is a necessity,” said Cazadero resident Mike Nicholls, manager of a countywide effort to expand high-speed Internet service called Access Sonoma Broadband. “It's not a luxury.”

The Golden Bear project represented critical investment in geographically remote, rugged and sparsely populated areas left behind by the digital age because of their limited financial appeal to established commercial carriers.

And yet< some of those major carriers helped scuttle the plan, which was contingent on a $119 million state grant, by challenging the need for new fiber optic routes where Golden Bear proposed to build them.

The project would have included a stretch of Highway 1 corridor along the North Coast that offered hope to isolated, coastal communities from Bodega Bay to Sea Ranch, and north to Westport in Mendocino County. It also would have included mountainous areas like Cazadero and Occidental, where folks have been scraping together slow, high-cost, spotty Internet access through any means necessary.

Rings of fiber optic line looped between the coast and a north-south route along Highway 101 through Petaluma on the south end, Laytonville on the north and Ukiah and Boonville in between, would have ensured connectivity had any portion failed temporarily.

The coast plan also included up to 33 fiber-fed wireless towers extending service beyond the main fiber optic routes, as well as connections to 50 so-called anchor institutions such as schools, libraries and health delivery facilities.

Regional representatives for Comcast, AT&T and Verizon did not return phone calls seeking comment for this story. But a spokesman for that California Public Utilities Commission, which administers the grants, said the project was analyzed fairly.

It's not clear how many people would have benefitted from the extension of service under Golden Bear, given discrepancies in the state's accounting of those who remain without service and changes to service coverage in some areas since the grant proposal was filed in January 2013. Golden Bear's infrastructure was intended to allow expansion over several decades.

But for those who will continue without service, the loss hits “very, very hard,” said Trish Steel, administrative coordinator for Broadband Alliance of Mendocino County.

“It's potentially a big loss for, not only residents, but for businesses — not only along the (Route 1) corridor, but extending from that corridor inland,” said Steve Sharpe, an analyst for the Sonoma County Economic Development Board.

“In this county, we've got a lot of businesses, we've got a lot of tourist industry, we've got a lot of ag business,” Sharpe said. “We've got anchor institutions — schools, health care facilities — that will not be able to have reliable, high speed and high quality broadband connection.”

The crucial need for universal high-speed Internet service is acknowledged in state and federal grant programs aimed at ensuring broadband deployment to the isolated areas of the nation according to established benchmarks and time frames.

These programs and potential subsidies have driven grassroots efforts on the North Coast and elsewhere to gather support for broadband access, in part through regional planning groups developed under the California Advanced Services Fund grant program overseen by the California Public Utilities Commission.

Sonoma and Mendocino counties are among those that eventually partnered with Golden Bear Broadband, a limited liability corporation created by Native Business Enterprise and Siskiyou Telephone Company to address needs in Northern California.

The project would not have provided immediate broadband service to everyone. It was mostly what's called a “middle mile” project, providing the platform from which they and other providers could offer affordable “last mile” service to individual homes and businesses.

The ambitious proposal was dependent on $119 million from the state grant fund created by legislators to bridge the “digital divide” that leaves rural areas at significant economic disadvantage.

However, the rules, local advocates say, favor traditional commercial carriers — “incumbents” — that essentially have right of first refusal on expansion in territories where they have a toehold.

These carriers can challenge grant applications on claims that some geographical areas already have service, or that proposed construction would simply replicate existing infrastructure and thus not warrant public subsidies.

Seven entities challenged the grant application Golden Bear submitted last year to the California Public Utilities Commission, or CPUC — many of them the same carriers that counties and regional groups had approached to help extend service in the first place, said Cathy Emerson, manager for two of the north state consortia involved.

CPUC spokesman Christopher Chow said agency staff made every effort to evaluate the applications and the challenges fairly, including extensive communication and site visits to Sonoma and Mendocino counties. Between the unusually large size, scope and complexity of the Golden Bear project and analysis of the challenges, it was determined that a “significant portion” of the proposal would have replicated existing infrastructure, the agency said.

Thus, after months of analysis and debate, Golden Bear was left with scaling its proposal down to four, small, disconnected pockets deemed “unserved,” Chief Executive Officer Mitch Drake said,

Faced with moving ahead on a piecemeal project without the initial plan's economies of scale, Golden Bear withdraw its application, Drake said.

“Our point to the (CPUC) staff was that in some cases, yeah, there was network,” he said, “but it was not affordable network to us or to an end-user.

“We would have had to have charged some pretty high rates in order to move forward, and the intent of the program was to get everybody access to affordable service, and the rates that the carriers were charging was just way too much,” Drake said.

News of Golden Bear's decision spread in part at a February community meeting in Occidental attended by more than 170 people, mostly residents of Joy Road and tributary roads desperate to acquire decent Internet service.

“Demoralized” and “dejected,” is how neighborhood organizer Carl Wahl described the mood in its aftermath.

Participants pleaded for answers from three CPUC staff members in attendance, describing the often extreme financial and logistical lengths to which they've gone to acquire Internet service, including high-cost satellite connections with long delays and data caps that curtail their use. Monthly bills of $300 and up are not uncommon.

Many still don't have service adequate to conduct personal business, let alone do substantial professional work at home, whether because they can't teleconference, share documents, access databases, download health records and x-rays, log into online markets or even send email reliably.

One woman admitted spending $3,000 a month for two private T1 fiber optic lines that she said are the only way she can conduct business out of her home.

“We're living in this golden age of information,” software engineer Danny Bernstein said. “Access, and reasonably priced access, is key.”

Jim Robinson, who helped organize the meeting with partners in a committee called Connect Joy Road & Area, has wireless service made possible by his willingness to don climbing gear and ascend 125 feet into a redwood tree near his home to install a receiver. It requires occasional maintenance, so he's made the climb several times since the antenna was installed in 2004. Even so, service is unreliable.

But it's still more than neighbor Ben Ewing has, so Ewing piggybacks off his neighbor's signal — a feat accomplished only when Ewing puts his iPad or cell phone in a particular window of his home.

Yet mapping used by the CPUC to identify what portions of the state still need Internet service indicate Joy Road and environs has full digital access.

The lapse between reality and what's represented to the state agency stems from a mapping system that is based on census blocks and assumes an entire block is served if only one home has service, staffers said.

But it also reflects advertising through which providers purport to have certain levels of service available, even if the truth on the ground doesn't support those claims, they said.

If an address can receive, say, Internet speeds that meet the state's definition of “served” or even “underserved” once in a while, the block receives that designation, even if service mostly falls below the defined threshold.

Additionally, the same companies that have decided against extending service to remote, low-density communities — presumably because of unfavorable cost-benefit analyses — essentially have right of first refusal under the state grant program, CPUC staffers and advocates said.

“We're looking at a significant Catch-22,” Emerson said. “The federal and the state programs are trying very hard to make use of legislative moneys that have been collected, intended to be used for broadband deployment. And yet the very language of the legislation has been so effectively edited to the favor of the incumbents that it's extremely difficult to try to offer services to these rural-most pockets.”

“I call this the great stalemate,” said Drake. “There's a huge need in Northern California, and we've got a program that was designed to take care of the need, and we've got incumbent carriers who made this financial decision, for one reason or another, not to serve these rural communities. But at the same time they are the biggest opponents, preventing anyone from doing anything about it.”

The Golden Bear proposal, at least, appears to have “shined a light” on the need for improved service in Northern California, and has even nudged some of the major carriers forward slightly in some areas, he and others said.

Several local advocates said they're beginning to see some incremental movement on the part of local carriers along the coast, primarily. Company representatives have been turning up at local meetings, as well, advocates said.

Santa Rosa-based Sonic.net also is in the midst of extending combined broadband and phone service to several west and north county communities, including Occidental, that within weeks will provide an option for some of those in the Joy Road area, chief executive Dane Jasper said.

In addition, Jasper and his staff have met with neighborhood organizers to help create a “project road map” through which they could create a formal entity like a co-op, acquire engineering assistance and apply directly for a grant from the CPUC, he and his marketing director, Tara Sharp, said.

“Something's going to happen,” said Nicholls, Access Sonoma Broadband manager. “There are people demanding service.”

©2014 The Press Democrat (Santa Rosa, Calif.)