BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 841 (Buchanan)
Hearing Date: 07/11/2011 Amended: 05/23/2011
Consultant: Brendan McCarthy Policy Vote: EU&C 10-0
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BILL SUMMARY: AB 841, an urgency measure, requires providers of
voice over internet protocol (VoIP) phone service to contribute
to the state's universal service programs.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
New revenues from VoIP Unknown additional revenues,
potentiallySpecial *
providers in the millions or tens of millions
* Several universal service funds administered by the Public
Utilities Commission .
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STAFF COMMENTS:
Under current law, the Public Utilities Commission oversees a
variety of programs to ensure universal access to
telecommunications services by California residents. These
programs support phone service in rural areas, for deaf and
disabled customers, and for low income customers. These programs
are supported by surcharges paid by telecommunications
customers, based on intrastate telephone calls. In 2011-12, the
Public Utilities Commission is projecting total expenditures
from these programs of about $650 million.
Under current law, providers of intrastate calls using voice
over internet protocol (VoIP) service are not required to
contribute to the state's universal access programs. (Some of
the large providers of VoIP service voluntarily collect and
remit charges for universal service to the Public Utilities
Commission.) A recent ruling by the Federal Communications
Commission requires such providers to contribute to federal
AB 841 (Buchanan)
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universal service programs and authorizes states to require them
to contribute to state universal service programs. The Public
Utilities Commission has recently begun a proceeding to consider
whether VoIP providers should contribute to universal service
programs.
AB 841 requires providers of intrastate calls using VoIP service
to contribute to the state's universal service programs. The
bill specifies that the authority of the Commission to collect
contributions for universal service programs, under the bill,
does not imply any other regulatory authority over VoIP
providers.
This bill is an urgency measure.
The Public Utilities Commission has already opened a proceeding
to address contributions to universal service programs by VoIP
providers. Therefore, there will be no additional administrative
costs to the Commission under the bill.
By extending the requirement to contribute to universal service
programs to VoIP providers, the bill will generate unknown
additional revenues. According to the Public Utilities
Commission, there are about 2.5 million VoIP users in the state.
While some VoIP carriers currently collect charges for universal
service programs, the share of total VoIP calls that are served
by these carriers is unknown. By bringing all VoIP calls into
the program, the bill will result in additional revenues for the
universal service programs. Those revenues could be in the
millions or tens of millions depending on how many VoIP
providers already contribute to these programs and their market
share. After the initial increase in revenues to the universal
service programs, including VoIP in these programs will keep
total revenues into these programs relatively steady as more
customers shift from traditional telephone service to VoIP
service.
SB 3 (Padilla) extends the sunset of one universal service
program, the High Cost Fund B program, and also requires VoIP
providers to contribute to universal service programs. That bill
is in the Assembly Appropriations Committee.
AB 841 (Buchanan)
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