Amended in Senate June 10, 2013

Amended in Assembly April 16, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1407

Introduced by begin delete Committee on Utilities and Commerce (Bradford (Chair), Bonilla, Fong, Garcia, Quirk, Rendon, Skinner, and Williams) end delete begin insert Assembly Member Bradford end insert

March 13, 2013

An act to amend begin delete Section 380 of end delete begin insert Sections 871.5 and 873 of, to repeal Sections 871.7, 878, 879, 879.5, 880, 882, and 883 of, and to repeal and add Sections 872, 874, 875, 876, and 877 of, end insert the Public Utilities Code, relating to public begin delete utilities end delete begin insert communications end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 1407, as amended, begin delete Committee on Utilities and Commerce end delete   begin insert Bradford end insert . Public utilities: begin delete resource adequacy requirement. end delete begin insert voice communications service: lifeline program. end insert

begin insert

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. Under the act, universal service is an evolving level of telecommunications services that the Federal Communications Commission is required to establish periodically, taking into account advances in telecommunications and information technologies and services. Pursuant to the act, the Federal Communications Commission has established and revised a lifeline program that is available for qualifying low-income consumers.

end insert begin insert

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including telephone corporations. The Moore Universal Telephone Service Act establishes the Universal Lifeline Telephone Service program in order to provide low-income households with access to affordable basic residential telephone service. Existing law establishes the Universal Lifeline Telephone Service Trust Administrative Committee Fund in the State Treasury.

end insert begin insert

This bill would recast the Moore Universal Telephone Service Act so that it would provide a household, as defined, having an eligible customer, as defined, with high-quality voice communications service at affordable rates. The bill would state the intent of the Legislature to ensure that California residents have access to technologies and services and to promote technological neutrality by giving lifeline customers the ability to choose the communications provider and service that best meet their unique needs, while encouraging providers to participate in the lifeline program.

end insert begin insert

The Moore Universal Telephone Service Act requires the Public Utilities Commission to annually designate a class of lifeline service necessary to meet minimum residential, as defined, communications needs, to set the rates and charges for that service, to develop eligibility criteria for that service, and to assess the degree of achievement of universal service, including telephone penetration rates by income, ethnicity, and geography.

end insert begin insert

The bill would instead require the Public Utilities Commission to annually develop eligibility criteria for customers to participate in the program, assess the penetration rates for lifeline service by income, ethnicity, and geography, and to prepare and submit a report to the Legislature on the fiscal status of the lifeline program that includes a statement of the lifeline program surcharge level and revenues produced by the surcharge, the size of the Universal Lifeline Telephone Service Trust Administrative Committee Fund, the reason for a decline or increase in the size of the fund, if applicable, an accounting of program expenses, and an evaluation of options for controlling those expenses and increasing program efficiency.

end insert begin insert

The Moore Universal Telephone Service Act requires that the Universal Lifeline Telephone Service rates be set at no more than 50% of either the basic rate for measured residential telephone service or the basic flat residential telephone rate service, as applicable, exclusive of federally mandated end user access charges that are available to the residential subscriber. Existing law requires that the lifeline telephone service installation or connection charge, or both, be not more than 50% of the charge for basic residential service installation or connection.

end insert begin insert

The bill would repeal these requirements and instead require that through and including December 31, 2014, the nonrecurring service charge for commencing voice service for a single voice connection for a lifeline customer be no greater than $10. Until and including December 31, 2014, the lifeline provider would be eligible for reimbursement from the fund for the difference between the nonrecurring charge paid by a lifeline subscriber and the nonrecurring charge the lifeline provider charges for identical services in the ordinary course of business to subscribers that are not eligible customers, subject to the limitation that the reimbursement can be no more than $40 per connection. Beginning January 1, 2015, the Public Utilities Commission would be authorized to annually increase the nonrecurring service charge incurred by eligible customers, and the lifeline provider connection reimbursement, by an amount in proportion to the increase, if any, to the Consumer Price Index for All Urban Consumers (CPI-U). The bill would require that every eligible customer be given a discount of $11.85 per month, in addition to any federally supported lifeline discount provided to customers of an eligible telecommunications carrier, and would, beginning January 1, 2015, authorize the commission to annually adjust the support amount in proportion to the increase, if any, in the CPI-U. The bill would provide that an eligible customer is not entitled to any combined monthly federal and state lifeline support in excess of the customer’s monthly rate. The bill would require that state lifeline support be provided only after federal lifeline support, if any, is received by an eligible customer.

end insert begin insert

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

end insert begin insert

Because the provisions of this bill would be a part of the act and would require action by the Public Utilities Commission to implement its requirements, and because the bill would expand the class of lifeline providers, the bill would impose a state-mandated local program by expanding the scope of a crime.

end insert begin insert

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.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert begin delete

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. Existing law requires the commission, in consultation with the Independent System Operator to establish resource adequacy requirements for all load-serving entities to achieve specified objectives.

end delete begin delete

This bill would additionally require the Public Utilities Commission to consult with the State Energy Resources Conservation and Development Commission to establish the resource adequacy requirements.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert begin insert

The Legislature finds and declares all of the
following:

end insert begin insert

(a) Technological advances in Internet and mobile
communications have resulted in a variety of new voice
communications offerings beyond traditional wireline telephone
service, such as mobile telephony service, commonly known as
cellular telephone service, and Voice over Internet Protocol
service.

end insert begin insert

(b) California consumers are increasingly choosing these new
voice communications services, while conversely, traditional
telephone subscriptions are decreasing.

end insert begin insert

(c) The Moore Universal Telephone Service Act should be
modernized in order to maintain the vitality of its original policy
goals by acknowledging that technologies, services, and business
models other than traditional telephone service can be used to
offer low-income citizens access to affordable, reliable, and
high-quality communications service.

end insert begin insert

(d) In enacting this act, it is the intent of the Legislature to
ensure that California residents have access to technologies and
services and to promote technological neutrality by giving lifeline
customers the ability to choose the voice communications service
provider and service that best meets their unique needs, while
encouraging mobile telephony service and other nontraditional
providers to participate in the lifeline program.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 871.5 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

871.5.  

The Legislature finds and declares all of the following:

(a) The offering of high-quality begin delete basic telephone end delete begin insert voice
communications end insert service at affordable rates to the greatest number
of citizens has been a longstanding goal of the state.

(b) The Moore Universal Telephone Service Act begin delete has been, and
continues to be, end delete begin insert is end insert an important means for achieving universal
service by making begin delete basic telephone end delete begin insert voice communications end insert service
affordable to low-income households through the begin delete creation of a end delete
lifeline begin delete class of service end delete begin insert program end insert .

begin insert

(c) The Federal Communications Commission has recently
reformed and modernized the federal universal service fund’s
lifeline program by, among other things, adopting a technology
neutral approach to lifeline.

end insert begin delete

(c)

end delete

begin insert (d) end insert  Every means should be employed by the commission begin delete and
telephone corporations end delete to ensure that every household qualified
to receive lifeline begin delete telephone service end delete begin insert support end insert is informed of and is
afforded the opportunity to begin delete subscribe to that service end delete begin insert obtain that
support. Nothing in this section effects an eligible
telecommunications carrier’s obligations to advertise the
availability of its offerings and charges for those offerings using
media of general distribution under Section 54.201(d)(2) of Title
47 of the Code of Federal Regulations. The commission shall not
impose any additional advertising obligations on lifeline providers end insert .

begin delete

(d)

end delete

begin insert (e) end insert  The furnishing of lifeline begin delete telephone service end delete begin insert support end insert is in the
public begin delete interest and should be supported fairly and equitably by
every telephone corporation, and the end delete begin insert interest. The end insert commission, in
administering the lifeline begin delete telephone service end delete program, should
implement the program in a way that is equitable,
nondiscriminatory, and without competitive consequences for the
telecommunications industry in California.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 871.7 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

871.7.  

The Legislature finds and declares all of the following:

(a) The Moore Universal Telephone Service Act, enacted in
1987, was intended to offer high quality basic telephone service
at affordable rates to the greatest number of California residents,
and has become an important means of achieving universal service
by making residential service affordable to low-income citizens
through the creation of a lifeline class of service.

(b) Factors such as competition and technological innovation
are resulting in the convergence of a variety of telecommunications
technologies offering an expanded range of telecommunications
services to users that incorporate voice, video, and data. These
technologies have differing regulatory regimes and jurisdictions.

(c) It is the intent of the Legislature that the commission initiate
a proceeding investigating the feasibility of redefining universal
telephone service by incorporating two-way voice, video, and data
service as components of basic service. It is the Legislature’s
further intent that, to the extent that the incorporation is feasible,
that it promote equity of access to high-speed communications
networks, the Internet, and other services to the extent that those
services provide social benefits that include all of the following:

(1) Improving the quality of life among the residents of
California.

(2) Expanding access to public and private resources for
education, training, and commerce.

(3) Increasing access to public resources enhancing public health
and safety.

(4) Assisting in bridging the “digital divide” through expanded
access to new technologies by low-income, disabled, or otherwise
disadvantaged Californians.

(5) Shifting traffic patterns by enabling telecommuting, thereby
helping to improve air quality in all areas of the state and mitigating
the need for highway expansion.

(d) For purposes of this section, the term “feasibility” means
consistency with all of the following:

(1) Technological and competitive neutrality.

(2) Equitable distribution of the funding burden for redefined
universal service as described in subdivision (c), among all affected
consumers and industries, thereby ensuring that regulated utilities’
ratepayers do not bear a disproportionate share of funding
responsibility.

(3) Benefits that justify the costs.

end delete

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 872 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

872.  

As used in this article, “household” means a residential
dwelling that is the principal place of residence of the lifeline
telephone service subscriber, and excludes any industrial,
commercial, or other nonresidential building.

end delete

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 872 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

begin insert

begin insert 872. end insert   

As used in this article, the following terms have the
following meanings:

(a) “Eligible customer” means any person who has, after
providing adequate supporting documentation, been determined
to be eligible to receive lifeline support by a third-party lifeline
administrator. A lifeline provider shall not be obligated to provide,
nor shall any person be entitled to receive, any lifeline support
until that person has been determined to be an eligible customer
by a third-party lifeline administrator. A customer applying to
become an eligible customer shall not be required to first establish
service as a condition for lifeline eligibility.

(b) “Household” means any individual or group of individuals
who are living together at the same address as one economic unit.
A household may include related and unrelated persons. An
“economic unit” consists of all adult individuals contributing to
and sharing in the income and expenses of a household. An adult
is any person 18 years of age or older. If an adult has no or
minimal income, and lives with someone who provides financial
support to him or her, both people shall be considered part of the
same household. Children under 18 years of age living with their
parents or guardians are considered to be part of the same
household as their parents or guardians.

(c) (1) “Lifeline provider” means any telephone corporation
or alternative provider that meets all of the following requirements:

(A) Provides voice communications services that are eligible
for federal universal service support pursuant to Section 54.101
(a) of Title 47 of the Code of Federal Regulations.

(B) Collects and remits surcharges for the lifeline program.

(C) Voluntarily chooses to participate in the lifeline program
or is otherwise mandated to offer basic service as of January 1,
2013.

(D) Agrees to comply with, and be held liable for any violations
of, this article and any commission rules implementing this article,
as enforced by the commission.

(2) Any “lifeline provider,” including a local exchange carrier,
may use any technology, or multiple technologies, within the
provider’s service territory.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 873 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

873.  

begin delete (a) end delete begin delete   end delete begin delete (1) end delete begin delete   end delete The commission shall annually do all of the
following:

begin delete

(A) Designate a class of lifeline service necessary to meet
minimum communications needs.

end delete begin delete

(B) Set the rates and charges for that service.

end delete begin delete

(C)

end delete

begin insert (a) end insert  Develop eligibility criteria for begin delete that service end delete begin insert eligible customers
to participate in the lifeline program. The commission shall not
increase lifeline income limits from those in effect on January 1,
2013, except for an annual adjustment to reflect inflation based
on changes to the United States Consumer Price Index for All
Urban Consumers (CPI-U) end insert .

begin delete

(D)

end delete

begin insert (b) end insert  Assess the begin delete degree of achievement of universal service,
including telephone end delete penetration rates begin insert for the lifeline program end insert by
income, ethnicity, and geography. begin insert This information shall be
annually reported to the Legislature by the commission in a
document that can be made public. end insert

begin delete

(2) This information shall be annually reported to the Legislature
by the commission in a document which can be made public.

end delete begin insert

(c) Not withstanding Section 10231.5 of the Government Code,
not later than March 31 of each year, prepare and submit a report
to the Legislature on the fiscal status of the lifeline program. The
report shall be submitted in compliance with Section 9795 of the
Government Code. The report shall include a statement of the
lifeline program surcharge level and revenues produced by the
surcharge, the size of the Universal Lifeline Telephone Service
Trust Administrative Committee Fund, the reason for a decline or
increase in the size of the fund, if applicable, an accounting of
program expenses, and an evaluation of options for controlling
those expenses and increasing program efficiency.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 874 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

874.  

The lifeline telephone service rates and charges shall be
as follows:

(a) In a residential subscriber’s service area where measured
service is not available, the lifeline telephone service rates shall
not be more than 50 percent of the rates for basic flat rate service,
exclusive of federally mandated end user access charges, available
to the residential subscriber.

(b) In a residential subscriber’s service area where measured
service is available, the subscriber may elect either of the
following:

(1) A lifeline telephone service measured rate of not more than
50 percent of the basic rate for measured service, exclusive of
federally mandated end user access charges, available to the
residential subscriber.

(2) A lifeline flat rate of not more than 50 percent of the rates
for basic flat rate service, exclusive of federally mandated end user
access charges, available to the residential subscriber.

(c) The lifeline telephone service installation or connection
charge, or both, shall not be more than 50 percent of the charge
for basic residential service installation or connection, or both.
The commission may limit the number of installation and
connection charges, or both, that may be incurred at the reduced
rate in any given period.

(d) There shall be no charge to the residential customer who
has filed a valid eligibility statement for changing out of lifeline
service.

(e) The commission shall assess whether there is a problem with
customers who fraudulently obtain lifeline telephone service. If
the commission determines that there is a problem, it shall
recommend and promulgate appropriate solutions. This assessment
and the solutions determined by the commission shall not, in and
of themselves, change the procedures developed pursuant to
Section 876.

end delete

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 874 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

begin insert

begin insert 874. end insert   

(a) Until and including December 31, 2014, the
nonrecurring service charge for commencing voice service for a
single voice connection for a lifeline customer shall be no more
than ten dollars ($10). Until and including December 31, 2014, a
lifeline provider shall be eligible for reimbursement from the
Universal Lifeline Telephone Service Trust Administrative
Committee Fund for the difference between the nonrecurring
charge paid by a lifeline subscriber and the nonrecurring charge
the lifeline provider charges for identical service in the ordinary
course of business to subscribers that are not eligible customers,
subject to the limitation that the reimbursement to the lifeline
provider shall be no more than forty dollars ($40) per connection.

(b) Beginning January 1, 2015, the commission may annually
increase the nonrecurring service charge incurred by eligible
customers by an amount in proportion to the increase, if any, to
the Consumer Price Index for All Urban Consumers (CPI-U). If
the commission exercises this authority, then it also shall increase
the lifeline provider connection reimbursement by a proportionate
amount.

end insert

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 875 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

875.  

(a) In addition to Section 874, every lifeline telephone
service subscriber shall be given an allowance, reduced by the
amount of any credit or allowance authorized by the Federal
Communications Commission, equal to the then current or
announced federally mandated residential end user access charges.

(b) The commission may, in a separate proceeding, establish
procedures necessary to ensure that the lifeline telephone service
program qualifies for any federal funds available for the support
of those programs.

end delete

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 875 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

begin insert

begin insert 875. end insert   

(a) Except as provided in subdivision (b), every eligible
customer shall be given a discount of eleven dollars and eighty-five
cents ($11.85) per month, in addition to any federally supported
lifeline discount provided to customers of an eligible
telecommunications carrier. Beginning January 1, 2015, the
commission may annually adjust the support amount in proportion
to the increase, if any, in the Consumer Price Index for All Urban
Consumers (CPI-U).

(b) An eligible customer shall not be entitled to any combined
monthly federal and state lifeline support in excess of the eligible
customer’s monthly rate. State lifeline support shall be provided
only after federal lifeline support, if any, is received by an eligible
customer. Lifeline providers shall be eligible for reimbursement
from the Universal Lifeline Telephone Service Trust Administrative
Committee Fund in an amount not to exceed the amount of state
lifeline support that is actually received by an eligible customer.

(c) To the extent necessary to support the lifeline program, the
commission may assess a lifeline surcharge in an amount not to
exceed 3.3 percent of the subscriber’s charges for intrastate
telephone communications services or interconnected Voice over
Internet Protocol (VoIP) service. The methodology for applying
the lifeline surcharge to interconnected VoIP service shall be that
set forth in subdivision (e) of Section 285.

end insert

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Section 876 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

876.  

The commission shall require every telephone corporation
providing telephone service within a service area to file a schedule
of rates and charges providing a class of lifeline telephone service.
Every telephone corporation providing service within a service
area shall inform all eligible subscribers of the availability of
lifeline telephone service, and how they may qualify for and obtain
service, and shall accept applications for lifeline telephone service
according to procedures specified by the commission.

end delete

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 876 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

begin insert

begin insert 876. end insert   

(a) The commission shall, upon a request of a provider,
designate as lifeline providers a telephone corporation or
alternative provider that meets the requirements of subdivision (c)
of Section 872. The commission shall, upon a request of a provider,
designate the lifeline provider as an eligible telecommunications
carrier. The commission shall not, as a condition for either
designation, impose any obligation that exceeds the obligations
imposed on state-designated eligible telecommunications carriers
in Subpart E (commencing with Section 54.400) of Part 54 of Title
47 of the Code of Federal Regulations.

(b) The commission shall require a lifeline provider to offer
only the minimum service elements to eligible lifeline customers
set forth in Section 54.101 (a) of Title 47 of the Code of Federal
Regulations. Lifeline support may be applied to any bundle or
package that includes voice service.

end insert

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 877 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

877.  

Nothing in this article precludes the commission from
changing any rate established pursuant to Section 873, either
specifically or pursuant to any general restructuring of all telephone
rates, charges, and classifications.

end delete

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 877 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

begin insert

begin insert 877. end insert   

(a) Lifeline discounts shall be limited to one per
household. Nothing in this section effects the ability of a member
of a household to obtain an additional lifeline discount if that
member is medically certified as deaf or hard of hearing and has
continuous access to teletypewriter equipment, or its functional
equivalent, pursuant to Section 2881, and has been determined to
be an eligible customer by a third-party lifeline administrator.

(b) An applicant for lifeline support may report only one address
in the state as a principal place of residence.

end insert

begin insert

begin insert SEC. 15. end insert   

end insert

begin insert Section 878 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

878.  

A lifeline telephone service subscriber shall be provided
with one lifeline subscription, as defined by the commission, at
his or her principal place of residence, and no other member of
that subscriber’s family or household who maintains residence at
that place is eligible for lifeline telephone service.

An applicant for lifeline telephone service may report only one
address in this state as the principal place of residence.

end delete

begin insert

begin insert SEC. 16. end insert   

end insert

begin insert Section 879 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

879.  

(a) The commission shall, at least annually, initiate a
proceeding to set rates for lifeline telephone service. All telephone
corporations providing lifeline telephone service shall annually
file, on a date set by the commission, proposed lifeline telephone
service rates and a statement of projected revenue needs to meet
the funding requirements to provide lifeline telephone service to
qualified subscribers, together with proposed funding methods to
provide the necessary funding. These funding methods shall include
identification of those services whose rates shall be adjusted to
provide the necessary funding.

(b) The commission shall commence a proceeding within 30
days after the date set for the filings required in subdivision (a),
giving interested parties an opportunity to comment on the
proposed rates and funding requirements and the proposed funding
methods. The commission may change the rates, funding
requirements, and funding methods proposed by the telephone
corporations in any manner necessary, including reasonably
spreading the funding among the services offered by the telephone
corporations, to meet the public interest. Within 60 days of the
annual filing, the commission shall issue an order setting lifeline
telephone service rates and funding methods for each telephone
corporation making a filing as required in subdivision (a). The
commission may establish a lifeline service pool composed of the
rate adjustments and surcharges imposed by the commission
pursuant to this section for the purpose of funding lifeline telephone
service.

(c) Any order issued by the commission pursuant to this section
shall require telephone corporations providing lifeline telephone
service to apply the funding requirement in the form of a surcharge
to service rates which may be separately identified on the bills of
customers using those services. The commission shall not allow
any surcharge under this section on the rates charged by those
telephone corporations for lifeline telephone service.

(d) The commission shall permit telephone corporations
operating between service areas to adjust the rates of any service
which may be affected by any surcharge imposed by this section.

end delete

begin insert

begin insert SEC. 17. end insert   

end insert

begin insert Section 879.5 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

879.5.  

Notwithstanding Section 879, the commission shall
issue its initial order adopting required rates and funding
requirements not later than October 31, 1987, and prior to the
issuance of that order, may fund lifeline telephone service through
the use of an interim surcharge on service rates for telephone
service provided by telephone corporations operating between
service areas. The interim surcharge shall not exceed 4 percent of
the service rates.

end delete

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 880 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

880.  

The commission may determine any question of fact in
its administration of this article.

end delete

begin insert

begin insert SEC. 19. end insert   

end insert

begin insert Section 882 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

882.  

(a) The Public Utilities Commission shall, as soon as
practicable, open a proceeding or proceedings to, or as part of
existing proceedings shall, consider ways to ensure that advanced
telecommunications services are made available as ubiquitously
and economically as possible, in a timely fashion, to California’s
citizens, institutions, and businesses. The proceeding or
proceedings should be completed within one year of
commencement.

(b) The proceeding or proceedings shall develop rules,
procedures, orders, or strategies, or all of these, that seek to achieve
the following goals:

(1) To provide all citizens and businesses with access to the
widest possible array of advanced communications services.

(2) To provide the state’s educational and health care institutions
with access to advanced communications services.

(3) To ensure cost-effective deployment of technology so as to
protect ratepayers’ interests and the affordability of
telecommunications services.

(c) In the proceeding or proceedings, the commission should
also consider, but need not limit its consideration to, all of the
following:

(1) Whether the definition of universal service should be
broadened.

(2) How to encourage the timely and economic development
of an advanced public communications infrastructure, which may
include a variety of competitive providers.

end delete

begin insert

begin insert SEC. 20. end insert   

end insert

begin insert Section 883 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

883.  

(a) The commission shall, on or before February 1, 2001,
issue an order initiating an investigation and opening a proceeding
to examine the current and future definitions of universal service.
That proceeding shall include public hearings that encourage
participation by a broad and diverse range of interests from all
areas of the state, including, but not limited to, all of the following:

(1) Consumer groups.

(2) Communication service providers, including all providers
of high-speed access services.

(3) Facilities-based telephone providers.

(4) Information service providers and Internet access providers.

(5) Rural and urban users.

(6) Public interest groups.

(7) Representatives of small and large businesses and industry.

(8) Local agencies.

(9) State agencies, including, but not limited to, all of the
following:

(A) The Business, Transportation and Housing Agency.

(B) The State and Consumer Services Agency.

(C) The State Department of Education.

(D) The State Department of Health Services.

(E) The California State Library.

(10) Colleges and universities.

(b) The objectives of the proceeding set forth in subdivision (a)
shall include all of the following:

(1) To investigate the feasibility of redefining universal service
in light of current trends toward accelerated convergence of voice,
video, and data, with an emphasis on the role of basic
telecommunications and Internet services in the workplace, in
education and workforce training, access to health care, and
increased public safety.

(2) To evaluate the extent to which technological changes have
reduced the relevance of existing regulatory regimes given their
current segmentation based upon technology.

(3) To receive broad-based input from a cross section of
interested parties and make recommendations on whether video,
data, and Internet service providers should be incorporated into
an enhanced Universal Lifeline Service program, as specified,
including relevant policy recommendations regarding regulatory
and statutory changes and funding options that are consistent with
the principles set forth in subdivision (c) of Section 871.7.

(4) To reevaluate prior definitions of basic service in a manner
that will, to the extent feasible, effectively incorporate the latest
technologies to provide all California residents with all of the
following:

(A) Improved quality of life.

(B) Expanded access to public and private resources for
education, training, and commerce.

(C) Increased access to public resources enhancing public health
and safety.

(D) Assistance in bridging the “digital divide” through expanded
access to new technologies by low income, disabled, or otherwise
disadvantaged Californians.

(5) To assess projected costs of providing enhanced universal
lifeline service in accordance with the intent of this article, and to
delineate the subsidy support needed to maintain the redefined
scope of universal service in a competitive market.

(6) To design and recommend an equitable and broad-based
subsidy support mechanism for universal service in competitive
markets in a manner that conforms with subdivision (c) of Section
871.7.

(7) To develop a process to periodically review and revise the
definition of universal service to reflect new technologies and
markets consistent with subdivision (c) of Section 871.7.

(8) To consider whether similar regulatory treatment for the
provision of similar services is appropriate and feasible.

(c) In conducting its investigation, the commission shall take
into account the role played by a number of diverse but convergent
industries and providers, even though many of these entities are
not subject to economic regulation by the commission or any other
government entity.

(d) The recommendations of the commission shall be consistent
with state policies for telecommunications as set forth in Section
709, and with all of the following principles:

(1) Universal service shall, to the extent feasible, be provided
at affordable prices regardless of linguistic, cultural, ethnic,
physical, financial, and geographic considerations.

(2) Consumers shall be provided access to all information
needed to allow timely and informed choices about
telecommunications products and services that are part of the
universal service program and how best to use them.

(3) Education, health care, community, and government
institutions shall be positioned as early recipients of new and
emerging technologies so as to maximize the economic and social
benefits of these services.

(e) The commission shall complete its investigation and report
to the Legislature its findings and recommendations on or before
January 1, 2002.

end delete

begin insert

begin insert SEC. 21. end insert   

end insert

begin insert By May 1, 2014, the Public Utilities Commission
shall revise General Order 153 to bring the lifeline program into
compliance with the changes made by this act. The commission
shall allow a lifeline provider a reasonable period of time, as
determined by the commission, to implement the requirements or
obligations of the Moore Universal Telephone Service Act as
amended by this act. The commission shall not adopt any
obligations, rules, or standards that exceed, or otherwise add to,
those that are expressly required by this act. end insert

begin insert

begin insert SEC. 22. end insert   

end insert begin insert

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.

end insert

begin delete

SECTION 1.  

Section 380 of the Public Utilities Code is
amended to read:

380.  

(a) The commission, in consultation with the Independent
System Operator and the Energy Commission, shall establish
resource adequacy requirements for all load-serving entities.

(b) In establishing resource adequacy requirements, the
commission shall achieve all of the following objectives:

(1) Facilitate development of new generating capacity and
retention of existing generating capacity that is economic and
needed.

(2) Allocate equitably the cost of generating capacity and
prevent the shifting of costs between customer classes.

(3) Minimize enforcement requirements and costs.

(4) Maximize the ability of community choice aggregators to
determine the generation resources used to serve their customers.

(c) Each load-serving entity shall maintain physical generating
capacity adequate to meet its load requirements, including, but not
limited to, peak demand and planning and operating reserves. The
generating capacity shall be deliverable to locations and at times
as may be necessary to provide reliable electric service.

(d) Each load-serving entity shall, at a minimum, meet the most
recent minimum planning reserve and reliability criteria approved
by the Board of Trustees of the Western Systems Coordinating
Council or the Western Electricity Coordinating Council.

(e) The commission shall implement and enforce the resource
adequacy requirements established in accordance with this section
in a nondiscriminatory manner. Each load-serving entity shall be
subject to the same requirements for resource adequacy and the
renewables portfolio standard program that are applicable to
electrical corporations pursuant to this section, or otherwise
required by law, or by order or decision of the commission. The
commission shall exercise its enforcement powers to ensure
compliance by all load-serving entities.

(f) The commission shall require sufficient information,
including, but not limited to, anticipated load, actual load, and
measures undertaken by a load-serving entity to ensure resource
adequacy, to be reported to enable the commission to determine
compliance with the resource adequacy requirements established
by the commission.

(g) An electrical corporation’s costs of meeting resource
adequacy requirements, including, but not limited to, the costs
associated with system reliability and local area reliability, that
are determined to be reasonable by the commission, or are
otherwise recoverable under a procurement plan approved by the
commission pursuant to Section 454.5, shall be fully recoverable
from those customers on whose behalf the costs are incurred, as
determined by the commission, at the time the commitment to
incur the cost is made, on a fully nonbypassable basis, as
determined by the commission. The commission shall exclude any
amounts authorized to be recovered pursuant to Section 366.2
when authorizing the amount of costs to be recovered from
customers of a community choice aggregator or from customers
that purchase electricity through a direct transaction pursuant to
this subdivision.

(h) The commission shall determine and authorize the most
efficient and equitable means for achieving all of the following:

(1) Meeting the objectives of this section.

(2) Ensuring that investment is made in new generating capacity.

(3) Ensuring that existing generating capacity that is economic
is retained.

(4) Ensuring that the cost of generating capacity is allocated
equitably.

(5) Ensuring that community choice aggregators can determine
the generation resources used to serve their customers.

(i) In making the determination pursuant to subdivision (h), the
commission may consider a centralized resource adequacy
mechanism among other options.

(j) For purposes of this section, “load-serving entity” means an
electrical corporation, electric service provider, or community
choice aggregator. “Load-serving entity” does not include any of
the following:

(1) A local publicly owned electric utility.

(2) The State Water Resources Development System commonly
known as the State Water Project.

(3)  Customer generation located on the customer’s site or
providing electric service through arrangements authorized by
Section 218, if the customer generation, or the load it serves, meets
one of the following criteria:

(A) It takes standby service from the electrical corporation on
a commission-approved rate schedule that provides for adequate
backup planning and operating reserves for the standby customer
class.

(B) It is not physically interconnected to the electric transmission
or distribution grid, so that, if the customer generation fails, backup
electricity is not supplied from the electricity grid.

(C) There is physical assurance that the load served by the
customer generation will be curtailed concurrently and
commensurately with an outage of the customer generation.

end delete