BILL NUMBER: SB 3	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Padilla

                        DECEMBER 6, 2010

   An act to amend Section 739.3 of the Public Utilities Code,
relating to telecommunications.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 3, as introduced, Padilla. Telecommunications: universal
service.
   (1) Existing law, the federal Telecommunications Act of 1996,
establishes a program of cooperative federalism for the regulation of
telecommunications to attain the goal of local competition, while
implementing specific, predictable, and sufficient federal and state
mechanisms to preserve and advance universal service, consistent with
certain universal service principles. The universal service
principles include the principle that consumers in all regions of the
nation, including low-income consumers and those in rural, insular,
and high cost areas, should have access to telecommunications and
information services, including interexchange services and advanced
telecommunications and information services, that are reasonably
comparable to those services provided in urban areas and that are
available at rates that are reasonably comparable to rates charged
for similar services in urban areas.
   Existing law authorizes the Public Utilities Commission to
supervise and regulate every public utility in the state, including
telephone corporations, and to fix just and reasonable rates and
charges for the public utility. Existing law establishes the
California High-Cost Fund-A Administrative Committee Fund (CHCF-A)
and the California High-Cost Fund-B Administrative Committee Fund
(CHCF-B) in the State Treasury, and provides that moneys in the funds
are the proceeds of rates and are held in trust for the benefit of
ratepayers and to compensate telephone corporations for their costs
of providing universal service. Moneys in the funds may only be
expended to accomplish specified telecommunications universal service
programs, upon appropriation in the annual Budget Act or upon
supplemental appropriation.
   Existing law, until January 1, 2012, requires the commission to
develop, implement, and maintain a suitable, competitively neutral,
and broadbased program to establish a fair and equitable local rate
support structure aided by universal service rate support to
telephone corporations serving areas where the cost of providing
services exceeds rates charged by providers, as determined by the
commission. Existing law provides that it applies only to the CHCF-B
program.
   This bill would extend the repeal date of that program requirement
until January 1, 2013.
   (2) Under existing law, a violation of the Public Utilities Act or
an order or direction of the commission is a crime.
   Because the program that is extended under the provisions of this
bill is within the act and a decision or order of the commission
implements the program requirements, a violation of these provisions
would impose a state-mandated local program by creating a new crime.
   (3) This bill would constitute a change in state statute that
would result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature.
   (4) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 739.3 of the Public Utilities Code is amended
to read:
   739.3.  (a) The commission shall develop, implement, and maintain
a suitable program to establish a fair and equitable local rate
structure aided by universal service rate support to small
independent telephone corporations serving rural and small
metropolitan areas. The purpose of the program shall be to promote
the goals of universal telephone service and to reduce any disparity
in the rates charged by those companies.
   (b) For purposes of this section, small independent telephone
corporations means those independent telephone corporations serving
rural areas, as determined by the commission.
   (c) The commission shall develop, implement, and maintain a
suitable, competitively neutral, and broadbased program to establish
a fair and equitable local rate support structure aided by universal
service rate support to telephone corporations serving areas where
the cost of providing services exceeds rates charged by providers, as
determined by the commission. The commission shall develop and
implement the program on or before October 1, 1996. The purpose of
the program shall be to promote the goals of universal telephone
service and to reduce any disparity in the rates charged by those
companies. Except as otherwise explicitly provided, this subdivision
does not limit the manner in which the commission collects and
disburses funds, and does not limit the manner in which it may
include or exclude the revenue of contributing entities in
structuring the program.
   (d) The commission shall structure the programs required by this
section so that any charge imposed to promote the goals of universal
service reasonably equals the value of the benefits of universal
service to contributing entities and their subscribers.
   (e) The commission shall investigate reducing the level of
universal service rate support, or elimination of universal service
rate support in service areas with demonstrated competition.
   (f) By July 1, 2010, the commission shall prepare and submit to
the Legislature a report on the affordability of basic telephone
service in areas funded by the California High-Cost Fund-B
Administrative Committee Fund. The report, among other things, shall
provide information on prices and costs of basic telephone service,
and penetration and utilization rates of basic telephone service by
income, ethnicity, age, and other demographic characteristics, using
surveys and other methods of identifying the factors affecting
affordability of basic telephone service for customers and
noncustomers. The report shall describe the characteristics of
noncustomers and their reasons for not having telephone service. The
report shall identify those persons most at risk of losing basic
telephone service. The report shall be funded out of the California
High-Cost Fund-B Administrative Committee Fund.
   (g) This section shall only apply to the California High-Cost
Fund-B Administrative Committee Fund program.
   (h) This section shall remain in effect only until January 1,
 2012   2013  , and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1,  2012   2013  , deletes or
extends that date.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.