BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1262 (Wood) - Telecommunications: universal service:  
          California Advanced Services Fund.
          
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          |Version: February 27, 2015      |Policy Vote: E., U., & C. 10 -  |
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          |Urgency: Yes                    |Mandate: No                     |
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          |Hearing Date: June 29, 2015     |Consultant: Marie Liu           |
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          This bill does not meet the criteria for referral to the  
          Suspense File.


          Bill  
          Summary:  AB 1262 would transfer $5 million within the  
          California Advanced Services Fund from the Broadband  
          Infrastructure Revolving Loan Account to the Rural and Urban  
          Regional Broadband Consortia Grant Account.


          Fiscal  
          Impact:  Annual costs of approximately $130,000 beginning in  
          January 2018 for two or three years to the California Advanced  
          Services Fund (CASF, special fund) to the California Public  
          Utilities Commission (CPUC) for additional grant administration.


          Background:  Existing law establishes the California Advanced Services Fund  
          (CASF), administered by the CPUC, to help fund deployment of  
          broadband infrastructure and bring high-speed Internet access to  







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          all areas of the state. The CASF is funded from a customer  
          surcharge on intrastate communication services. Section 821 of  
          the Public Utilities Code authorizes the collection of $215  
          million in surcharges from 2011 through 2020, with no more than  
          $25 million to be collected in any one year. This amount is  
          divided amongst the following four programs:
            Broadband Infrastructure Grant Account ($170 million):  This  
            program provides grants to cover the capital costs of  
            expanding broadband infrastructure.


            Rural and Urban Regional Broadband Consortia Grant Account  
            ($10 million):  This program 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.


            Broadband Infrastructure Revolving Loan Account ($10 million):   
            This program provides supplemental financing for projects that  
            are also applying for infrastructure grant funding. The loan  
            can cover up to 20% of the project cost up to $500,000. 


            Broadband Public Housing Account ($25 million):  This program  
            supports the deployment of broadband infrastructure and  
            adoption programs in eligible publically supported housing  
            communities. Funds for this program were received from the  
            Infrastructure Grant Account and the Revolving Loan Account.  
            Any remaining funds in this program as of December 31, 2016  
            will be transferred back in proportion to the two accounts.











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          Proposed Law:  
            This bill would transfer $5 million from the Broadband  
          Infrastructure Revolving Loan Account to the Rural and Urban  
          Regional Broadband Consortia Grant Account. 


          Staff  
          Comments:  The CPUC currently has 1.3 PYs staffing the consortia  
          program (1 Public Utilities Regulatory Analyst IV position and  
          1/3 Staff Service Analyst position) at an annual cost of  
          approximately $130,000 to the CASF. However, these positions  
          were only approved through the end of 2017 as all the money in  
          the account will be granted out by the end of 2016. The  
          additional money provided for the consortia program under this  
          bill would necessitate these positions to be extended, likely  
          for two to three years to make and oversee additional grants. 
          By decreasing the funding available for the revolving loan  
          program, this bill potentially creates cost pressures for that  
          account. However, any cost pressures are unlikely. As discussed  
          in the CPUC's zero-based budget, the Broadband Infrastructure  
          Revolving Loan Account has been undersubscribed. The lack of  
          interest in this program was not explored. Nevertheless, given  
          the lack of demand for this program, this bill is unlikely to  
          cause any cost pressures on the Revolving Loan Account unless  
          the program is modified.


          This bill would not change the total authorization for the CASF  
          and therefore there will be no impact to the ratepayers.




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