BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: AB 1262 Hearing Date: 6/16/2015
-----------------------------------------------------------------
|Author: |Wood |
|-----------+-----------------------------------------------------|
|Version: |2/27/2015 As Introduced |
-----------------------------------------------------------------
------------------------------------------------------------------
|Urgency: |Yes |Fiscal: |Yes |
------------------------------------------------------------------
-----------------------------------------------------------------
|Consultant:|Nidia Bautista |
| | |
-----------------------------------------------------------------
SUBJECT: Telecommunications: universal service: California
Advanced Services Fund
DIGEST: This bill would reallocate funding among two accounts
within the California Advanced Services Fund (CASF) for purposes
of encouraging broadband deployment in the state. Specifically,
the bill would result in a reduction of $5 million from the
Broadband Infrastructure Revolving Loan Account and a
corresponding increase to the Rural and Urban Regional Broadband
Consortia Grant Account.
ANALYSIS:
Existing law:
1)Establishes the CASF as one of several California universal
service program funds established in the State Treasury.
(Public Utilities Code §270)
2)Requires the California Public Utilities Commission (CPUC) to
develop, implement, and administer the CASF program 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. (Public
Utilities Code §281)
3)Establishes the goal of the CASF program to approve funding
for infrastructure projects that will provide broadband access
to no less than 98% of Californians by December 31, 2015.
(Public Utilities Code §281)
AB 1262 (Wood) Page 2 of ?
4)Requires the CPUC to establish four accounts within CASF
program, including the Broadband Infrastructure Grant Account,
The Rural and Urban Regional Broadband Consortia Grant, The
Broadband Infrastructure Revolving Loan Account, and The
Broadband Public Housing Account. (Public Utilities Code §281)
5)Requires that of the monies collected for CASF on and after
January 1, 2011, $190,000,000 is deposited into the Broadband
Infrastructure Grant Account, $10,000,000 is deposited in the
Rural and Urban Regional Broadband Consortia Grant Account,
and $15,000,000 is deposited into the Broadband Infrastructure
Revolving Loan Account. (Public Utilities Code §281)
6)Requires that of the monies deposited into the CASF program
$20 million shall be transferred from the Broadband
Infrastructure Account and another $5 million shall be
transferred from the Broadband Revolving Loan Account for a
total of $25 million to the Broadband Public Housing Account.
Requires any funds not awarded as of December 31, 2016 shall
be transferred back in proportion to the amount transferred.
(Public Utilities Code §281)
This bill:
1)Requires moneys collected for CASF on and after January 1,
2011, $15,000,000 is to be deposited into the Rural and Urban
Regional Broadband Consortia Grant Account and used for
specified purposes, and $10,000,000 is to be deposited into
the Broadband Infrastructure Revolving Loan Account and used
for specified purposes.
2)Declares to take effect immediately as an urgency statute.
Background
In 2007, the CPUC established the CASF which was subsequently
codified in law by SB 1193 (Padilla, Chapter 393, Statutes of
2008) as a new universal service program to encourage deployment
of broadband services to all Californians that will promote
economic growth, job creation, and substantial social benefits
of advanced information and communications technologies. The
CASF provides grants to bridge the "digital divide" in unserved
and underserved areas in the state.
AB 1262 (Wood) Page 3 of ?
CASF is funded by a surcharge rate on revenues collected by
telecommunications carriers from end-users of intrastate
services. With initial authorized funding of $100 million, the
CASF supports projects that will a) provide broadband services
to "unserved" areas that are currently without broadband access
and b) build out facilities in "underserved" areas. An
"unserved" area is an area that is not served by any form of
wireline or wireless facilities-based broadband, such that
internet connectivity is available only through dial up service.
An "underserved" area is an area where broadband is available,
but no wireline or wireless facilities-based provider offers
service at advertised data transfer speeds of at least 6
megabits per second download and 1.5 megabits per second upload.
Statute requires the CPUC to prioritize CASF investments to
unserved areas, followed by underserved areas.
SB 1040 (Padilla, Chapter 317, Statutes of 2010) extended CASF
indefinitely, established subaccounts within CASF, and increased
CASF funding to $225 million. SB 740 (Padilla, Chapter 522,
Statutes of 2013) authorized an additional $90 million funding
for a CASF grant subaccount. Currently, the CASF program has a
total authorized funding of $315 million to be collected in
surcharges through the year 2020.
The current authorized funding limits for each CASF subaccount
is as follows:
Broadband Infrastructure Grant Account $270
million
Broadband Infrastructure Revolving Loan Account $10 million
Rural and Urban Regional Broadband Consortia Grant Account$10
million
Broadband Public Housing Account $25
million
The Broadband Infrastructure Grant Account provides grants to
cover the capital costs of expanding broadband infrastructure.
The CASF grant awards 70% of project costs for unserved areas
and 60% for underserved areas. Eligible entities include both
telephone corporations and non-telephone corporations with
certain conditions, such as conditioning funding for local
governments to projects that only serve unserved households or
businesses.
AB 1262 (Wood) Page 4 of ?
The Broadband Infrastructure Revolving Loan Account is intended
to provide supplemental financing for projects also applying for
CASF grant funding. The loan program would cover 20% of projects
costs, with a maximum of $500,000.
The Rural and Urban Regional Broadband Consortia Grant Account
provides grants to eligible voluntary regional consortia to fund
the cost of broadband deployment activities other than capital
costs of facilities. Eligible consortia include diverse
stakeholders from their respective communities, and work to
inform the public about broadband, gather data about Internet
availability and speeds for CPUC broadband maps, mobilize local
governments and employers to aggregate demand to assist the
private sector, ensure local broadband providers know about
CASF. There are currently over a dozen regional consortia
representing every area of the state. While the members of each
regional consortia vary, many consortia include representatives
from local businesses, community colleges, school districts,
community-based organizations and local governments.
The Broadband Public Housing Account supports deployment of
broadband infrastructure and adoption programs in eligible
publicly supported housing communities. The program was
established by AB 1299 (Bradford, Chapter 507, Statutes of 2013)
and transfers a total of $25 million from CASF accounts,
specifically $20 million from the grant account and $5 million
from the loan account. Per the statute, any remaining funds as
of December 31, 2016 will be transferred back in proportion to
the two accounts. On December 18, 2014, the CPUC approved the
rules implementing the new Broadband Public Housing Account (D.
14-12-039).
Consortia Grant Account vs. Revolving Loan Account. The funds
within the Regional Consortia Account have been well-subscribed.
The CPUC has awarded a total of $9.26 million in grant funding
for 16 consortia groups, leaving only $250,000 remaining in the
account. Furthermore, most regional consortia (13 of 16) will
have exhausted their funding this year, with the remaining
scheduled to exhaust their funding next year. On the other hand,
according to the CPUC, "the CASF Revolving Loan program is
either undersubscribed or of little necessity, given the number
of grant applications vs. loan applications received on the
February 1, 2013 deadline." The CPUC has approved only three
loans to date totaling $126,654 to two applicants, for three
AB 1262 (Wood) Page 5 of ?
separate infrastructure projects. The CPUC in its budget
documents had already flagged the need to evaluate whether the
loan program is worth continuing to pursue.
Prior/Related Legislation
SB 1193 (Padilla, Chapters 393, Statutes of 2008) codified CASF
as a new universal service program in the Public Utilities Code
to encourage the deployment of broadband.
SB 1040 (Padilla, Chapter 317, Statutes of 2010) extended CASF
indefinitely and expanded it to include three accounts: 1)
Broadband Infrastructure Grant Account, 2) Broadband
Infrastructure Revolving Loan Account, and 3) Rural and Urban
Regional Broadband Consortia Grant Account. The bill also
increased CASF funding to $225 million ($100 million additional
for the Infrastructure Grant Account, $15 million to the
Revolving Loan Account, and $10 million to the Consortia Grant
Accounts).
SB 740 (Padilla, Chapter 522, Statutes of 2013) Expanded
eligibility in the CASF, established a program goal, and
increased the program funding.
AB 1299 (Bradford, Chapter 507, Statutes of 2013) Required the
CPUC to transfer a total of $25 million from the Broadband
Infrastructure Grant Account and the Broadband Revolving Loan
Account in order to fund the Broadband Public Housing Account.
Required that any funds not awarded by December 31, 2016 are
transferred back.
AB 238 (Stone, 2015) would define "broadband" services based on
specified speeds for purposes of CASF. The bill is in Assembly
Utilities & Commerce Committee.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
ASSEMBLY VOTES:
Assembly Floor (77-0)
Assembly Appropriations Committee (17-0)
Assembly Utilities and Commerce Committee(14-0)
AB 1262 (Wood) Page 6 of ?
SUPPORT:
California Center for Rural Policy (Source)
211 San Bernardino County
Access Humboldt
Anza Electric Cooperative, Inc.
Broadband Consortium of the Pacific Coast
California Emerging Technology Fund
California Primary Care Association
California Public Utilities Commission
California State Association of Counties
California State University San Bernardino
Central Coast Broadband Consortium
Central Sierra Connect Broadband Consortia
City of Bishop
City of California City
City of Ridgecrest
City of Riverside
City of Tehachapi
Connected Capital Area Broadband Consortium
Contra Costa Economic Partnership
Corporation for Education Network Initiatives in California
County of Alpine
County of Amador
County of Del Norte
County of El Dorado
County of Humboldt
County of Kern
County of Mariposa
County of Modoc
County of Mono
County of Nevada
County of Riverside
County of Sacramento
County of San Bernardino
County of San Diego
County of Shasta
County of Sierra
County of Sutter
County of Tehama
County of Trinity
County of Tuolumne
County of Ventura
County of Yolo
East Bay Broadband Consortium
AB 1262 (Wood) Page 7 of ?
Eastern Sierra Connect Regional Broadband Consortium
Economic Vitality Corporation
Edgewood Companies
Feldman McLaughlin Thiel LLP
Gold Country Broadband Consortium
High Desert Community Foundation
Inland Empire Economic Partnership
Inland Empire Regional Broadband Consortium
Inyo Networks, Inc.
Kern Community College District
Lake Tahoe South Shore Chamber of Commerce
Los Angeles County Regional Broadband Consortia
North Bay/North Coast Broadband Consortium
North Lake Tahoe Chamber/CVB/Resort Association
Northeastern California Connect Consortium
Plumas-Sierra Rural Electric Cooperative
Plumas-Sierra Telecommunications
Praxis Associates, Inc.
Redwood Coast Connect
Rural County Representatives of California
San Bernardino Community College District
San Diego Imperial Regional Broadband Consortium
San Joaquin Valley Regional Broadband Consortium
Sierra Economic Development Corporation
Sierra Ecosystems Associates
SmartRiverside
Tahoe Prosperity Center
The Utility Reform Network
Town of Mammoth Lakes
Tuolumne County Economic Development Authority
Upstate California Connect Consortium
Volcano Communications Group
West Kern Community College District
Yuba Community College District
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: The author's office expresses concern
that the CASF Rural and Urban Regional Broadband Consortia Grant
Account is about to be exhausted and that if further funds are
not available, many rural consortia will no longer be able to
provide the appropriate broadband educational service nor assist
in preparing applications for grants.
AB 1262 (Wood) Page 8 of ?
The members of the Broadband Regional Consortia state: "AB 1262
would allow consortia to continue working with telecommunication
providers and key community stakeholders to promote CASF for
years to come. We believe AB 1262 is essential to achieving the
state's broadband goal of reaching 98% broadband deployment and
80% adoption for California by 2015, goals acknowledged by the
California Broadband Council; CPUC; and California Emerging
Technology Fund."
-- END --