BILL NUMBER: SB 3 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 20, 2011
AMENDED IN SENATE MAY 31, 2011
AMENDED IN SENATE APRIL 12, 2011
AMENDED IN SENATE MARCH 29, 2011
INTRODUCED BY Senator Padilla
(Coauthor: Senator Fuller)
DECEMBER 6, 2010
An act to amend Section Sections 275.6 and
739.3 of, and to add Section 270.5 to, the Public Utilities
Code, relating to telecommunications, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 3, as amended, 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 state's
universal service funds, including 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 each of the state's universal service
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, 2013, requires the
commission to 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 that serve rural areas and are subject to rate-of-return
regulation by the commission (the CHCF-A program). 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 (the CHCF-B program)
.
This bill would extend the repeal date of the CHCF-A
and CHCF-B program requirements until January 1,
2014 2015 .
(2) This bill would require the commission to require
contributions from intrastate revenues of interconnected Voice over
Internet Protocol service to support the universal service programs
interconnected Voice over Internet Protocol (VoIP)
service providers to collect and remit surcharges on their California
intrastate revenues in support of the universal service funds. The
bill would make this requirement operative only if AB 841 is not
enacted or fails to become effective on or
before January 1, 2012 .
(3) 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.
(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.
(5) This bill would declare that it is to take effect immediately
as an urgency statute.
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. The Legislature finds and declares all of the
following:
(a) Federal and state laws and regulations to promote universal
service have historically provided support for universal access to
landline voice telephone service.
(b) The Telecommunications Act of 1996 (Public Law 104-104)
provides that state regulations to preserve and advance universal
service shall not be inconsistent with the universal service
regulations adopted by the Federal Communications Commission (47
U.S.C. Sec. 254(f)).
(c) The Federal Communications Commission, in implementing the
National Broadband Plan, released in March 2010, has proposed
substantial changes to its universal service regulations in order to
increase accountability and efficiency and provide support for
universal access to broadband and voice service.
SEC. 2. Section 270.5 is added to the Public Utilities Code, to
read:
270.5. (a) The commission shall require contributions from
intrastate revenues of interconnected Voice over Internet Protocol
service, or VoIP service, as defined in Section 41019.5 of the
Revenue and Taxation Code, to support the universal service programs
identified in Section 270.
(b) This section shall not be construed to enlarge or diminish any
regulatory authority over VoIP service providers under existing law
except to grant explicit authority to require contributions pursuant
to subdivision (a).
270.5. (a) As used in this section, "interconnected Voice over
Internet Protocol (VoIP) service" has the same meaning as in Section
9.3 of Title 47 of the Code of Federal Regulations.
(b) The Legislature finds and declares that the sole purpose of
this section is to require the commission to impose the surcharges
pursuant to this section to ensure that end-use customers of
interconnected VoIP service providers contribute to the funds
enumerated in this section, and, therefore, this section does not
indicate the intent of the Legislature with respect to any other
purpose.
(c) The commission shall require interconnected VoIP service
providers to collect and remit surcharges on their California
intrastate revenues in support of the following public purpose
program funds:
(1) California High-Cost Fund-A Administrative Committee Fund
under Section 275.
(2) California High-Cost Fund-B Administrative Committee Fund
under Section 276.
(3) Universal Lifeline Telephone Service Trust Administrative
Committee Fund under Section 277.
(4) Deaf and Disabled Telecommunications Program Administrative
Committee Fund under Section 278.
(5) California Teleconnect Fund Administrative Committee Fund
under Section 280.
(6) California Advanced Services Fund under Section 281.
(d) The authority to impose a surcharge pursuant to this section
applies only to a surcharge imposed on end-use customers for
interconnected VoIP service provided to an end-use customer's place
of primary use that is located within California. As used in this
subdivision, "place of primary use" means the street address where
the end-use customer's use of interconnected VoIP service primarily
occurs, or a reasonable proxy as determined by the interconnected
VoIP service provider, such as the customer's registered location for
911 purposes.
(e) (1) For the purposes of determining what revenues are subject
to a surcharge imposed pursuant to this section, an interconnected
VoIP service provider may use any of the following methodologies to
identify intrastate revenues:
(A) The inverse of the interstate safe harbor percentage
established by the Federal Communications Commission for
interconnected VoIP service for federal universal service
contribution purposes, as these percentages may be revised from time
to time.
(B) A traffic study specific to the interconnected VoIP service
provider allocating revenues between the federal and state
jurisdictions.
(C) Another means of accurately apportioning interconnected VoIP
service between federal and state jurisdictions.
(2) The methodology chosen pursuant to paragraph (1) shall be
consistent with the revenue allocation methodology the provider uses
to determine its federal universal service contribution obligations.
(3) It is the intent of the Legislature that a traffic study
described in subparagraph (B) of paragraph (1) is excluded from
public inspection pursuant to Public Utilities Commission General
Order 66-C, because the disclosure of these studies would place the
provider at an unfair business disadvantage.
SEC. 3. Section 275.6 of the Public
Utilities Code is amended to read:
275.6. (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 that serve rural areas and are
subject to rate-of-return regulation by the commission. 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 that are subject to rate-of-return regulation by the
commission, as determined by the commission.
(c) 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.
(d) This section shall remain in effect only until January 1,
2013 2015 , and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 2013 2015 , deletes or
extends that date.
SEC. 3. SEC. 4. 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,
2014 2015 , and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 2014 2015 , deletes or
extends that date.
SEC. 5. Section 2 of this act shall only become
operative if Assembly Bill 841 is not enacted or fails to become
effective on or before January 1, 2012.
SEC. 4. SEC. 6. 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.
SEC. 5. SEC. 7. This act is an
urgency statute necessary for the immediate preservation of the
public peace, health, or safety within the meaning of Article IV of
the Constitution and shall go into immediate effect. The facts
constituting the necessity are:
In order to provide the Public Utilities Commission with express
authority to require providers of telephone quality voice
communication utilizing Voice over Internet Protocol to contribute to
the state's universal service programs, as proposed in pending
Rulemaking 11-01-008, it is necessary for this act to take effect
immediately.
In order to ensure the Public Utilities Commission has the
necessary statutory direction to fund the state's universal service
programs at the earliest possible time, it is necessary for this act
to take effect immediately.