BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
                              Senator Ben Hueso, Chair
                                2015 - 2016  Regular 

          Bill No:          SB 745            Hearing Date:    1/13/2016
           ----------------------------------------------------------------- 
          |Author:    |Hueso                                                |
          |-----------+-----------------------------------------------------|
          |Version:   |1/4/2016    Amended                                  |
           ----------------------------------------------------------------- 
           ------------------------------------------------------------------ 
          |Urgency:   |No                     |Fiscal:      |Yes             |
           ------------------------------------------------------------------ 
           ----------------------------------------------------------------- 
          |Consultant:|Nidia Bautista                                       |
          |           |                                                     |
           ----------------------------------------------------------------- 
          
          SUBJECT: Telecommunications: universal service: California  
          Advanced Services Fund

            DIGEST:  This bill requires the California Public Utilities  
          Commission (CPUC) to provide additional information in its  
          annual report to the Legislature of the California Advanced  
          Services Fund (CASF), including county-level data and efforts to  
          leverage other resources.  This bill also provides for the  
          explicit inclusion of workforce organization representatives in  
          regional consortia.

          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 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.  (Public Utilities Code  
            281)








          SB 745 (Hueso)                                      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  
            Account, the Broadband Infrastructure Revolving Loan Account,  
            and the Broadband Public Housing Account.  (Public Utilities  
            Code 281)

          5)Requires that monies collected in the Rural and Urban Regional  
            Broadband Consortia Grant Account are available to eligible  
            consortia to fund the costs of broadband deployment activities  
            other than capital costs of the facilities and identifies  
            eligible members and representatives who can participate in  
            the consortium.  (Public Utilities Code 281)

          6)Requires the CPUC to submit a report to the Legislature by  
            January 1 of each year with specified information about CASF  
            activities and efforts.  (Public Utilities Code 914.7)

          This bill:

          1)Requires the CPUC to include additional information in its  
            annual report to the Legislature on the status of the CASF,  
            specifically detailed information by county and efforts to  
            leverage funds from non-CASF funding. 

          2)Explicitly includes representatives from workforce  
            organizations and air quality agencies as eligible members of  
            eligible broadband regional consortium.

          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.  

          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 1) provide broadband services  
          to "unserved" areas that are currently without broadband access  








          SB 745 (Hueso)                                      Page 3 of ?
          
          
          and 2) 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 six  
          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. 

          California statute requires the CPUC to provide an annual report  
          to the legislature on the status of CASF activities and efforts.  
          The statute requires the report to include information about the  
          amount of funds expended in the previous year, to list the  
          recipients of the funds, the geographic regions of the state  
          affected/benefited by the funds, actual broadband adoption  
          levels and other information. 

          This bill requires the CPUC to include more detailed information  
          to understand broadband deployment by county.  While some  
          county-level information is included in the report, including  
          some information about projects funded, the information included  
          is not uniformly displayed at the county level.  The most recent  
          annual report by the CPUC, published in April 2015, noted the  
          importance of leveraging non-CASF resources. According to the  
          report: "regional consortia leaders have identified a strong  
          need for CASF project development and grant preparation  
          assistance, including technical consultation and partnership  
          facilitation between regional stakeholders."  This bill requires  
          the CPUC to include in the annual report to the legislature  
          specific efforts of the CASF Program to leverage non-CASF  
          resources as it embarks on exploring expanded roles and analysis  
          to leverage resources and support projects where broadband gaps  
          exist.  While these efforts have only recently begun, it will be  
          important for the legislature to understand what is being  
          explored and any resulting challenges and opportunities.  








          SB 745 (Hueso)                                      Page 4 of ?
          
          

          Prior/Related Legislation
          
          SB 1193 (Padilla, Chapter 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  
          Account).
          FISCAL EFFECT:                 Appropriation:  No    Fiscal  
          Com.:             Yes          Local:          No


            SUPPORT:  

          None received

          OPPOSITION:

          None received

          ARGUMENTS IN SUPPORT:  Addressing the digital divide is  
          imperative to ensuring all Californians have full and equal  
          access to the economic, educational, social, and health  
          opportunities available on the internet, now a primary mechanism  
          for many of society's activities.  Improved broadband access and  
          availability is an important strategy in the state's efforts  
          bridge the divide, and the CASF program is key component of the  
          strategy.  Improving the information available to policymakers  
          about the efforts and activities of the CASF program will help  
          to further our efforts to improve access for more Californians.  
          More detailed information at the county-level and information  
          about efforts to leverage non-CASF resources will be beneficial  
          to inform policymakers as to the existing challenges and  
          opportunities.   

          









          SB 745 (Hueso)                                      Page 5 of ?
          
          
                                      -- END --