BILL NUMBER: AB 1758 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 17, 2016
INTRODUCED BY Assembly Member Mark Stone
( Coauthors: Assembly Members
Eduardo Garcia and Levine )
( Coauthor: Senator McGuire
)
FEBRUARY 2, 2016
An act to amend Section 281 of, and to add Section 281.1 to, the
Public Utilities Code, relating to telecommunications.
LEGISLATIVE COUNSEL'S DIGEST
AB 1758, 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 the 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. Existing law establishes that the goal of the
program is, no later than December 31, 2015, to approve funding for
infrastructure projects that will provide broadband access to no less
than 98% of California households. Existing law authorizes the
commission to collect a surcharge for deposit into the CASF not to
exceed $315,000,000 in total and authorizes the surcharge until 2020.
This bill would extend to December 31, 2023, the time period for
meeting the program goal and would specify the threshold speeds to be
met in achieving the goal. The bill would also specify as a program
goal the achievement of a statewide 90% adoption rate of high-speed
Internet access by December 31, 2023. The bill would require the
commission to give priority to projects that provide advanced
communication services at those threshold speeds to unserved and
underserved households until the goal is achieved. The bill would
authorize the commission, once that goal is achieved, to prioritize
funding for other specified projects. The bill would require the
commission and the California Broadband Council, in consultation with
relevant state agencies, to develop a plan to implement these
provisions in a manner that fosters public-private collaboration. The
bill would authorize the commission to allocate up to $10 million
from the Broadband Infrastructure Grant Account in the CASF to a
specified nonprofit organization for specified purposes. The bill
would make various legislative findings, including findings regarding
deployment of broadband speeds of at least 25 megabits per second
(Mbps) downstream and 3 Mbps upstream. The bill would establish the
High-Speed Internet Access Adoption Account within the CASF and would
authorize the commission to award grants to eligible community-based
organizations for education and outreach to low-income households to
facilitate the adoption of high-speed Internet access by these
households. The bill would authorize the commission to collect an
additional $350,000,000, would specify the distribution of the
additional moneys among the accounts in the CASF, and would authorize
the collection through 2026. By increasing the collection for
deposit in the CASF, the bill would constitute a change in state
statute that would result in a taxpayer paying a higher tax within
the meaning of Section 3 of Article XIII A of the California
Constitution, and thus would require for passage the approval of 2/3
of the membership of each house of the Legislature.
Existing law requires a certain amount of moneys from the
Broadband Infrastructure Grant Account and the Broadband Revolving
Loan Account to be transferred to the Broadband Public Housing
Account and requires the commission to award grants and loans from
the Broadband Public Housing Account to eligible publicly supported
communities. Existing law requires any moneys in the Broadband Public
Housing Account not awarded by December 31, 2016, to be transferred
back to the other 2 accounts.
This bill would repeal the requirement to transfer back the moneys
in the Broadband Public Housing Account that are not awarded.
Because the provisions of this bill are within the Public
Utilities Act, a violation of which is a crime, this bill would
impose a state-mandated local program by extending a crime.
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.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known, and may be cited, as the
Internet For All Now Act of 2016.
SEC. 2. (a) The Legislature finds and declares all of the
following:
(1) The availability of high-speed Internet access, referred to
generically as "broadband" and including both wired and wireless
technologies, is essential 21st century infrastructure for economic
competitiveness and quality of life. Economic studies confirm that
the use of broadband technologies increases economic productivity as
a foundation for increased efficiency in organizational operations
and enhanced profitability in business.
(2) Broadband infrastructure is also vital to the operation and
management of other critical infrastructure, such as energy
generation systems and the power grid, water supply systems, and
public safety and emergency response networks. There is a need for
world-class broadband infrastructure throughout California to support
these major infrastructure investments to protect lives, property,
and the environment.
(3) The California Advanced Services Fund (CASF) is a vital
resource for California to be a national leader and globally
competitive in broadband infrastructure.
(b) It is the intent of the Legislature that the Public Utilities
Commission, after ensuring the development of last-mile
infrastructure to provide at least 6 megabits per second (Mbps)
downstream and 1.5 Mbps upstream service for 98 percent of unserved
or underserved households in each region of the state, do all of the
following:
(1) Establish the goal for threshold broadband speeds in future
plans and programs of not less than 25 Mbps downstream and 3 Mbps
upstream. In establishing the threshold broadband speeds, the
commission should ensure California remains a national leader and
globally competitive on broadband infrastructure while taking into
account all cost-effective strategies.
(2) Analyze and publish public data regarding the availability of
broadband service at speeds specified in paragraph (1) throughout the
state.
(3) Prepare and submit to the Legislature a plan for achieving
broadband service at speeds specified in paragraph (1) that includes
the following:
(A) An analysis of the availability of those threshold speeds for
all consumers.
(B) An assessment of the implications of the implementation of
paragraph (1) for the CASF and the required funding needed to achieve
that goal in unserved and underserved areas.
(C) A delineation of the strategies and policies that would
achieve that goal in the most cost-effective manner possible,
including whether or not it should be the policy of the state to
encourage fiber deployment for middle-mile projects.
SEC. 3. Section 281 of the Public Utilities Code is amended to
read:
281. (a) (1) 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 and Section
281.1.
(2) Recognizing that, in addition to residential households, there
are other types of consumers, including anchor institutions, such as
schools, libraries, community centers, and health and medical
facilities, small businesses and large employers, and research
organizations, all with a range of needs for broadband access
threshold speeds in excess of those specified in Section 281.1, the
commission, in administering the program, shall consider approving
funding for last-mile infrastructure projects to reach
unserved and underserved households that exceed those threshold
speeds, that also provide improvements to those other types of
consumers, and that the commission deems deemed by the
commission to be in the public interest and a cost-effective
use of the moneys in the California Advanced Services Fund.
Fund that will reach unserved and
underserved households and that will do both of the following:
(A) Provide broadband access at speeds that exceed those
thresholds.
(B) Provide improvements to those other types of consumers.
(b) (1) The goals of the program are both of the following:
(A) No later than December 31, 2023, to approve funding for
infrastructure projects that will provide broadband access at
advertised speeds of 6 megabits per second (Mbps) downstream and 1.5
Mbps upstream to no less than 98 percent of California households.
(B) No later than December 31, 2023, to approve funding for
education and outreach projects that would facilitate the achievement
of a statewide 90 percent household adoption rate of high-speed
Internet access with no significant population segment with less than
80 percent adoption. For purposes of this subparagraph, high-speed
Internet access means access to the Internet at speeds faster than
dialup.
(2) In approving infrastructure projects, the commission shall
give priority to projects pursuant to Section 281.1. 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.
(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.
(5) The High-Speed Internet Access Adoption Account.
(d) (1) All moneys collected by the surcharge authorized by the
commission pursuant to 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) Three hundred fifty million dollars ($350,000,000) into the
Broadband Infrastructure Grant Account.
(B) Thirty million dollars ($30,000,000) into the Rural and Urban
Regional Broadband Consortia Grant Account.
(C) Ten million dollars ($10,000,000) into the Broadband
Infrastructure Revolving Loan Account.
(D) In addition to the amount transferred pursuant to subparagraph
(A) of paragraph (7) of subdivision (h), seventy-five million
dollars ($75,000,000) into the Broadband Public Housing Account.
(E) One hundred million dollars ($100,000,000) into the High-Speed
Internet Access Adoption 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 five hundred sixty-five
million dollars ($565,000,000), for a sum total of moneys collected
by imposing the surcharge described in paragraph (1) not to exceed
six hundred sixty-five million dollars ($665,000,000). The commission
may collect the remaining balance of the additional sum beginning
with the calendar year starting on January 1, 2017, and continuing
through the 2026 calendar year, in an amount not to exceed fifty
million dollars ($50,000,000) 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) (A) 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 and Section 281.1, including the costs incurred by the
commission in developing, implementing, and administering the program
and the fund.
(B) To ensure the most cost effective and timely achievement of
the goals specified in paragraph (1) of subdivision (b), the
commission may award contracts through an open and competitive
process for any of the following services:
(i) Project oversight and management of grants awarded from the
Broadband Infrastructure Grant Account to accelerate the completion
of projects without cost increase or overruns.
(ii) Engineering review of proposals for grants from the Broadband
Infrastructure Grant Account.
(iii) Overall management, distribution of funds from the Broadband
Infrastructure Grant Account to sub-awardees, and verification of
performance by the sub-awardees receiving funds.
(C) To avoid delays in cash flow,
cashflow, contracts entered into pursuant to subparagraph (B)
shall include terms for reasonable and prudent advance payment
schedules reconciled to actual expenditures by contractors, as
verified by independent audits.
(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 and Section 281.1, if that entity otherwise satisfies
the eligibility requirements under that program. Nothing in this
section shall 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 and Section 281.1 to provide access to broadband to an
unserved or underserved household, as defined in commission Decision
12-02-015, 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 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.
(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.
(4) Notwithstanding subdivision (b) of Section 270, up to ten
million dollars ($10,000,000) from the Broadband Infrastructure Grant
Account shall be available for allocation to the California
Telehealth Network, a 501(c)(3) nonprofit organization, for purposes
of leveraging that organization's utilization of the Federal
Communications Commission's Healthcare Connect Fund for California's
medically underserved communities.
(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
high-speed Internet access 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) 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.
(i) (1) (A) Notwithstanding subdivision (b) of Section 270, moneys
in the High-Speed Internet Access Adoption Account shall be
available for the commission to award performance-based grants to
eligible not-for-profit, community-based organizations, schools, and
libraries to increase high-speed Internet adoption by low-income
households by providing public education and outreach programs that
are culturally appropriate and in relevant languages on digital
literacy training, assistance with selecting a high-speed Internet
provider, and subscription to high-speed Internet access.
(B) The commission shall develop criteria for awarding grants and
determine the process and methodology for verifying high-speed
Internet access based on new subscriptions by low-income households.
(C) The commission may award one or more contracts for the overall
management of grants to eligible not-for-profit community-based
organizations, schools, and libraries to increase high-speed Internet
adoption among low-income households at a cost not to exceed 10
percent of the amount of grants awarded.
(2) To avoid delays in cash flow, cashflow,
contracts entered into pursuant to paragraph (1) shall include
terms for reasonable and prudent advance payment schedules
reconciled to actual expenditures by contractors, as verified by
independent audits.
(j) (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, this section, and Section 281.1. The commission
shall report its interim findings to the Legislature by April 1,
2020, and April 1, 2022. The commission shall report its final
findings to the Legislature by April 1, 2024. 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 and Section 281.1.
(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.
(k) (1) Beginning on January 1, 2018, and annually thereafter,
until January 1, 2027, 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) The amount of actual high-speed Internet access adoption due
to 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 to fund
approved projects.
(2) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.
SEC. 4. Section 281.1 is added to the Public Utilities Code, to
read:
281.1. (a) For the purposes of this section, the following terms
mean the following:
(1) "Last-mile infrastructure" means the segment of the Internet
infrastructure that provides Internet connectivity to end users, such
as residential households, anchor institutions, and local
businesses.
(2) "Middle-mile backhaul infrastructure" means the segment of the
Internet infrastructure that connects the last-mile infrastructure
to the backbone infrastructure of the Internet.
(3) "Program" means the California Advanced Services Fund program.
(4) "Unserved households" and "underserved households" have the
same meanings as in commission Decision 12-02-015.
(b) (1) Until the goal specified in subparagraph (A) of paragraph
(1) of subdivision (b) of Section 281 is achieved, the commission, in
administering the program, shall give priority to last-mile
infrastructure projects that provide advanced communication services
at or above the advertised speeds required under the goal to unserved
or underserved households. Recognizing that cost-effective,
last-mile infrastructure projects are dependent upon affordable
middle-mile backhaul infrastructure that may be deployed through
underserved or unserved areas either by incumbents providing access
to existing middle-mile backhaul infrastructure at reasonable prices
as determined by the commission or by the project applicant
constructing essential middle-mile infrastructure as part of the
project, the commission shall consider applications for projects that
provide for the development of last-mile infrastructure serving
unserved and underserved households that include the development of
middle-mile backhaul infrastructure to which the last-mile
infrastructure connects.
(2) (A) The commission shall give additional priority to
applicants that are incumbents with existing middle-mile backhaul
infrastructure proposing to deploy last-mile infrastructure to
provide services to unserved and underserved households, if the
incumbent submits an application no later than March 31, 2017, and
the proposal is deemed cost effective by the commission
(B) The commission shall require the incumbent to complete, no
later than December 31, 2018, the construction of the project given
priority pursuant to this paragraph.
(3) In applying for funding for the program, an applicant shall
demonstrate the cost-effectiveness of the last-mile infrastructure at
the threshold speeds specified in subparagraph (A) of paragraph (1)
of subdivision (b) of Section 281.
(c) Once the goal specified in subparagraph (A) of paragraph (1)
of subdivision (b) of Section 281 is reached, the commission may
prioritize funding pursuant to the program for any of the following:
(1) Last-mile infrastructure projects providing advanced
communication services at advertised speeds of at least 25 Mbps
downstream and 3 Mbps upstream to unserved and underserved households
and at appropriate speeds to anchor institutions and other customers
in the vicinity of those households.
(2) Upgrades to broadband connectivity for other critical
infrastructure systems not in the vicinity of residences.
(3) Last-mile infrastructure projects of statewide public
significance, including projects related to public safety and
emergency response, such as providing broadband connectivity to and
among county fairgrounds as staging areas for emergency responses,
wildfire fighting, and disaster evacuations.
(d) It is the intent of the Legislature to enact legislation to
establish a transparent public process to analyze and designate a
project as having statewide significance for purposes of paragraph
(3) of subdivision (c).
(e) The commission and the California Broadband Council shall, in
consultation with relevant state agencies, develop a plan to
implement this section in a manner that fosters public-private
partnership collaboration in an open and transparent process.
SEC. 5. 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.