BILL ANALYSIS �
AB 1299
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1299 (Bradford)
As Amended September 6, 2013
Majority vote
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|ASSEMBLY: |58-17|(May 29, 2013) |SENATE: |26-11|(September 11, |
| | | | | |2013) |
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Original Committee Reference: U. & C.
SUMMARY : Requires the Public Utilities Commission (PUC) to fund
grants for the deployment and adoption of broadband services in
publicly supported housing communities using the California
Advanced Services Program (CASF). Specifically, this bill :
1)Authorizes PUC to appropriate $20 million from the Broadband
Infrastructure Grant Account to award grants and loans to
connect broadband networks to publicly supported multitenant
affordable housing dwellings.
2)Authorizes PUC to appropriate $5 million from the Broadband
Infrastructure Grant Account to award grants to fund broadband
adoption programs, as specified.
3)Defines publicly supported housing community and non-profit
affordable housing.
4)Specifies if such funds are not awarded by December 31, 2016,
that they may be used for another purpose within CASF.
5)Requires PUC to award grants and loans for this program in a
manner that reflects the statewide distribution of those
publicly supported housing communities.
6)States PUC shall prepare a report beginning January 1, 2015,
on the implementation status of the publicly supported housing
communities' broadband deployment and adoption efforts.
The Senate amendments :
1)Create the Broadband Public Housing Account within the CASF.
2)Define publicly supported housing community and non-profit
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affordable housing.
3)Specify the PUC shall transfer money only if the PUC is
authorized to collect additional funds.
4)Require the PUC, in reviewing a project application under this
subdivision, to consider the availability of other funding
sources for that project and whether the applicant has sought
funding from, or participated in, any reasonably available
program.
5) State the PUC may require an applicant to provide match
funding, and shall not deny funding for a project solely
because the applicant is receiving funding from another
source.
6)Make the passage of the bill contingent upon the chaptering of
SB 740 (Padilla) of the current legislative session.
7)Add double jointing language to SB 740 (Padilla) to avoid
chaptering out.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)On-going costs of $150,000 from the Broadband Public Housing
Account within the CASF (special) for administrative costs to
the PUC to administer the program.
2)Cost pressures of up to $25 million CASF for the redirection
of funds.
COMMENTS :
1)The CASF : In 2007, as part of a High-Cost Fund-B rulemaking,
PUC created CASF to help promote the deployment of broadband
infrastructure in unserved areas of the state. As part of the
decision, PUC reduced the annual allocation of money to the
High-Cost Fund-B by $315.4 million and implemented a phased-in
reduction in the ratepayer surcharge from 1.3% on all
intrastate calls to .25%.
PUC created the program and assessed a surcharge on telephone
ratepayers to fund the program, however, PUC did not have
clear legislative authority to assess the surcharge or to
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expend the funds. SB 1193 (Padilla), Chapter 393, Statutes of
2008, provided that authority by statutorily establishing
CASF; however, SB 1193 prohibited PUC from collecting more
than $100 million.
After the enactment of the American Reinvestment and Recovery
Act of 2009 (Recovery Act), PUC revised CASF program to allow
California companies to use CASF grants as a match for
Recovery Act broadband grants. AB 1555 (V. Manuel P�rez),
Chapter 24, Statutes of 2009, expanded CASF eligibility to any
entity applying for CASF funding in conjunction with a
Recovery Act funding request.
Subsequently Governor Schwarzenegger signed into law SB 1040
(Padilla), Chapter 317, Statutes of 2010, which provided an
additional $125 million, and expanded the program into three
accounts:
a) The Broadband Infrastructure Grant Account funds the
capital costs of broadband infrastructure projects in
unserved and underserved areas in California. Carriers
eligible to apply for a grant award must hold a certificate
of public convenience and necessity (CPCN) or Wireless
Identification Registration (WIR) from PUC.
b) The Rural and Urban Regional Broadband Consortia Grant
Account provides funding for the cost of broadband
deployment and adoption activities other than the capital
cost of facilities. Eligible recipients include, but is
not limited to local and regional governments, public
safety, K-12 education, health care and community based
organizations.
c) The Revolving Loan Account supplements financing for
projects also receiving CASF grant funding. Up to 20% of
total project cost is eligible for financing. Applicant
and project eligibility is the same as the Infrastructure
Grant Account.
2)Broadband in affordable housing communities : Barriers exist
in certain publicly supported and non-profit affordable
housing developments in California. This bill authorizes PUC
to appropriate $20 million from the Broadband Infrastructure
Grant Account to fund grants for deployment of broadband
services and adoption programs in publicly-supported housing
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communities. Representatives from publicly-supported and
non-profit housing communities, situated primarily in urban
areas, testified at the hearing that a majority of their
properties lack reliable broadband connectivity. The housing
panelists claimed the costs associated with building or
upgrading the infrastructure and maintaining the network is
the primary barrier to receiving broadband services for the
many disadvantaged residents that reside in these affordable
housing developments. California Emerging Technology Fund
(CETF) conservatively estimates there are 200,000-250,000 such
publicly-supported housing units in California - the exact
number is being determined by further investigation by CETF
staff. Obtaining an approximate figure on the number of
unserved or underserved Californians who reside in affordable
housing dwellings is practically impossible. However, the
bill allows PUC to develop the appropriate policies and
criteria to awards grants that would effectively achieve the
goal of closing the digital gap in public housing communities
while also ensuring grants are distributed in a manner that
reflects the statewide distribution of the publicly supported
housing communities.
3)If you build it will they come ? Provisions in this bill
authorize PUC to appropriate $5 million to fund grants for
broadband adoption programs in publicly supported housing
communities. Deploying broadband services in a publicly
supported housing community would ensure the standard cables,
and infrastructure required for power, television and
telephone service is installed - which is a first step. On
the other hand it does not offer a guarantee that
disadvantaged residents will see the value in subscribing to
the broadband service. Factors contributing to a
disadvantaged residents' lack of enthusiasm to subscribe to
voice, cable or Internet service is notably the costs
associated with the subscription. In addition, a housing
resident may have limited knowledge in understanding the
benefits of digital literacy and the societal benefits of
adopting broadband services. Representatives from the housing
panel testified at the hearing that some of their properties
have free computer learning centers which provide their
residents with opportunity to access the Internet. Children
who reside at these properties can also utilize the computer
learning center to complete homework or conduct research for
other activities. With this bill, a publicly supported
housing community would be eligible to apply for a grant
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provided that the units in the housing community to be served
have existing broadband services or will have broadband
services at the time the grant for adoption is implement.
Eligible housing communities will also have the ability to
collaborate with a non-profit or public agency to assist in
implementation of a broadband adoption program.
4)Accountability and transparency : CASF is a public purpose
program funded by surcharges assessed on end user's telephone
bills throughout the state. It is therefore important that
the program achieve its objective and be transparent
throughout the process. This bill recognizes this need and
does so by requiring PUC to prepare a report due January 1,
2015, on the implementation status of the publicly supported
housing broadband deployment and adoption efforts.
Furthermore, provisions in this bill authorize PUC to use any
funds not awarded by December 31, 2016, for any other purpose
permitted under CASF.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
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