BILL NUMBER: AB 238 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 6, 2015
AMENDED IN ASSEMBLY FEBRUARY 24, 2015
INTRODUCED BY Assembly Member Mark Stone
FEBRUARY 5, 2015
An act to amend Section 281 of the Public Utilities Code, relating
to telecommunications.
LEGISLATIVE COUNSEL'S DIGEST
AB 238, as amended, Mark Stone. Telecommunications: California
Advanced Services Fund
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations.
Existing law establishes, among other funds related to
telecommunications, the California Advanced Services Fund (CASF) in
the State Treasury. Existing law requires the commission to develop,
implement, and administer the CASF to encourage deployment of
high-quality advanced communications services to all Californians
that will promote economic growth, job creation, and substantial
social benefits of advanced information and communications
technologies, as provided in specified decisions of the commission
and in the CASF statute. Existing law requires the commission to
give priority to projects that provide last-mile broadband access to
households that are unserved by an existing
facilities-based broadband provider.
This bill would define "broadband" for purposes of these
provisions as advanced telecommunication services with specified
advertised speeds. speeds and would authorize
the commission to revise the definition, as specified. The bill would
state the intent of the Legislature that the commission give
additional priority to projects providing broadband access to
unserved or underserved households.
Existing law provides that entities that are not telephone
corporations are eligible to apply for funding from the CASF for
projects to provide last-mile broadband access to households that are
unserved. Existing law provides that local government entities may
be eligible for infrastructure grants only if the infrastructure
projects are for unserved households or businesses.
This bill would make projects that provide last-mile broadband
access solely to households that are underserved also eligible for
funding. For entities that are local governments, the bill would
eliminate the requirement that the infrastructure projects be for
unserved households or businesses.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares all of the
following:
(1) In the Broadband Availability in America report, released on
January 30, 2015, the Federal Communications Commission (FCC) found
that the rate of deployment of advanced telecommunications services
is failing to keep up with today's advanced, high-quality voice,
data, graphics, and video offerings.
(2) After evaluating advances in technology, market offerings by
broadband providers, and consumer demand, the FCC updated the
definition of broadband to mean 25 megabits per second (Mbps)
downstream and three Mbps upstream speed.
(3) In California, home to the development of much of the world's
most advanced telecommunications technology, 2.6 million people do
not have access to any services offering wireline
25Mbps/3Mbps 25 Mbps/3 Mbps broadband speeds.
The lack of access especially affects people living in rural
counties.
(4) In today's digital landscape, access to proper broadband
service is a necessity for the workplace, education, civic
engagement, and economic competitiveness. California cannot fall
behind in securing access to robust broadband for all of its
residents, and it must continue to be a leader in developing advanced
telecommunications infrastructure for all.
(b) It is the intent of the Legislature to enact legislation to
pursue the deployment of advanced telecommunications services with
broadband speeds of at least 25 Mbps downstream and 3 Mbps upstream
in all areas of the state.
(c) It is the intent of the Legislature that the Public Utilities
Commission encourage the deployment of broadband access pursuant to
Section 706(a) of the Telecommunications Act of 1996 (47 U.S.C. Sec.
1302(a)).
SEC. 2. Section 281 of the Public Utilities Code is amended to
read:
281. (a) The commission shall develop, implement, and administer
the California Advanced Services Fund program to encourage deployment
of high-quality advanced communications services to all Californians
that will promote economic growth, job creation, and the substantial
social benefits of advanced information and communications
technologies, consistent with this section.
(b) (1) The goal of the program is to approve funding for
infrastructure projects that will provide broadband access to no less
than 98 percent of California households.
(2) (A) In approving infrastructure
projects, the commission shall give priority to projects that provide
last-mile broadband access to households that are unserved by an
existing facilities-based broadband provider. The commission shall
provide each applicant, and any party challenging an application, the
opportunity to demonstrate actual levels of broadband service in the
project area, which the commission shall consider in reviewing the
application.
(B) It is the intent of the Legislature that the commission give
additional priority to projects providing broadband access to
unserved or underserved households, as defined in commission Decision
12-02-015.
(3) (A) For purposes of this section,
"broadband" means advanced communication services at advertised
speeds of at least 25 megabits per second (Mbps) downstream and three
Mbps upstream.
(B) If the Federal Communications Commission adopts a definition
for "advanced telecommunication capability" that provides for a
faster speed than that specified in subparagraph (A), the commission
may revise the definition of "broadband" to be consistent with that
federal definition.
(c) The commission shall establish the following accounts within
the fund:
(1) The Broadband Infrastructure Grant Account.
(2) The Rural and Urban Regional Broadband Consortia Grant
Account.
(3) The Broadband Infrastructure Revolving Loan Account.
(4) The Broadband Public Housing Account.
(d) (1) All moneys collected by the surcharge authorized by the
commission pursuant to commission Decision 07-12-054 shall be
transmitted to the commission pursuant to a schedule established by
the commission. The commission shall transfer the moneys received to
the Controller for deposit in the California Advanced Services Fund.
Moneys collected on and after January 1, 2011, shall be deposited in
the following amounts in the following accounts:
(A) One hundred ninety million dollars ($190,000,000) into the
Broadband Infrastructure Grant Account.
(B) Ten million dollars ($10,000,000) into the Rural and Urban
Regional Broadband Consortia Grant Account.
(C) Fifteen million dollars ($15,000,000) into the Broadband
Infrastructure Revolving Loan Account.
(2) All interest earned on moneys in the fund shall be deposited
in the fund.
(3) The commission shall not collect moneys, by imposing the
surcharge described in paragraph (1) for deposit in the fund, in an
amount that exceeds one hundred million dollars ($100,000,000) before
January 1, 2011. On and after January 1, 2011, the commission may
collect an additional sum not to exceed two hundred fifteen million
dollars ($215,000,000), for a sum total of moneys collected by
imposing the surcharge described in paragraph (1) not to exceed three
hundred fifteen million dollars ($315,000,000). The commission may
collect the additional sum beginning with the calendar year starting
on January 1, 2011, and continuing through the 2020 calendar year, in
an amount not to exceed twenty-five million dollars ($25,000,000)
per year, unless the commission determines that collecting a higher
amount in any year will not result in an increase in the total amount
of all surcharges collected from telephone customers that year.
(e) (1) All moneys in the California Advanced Services Fund shall
be available, upon appropriation by the Legislature, to the
commission for the program administered by the commission pursuant to
this section, including the costs incurred by the commission in
developing, implementing, and administering the program and the fund.
(2) Notwithstanding any other law and for the sole purpose of
providing matching funds pursuant to the federal American Recovery
and Reinvestment Act of 2009 (Public Law 111-5), any entity eligible
for funding pursuant to that act shall be eligible to apply to
participate in the program administered by the commission pursuant to
this section, if that entity otherwise satisfies the eligibility
requirements under that program. This section does not impede the
ability of an incumbent local exchange carrier, as defined by
subsection (h) of Section 251 of Title 47 of the United States Code,
that is regulated under a rate of return regulatory structure, to
recover, in rate base, California infrastructure investment not
provided through federal or state grant funds for facilities that
provide broadband service and California intrastate voice service.
(3) Notwithstanding subdivision (b) of Section 270, an entity that
is not a telephone corporation shall be eligible to apply to
participate in the program administered by the commission pursuant to
this section to provide access to broadband to an unserved or
underserved household, as defined in commission Decision
12-02-015, household, if the entity otherwise
meets the eligibility requirements and complies with program
requirements established by the commission. These requirements shall
include all of the following:
(A) That projects under this paragraph provide last-mile broadband
access to households that are unserved or underserved by
an existing facilities-based broadband provider and only receive
funding to provide broadband access to households that are
unserved or underserved, as defined in commission Decision 12-02-015.
those households.
(B) That funding for a project providing broadband access to an
underserved household shall not be approved until after any existing
facilities-based provider has an opportunity to demonstrate to the
commission that it will, within a reasonable timeframe, upgrade
existing service. An existing facilities-based provider may, but is
not required to, apply for funding under this section to make that
upgrade.
(C) That the commission shall provide each applicant, and any
party challenging an application, the opportunity to demonstrate
actual levels of broadband service in the project area, which the
commission shall consider in reviewing the application.
(D) That a local governmental agency may be eligible for an
infrastructure grant only if the infrastructure project is
for an unserved household or business, the commission has
conducted an open application process, and no other eligible entity
applied.
(E) That the commission shall establish a service list of
interested parties to be notified of California Advanced Services
Fund applications.
(f) Moneys in the Rural and Urban Regional Broadband Consortia
Grant Account shall be available for grants to eligible consortia to
fund the cost of broadband deployment activities other than the
capital cost of facilities, as specified by the commission. An
eligible consortium may include, as specified by the commission,
representatives of organizations, including, but not limited to,
local and regional government, public safety, elementary and
secondary education, health care, libraries, postsecondary education,
community-based organizations, tourism, parks and recreation,
agricultural, and business, and is not required to have as its lead
fiscal agent an entity with a certificate of public convenience and
necessity.
(g) Moneys in the Broadband Infrastructure Revolving Loan Account
shall be available to finance capital costs of broadband facilities
not funded by a grant from the Broadband Infrastructure Grant
Account. The commission shall periodically set interest rates on the
loans based on surveys of existing financial markets.
(h) (1) For purposes of this subdivision, the following terms have
the following meanings:
(A) "Publicly subsidized" means either that the housing
development receives financial assistance from the United States
Department of Housing and Urban Development pursuant to an annual
contribution contract or is financed with low-income housing tax
credits, tax-exempt mortgage revenue bonds, general obligation bonds,
or local, state, or federal loans or grants and the rents of the
occupants, who are lower income households, do not exceed those
prescribed by deed restrictions or regulatory agreements pursuant to
the terms of the financing or financial assistance.
(B) "Publicly supported community" means a publicly subsidized
multifamily housing development that is wholly owned by either of the
following:
(i) A public housing agency that has been chartered by the state,
or by any city or county in the state, and has been determined to be
an eligible public housing agency by the United States Department of
Housing and Urban Development.
(ii) An incorporated nonprofit organization as described in
Section 501(c)(3) of the Internal Revenue Code (26 U.S.C. Sec. 501(c)
(3)) that is exempt from taxation under Section 501(a) of that code
(16 U.S.C. Sec. 501(a)), and that has received public funding to
subsidize the construction or maintenance of housing occupied by
residents whose annual income qualifies as "low" or "very low" income
according to federal poverty guidelines.
(2) Notwithstanding subdivision (b) of Section 270, moneys in the
Broadband Public Housing Account shall be available for the
commission to award grants and loans pursuant to this subdivision to
an eligible publicly supported community if that entity otherwise
meets eligibility requirements and complies with program requirements
established by the commission.
(3) Not more than twenty million dollars ($20,000,000) shall be
available for grants and loans to a publicly supported community to
finance a project to connect a broadband network to that publicly
supported community. A publicly supported community may be an
eligible applicant only if the publicly supported community can
verify to the commission that the publicly supported community has
not denied a right of access to any broadband provider that is
willing to connect a broadband network to the facility for which the
grant or loan is sought.
(4) (A) Not more than five million dollars ($5,000,000) shall be
available for grants and loans to a publicly supported community to
support programs designed to increase adoption rates for broadband
services for residents of that publicly supported community. A
publicly supported community may be eligible for funding for a
broadband adoption program only if the residential units in the
facility to be served have access to broadband services or will have
access to broadband services at the time the funding for adoption is
implemented.
(B) A publicly supported community may contract with other
nonprofit or public agencies to assist in implementation of a
broadband adoption program.
(5) To the extent feasible, the commission shall approve projects
for funding from the Broadband Public Housing Account in a manner
that reflects the statewide distribution of publicly supported
communities.
(6) In reviewing a project application under this subdivision, the
commission shall consider the availability of other funding sources
for that project, any financial contribution from the broadband
service provider to the project, the availability of any other public
or private broadband adoption or deployment program, including tax
credits and other incentives, and whether the applicant has sought
funding from, or participated in, any reasonably available program.
The commission 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.
(7) (A) To provide funding for the purposes of this subdivision,
the commission shall transfer to the Broadband Public Housing Account
twenty million dollars ($20,000,000) from the Broadband
Infrastructure Grant Account and five million dollars ($5,000,000)
from the Broadband Revolving Loan Account. Any moneys in the
Broadband Public Housing Account that have not been awarded pursuant
to this subdivision by December 31, 2016, shall be transferred back
to the Broadband Infrastructure Grant Account and Broadband
Infrastructure Revolving Loan Account in proportion to the amount
transferred from the respective accounts.
(B) The commission shall transfer funds pursuant to subparagraph
(A) only if the commission is otherwise authorized to collect funds
for purposes of this section in excess of the total amount authorized
pursuant to paragraph (3) of subdivision (d).
(i) (1) The commission shall conduct two interim financial audits
and a final financial audit and two interim performance audits and a
final performance audit of the implementation and effectiveness of
the California Advanced Services Fund to ensure that funds have been
expended in accordance with the approved terms of the grant awards
and loan agreements and this section. The commission shall report its
interim findings to the Legislature by April 1, 2011, and April 1,
2017. The commission shall report its final findings to the
Legislature by April 1, 2021. The reports shall also include an
update to the maps in the final report of the California Broadband
Task Force and data on the types and numbers of jobs created as a
result of the program administered by the commission pursuant to this
section.
(2) (A) The requirement for submitting a report imposed under
paragraph (1) is inoperative on January 1, 2022, pursuant to Section
10231.5 of the Government Code.
(B) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.
(j) (1) Beginning on January 1, 2012, and annually thereafter, the
commission shall provide a report to the Legislature that includes
all of the following information:
(A) The amount of funds expended from the California Advanced
Services Fund in the prior year.
(B) The recipients of funds expended from the California Advanced
Services Fund in the prior year.
(C) The geographic regions of the state affected by funds expended
from the California Advanced Services Fund in the prior year.
(D) The expected benefits to be derived from the funds expended
from the California Advanced Services Fund in the prior year.
(E) Actual broadband adoption levels from the funds expended from
the California Advanced Services Fund in the prior year.
(F) The amount of funds expended from the California Advanced
Services Fund used to match federal funds.
(G) An update on the expenditures from California Advanced
Services Fund and broadband adoption levels, and an accounting of
remaining unserved and underserved households and areas of the state.
(H) The status of the California Advanced Services Fund balance
and the projected amount to be collected in each year through 2020 to
fund approved projects.
(2) (A) The requirement for submitting a report imposed under
paragraph (1) is inoperative on January 1, 2021, pursuant to Section
10231.5 of the Government Code.
(B) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.