BILL ANALYSIS Ó
AB 1100
Page 1
Date of Hearing: April 15, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1100 (Levine) - As Introduced: February 22, 2013
SUBJECT : Telecommunications: California Teleconnect Fund
Administrative Committee Fund
SUMMARY : Eliminates the annual cap on California Teleconnect
Fund (CTF) discounts to California Community Colleges (CCC)
pursuant to California Public Utilities Commission (PUC)
Decision 08-06-020.
EXISTING LAW :
1)States the PUC has regulatory authority over public utilities,
including telephone corporations.
2)Authorizes the PUC to fix just and reasonable rates and
charges for public utilities.
3)Requires the PUC to develop, implement and administer a
program to advance universal service by providing discounted
rates to qualifying schools, community colleges, libraries,
hospitals, health clinics, and community organizations, known
as the CTF.
4)Establishes the California Teleconnect Fund Administrative
Committee Fund in the State Treasury and requires the moneys
in the fund, upon appropriation, be expended only for the CTF
program.
5)Establishes an annual limit on the reimbursement provided to
the CCC as part of the CTF program pursuant to PUC decision.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "the expansion of the CTF
program to include community colleges has aided the CPUC in
their efforts to bridge the "Digital Divide" since many rural
and low-income students are served by community colleges
campuses. Online education has recently become an important
tool, particularly in serving community colleges students who
don't have the means to attend college full time. But online
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education is dependent on a stable telecommunications
infrastructure. As online education grows in order to increase
access for students of all income levels, community colleges
should be treated as equal partners with other CTF participants
in the provision of affordable telecommunications services."
1)Overview : Pursuant to federal and state policies enacted, the
PUC established the
CTF in 1996. CTF provides a 50% discount on select
communications services and broadband Internet access services
for schools, libraries, hospitals and other non-profit
organizations. The subsidy is funded through a surcharge on
telephone customers' bills, currently set at 0.59% of intrastate
telephone charges.
In 2008, the PUC issued Decision 08-06-020 which expanded the
category of eligible schools to include community colleges,
while limiting the annual total amount for community colleges,
added internet services as an eligible service, allowed
certificated and registered carriers to offer internet service
without those services being subject to state regulation, and
made 2-1-1 Information and Referral Service providers and
California Telehealth Network participants categorically
eligible. Subsequently, SB 1437 (Padilla, Chapter 718, Statutes
of 2008), codified the PUC's Decision to include community
colleges among the entities that can apply for the CTF discount.
CTF, one of the PUC's universal service public purpose programs,
currently has more than 7,000 participating entities, including
more than 5,000 community organizations. For fiscal year
2013-14, program expenditures are projected at approximately
$92.4 million, representing more than 16% of the PUC's universal
service budget.
On January 31, 2013, the PUC opened Rulemaking 13.01.010 to
conduct a comprehensive examination of the CTF. The Rulemaking
will assess program goals and eligibility requirements for
participants, service providers and services. Presently comments
are being filed by interested parties regarding the CTF and a
final ruling may be issued by the end of 2013.
2)CCC annual cap : During the comment phase leading up to the
PUC's issuance of Decision
08-06-020, concerns were raised by parties that community
colleges might draw too much money from the CTF program. In
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response, the PUC imposed an annual limit on the amount
community colleges could draw from the fund. To date, no other
entity is subject an annual limit in the program.
Over the past four years, all 112 community college campuses and
72 districts participate in the CTF. Many of these community
colleges fund internet connectivity to all districts and
campuses from a scheduled Proposition 98 categorical called the
"Technology and Telecommunications Infrastructure Program
(TTIP). TTIP was fully funded to provide diverse circuit paths
to each campus and off-site center to operate technology
applications such as enrollment and education services, distance
learning education and emergency notification systems. Recent
budget cuts in the TTIP eliminated these diverse circuit paths.
The Governor's Proposed 2013-14 Budget identified a budget
augmentation of $16.9 million for the Chancellor's Office to
pursue the expansion of distance education, creation of an
online "Virtual Campus", and operation of one single centrally
located learning management system for all community college
campuses and districts. The author and sponsors opine that live
connectivity with the 72 individual district enterprise resource
planning systems are critical for the success of a "Virtual
Campus" operation. Negotiations between AT&T and the
Corporation for Education Network Initiatives in California
could potentially allow for restoration of these diverse
pathways to colleges and off-site centers beginning July 2013.
The community colleges view the current cap in CTF as a
deterrent for future projects.
The PUC opposes the bill for the following reasons: 1) the PUC
has not restricted participation of community colleges in the
CTF program; 2) the PUC has the discretion to increase the
annual funding carp if the present cap is deemed inadequate, and
3) eliminating the cap would reduce the PUC's flexibility in
addressing CTF program budget issues.
The PUC currently has the authority to increase the annual cap
for CCCs when appropriate, and recently did so in Resolution
T-17333. The current annual limit is set at $10,865,000 and
claims thus far for fiscal year 2013-14 have amounted to only
$1,934,022 - only 18% of total funds available.
The PUC's chart below summarizes the CCCs budget and
expenditures since 2008. Note that even though there is an
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annual cap, the budget has not limited CCC participation.
-----------------------------------------------------------------
| |FY 08-09 |FY 09-10 |FY 10-11 |FY 11-12 |FY 12-13 |
|---------------+---------+---------+---------+---------+---------|
|Claims |2,477,129|6,602,748|9,002,025|9,087,131|1,934,022|
| | | | | | |
|---------------+---------+---------+---------+---------+---------|
|Caps |4,462,000|7,874,000|10,393,00|10,599,00|10,865,00|
| | | | 0 | 0 | 0 |
|---------------+---------+---------+---------+---------+---------|
|Available |1,984,871|1,811,252|1,390,975|1,511,869|8,930,978|
| | | | | | |
|---------------+---------+---------+---------+---------+---------|
|Percent Used | 56% | 77% | 87% | 86% |18% |
-----------------------------------------------------------------
3)Suggested amendment : Since the Legislature authorizes the PUC
to appropriate a fixed
amount in the CTF budget, the PUC should retain the flexibility
to address any budget issues in the program. Therefore, the
author and this committee may wish to amend the bill as follows:
" Any funding limits the commission adopts to achieve program
goals shall not discriminate among program participants by
imposing limits upon a single class of participants."
REGISTERED SUPPORT / OPPOSITION :
Support
California Community Colleges Chancellor's Office
Corporation for Education Network Initiatives in California
(CENIC)
Kern Community College District
Los Angeles Community College District
Los Rios Community College District
West Kern Community College District
Opposition
California Public Utilities Commission (CPUC) (unless amended)
The Utility Reform Network (TURN)
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
AB 1100
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