BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 745|
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UNFINISHED BUSINESS
Bill No: SB 745
Author: Hueso (D)
Amended: 8/19/16
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 9-0, 1/13/16
AYES: Hueso, Cannella, Hertzberg, Hill, Lara, McGuire,
Morrell, Pavley, Wolk
NO VOTE RECORDED: Fuller, Leyva
SENATE APPROPRIATIONS COMMITTEE: 7-0, 1/19/16
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SENATE FLOOR: 36-1, 1/25/16
AYES: Allen, Beall, Berryhill, Block, Cannella, De León,
Fuller, Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg,
Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire,
Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen,
Nielsen, Pan, Pavley, Roth, Runner, Vidak, Wieckowski, Wolk
NOES: Anderson
NO VOTE RECORDED: Bates, Gaines, Stone
ASSEMBLY FLOOR: 54-26, 8/23/16 - See last page for vote
SUBJECT: Telecommunications: universal service: California
Advanced Services Fund
SOURCE: Author
DIGEST: This bill makes changes to the California Advanced
Services Fund (CASF) program for broadband service.
Specifically, this bill extends the date remaining funds from
the Public Housing Account are transferred back to other
Accounts from December 31, 2016, to December 31, 2020, and
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Page 2
limits eligibility to unserved public housing developments.
This bill makes additional changes, including information
required in the California Public Utilities Commission (CPUC)
annual report to the Legislature, and others.
Assembly Amendments extend the date by four years (from 2016 to
2020) by when remaining funds must be transferred from the CASF
Public Housing Account to the CASF Infrastructure Grant Fund
Account and limits the eligible entities to unserved public
housing developments, as defined.
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 percent of Californians. (Public Utilities
Code §281)
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
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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 transfer to the Public Housing Account
$20 million from the Infrastructure Account and $5 million
from the Revolving Loan Account. Any moneys in the Public
Housing Account that have not been awarded by December 31,
2016, shall be transferred back to the Infrastructure Account
and the Revolving Loan Account in proportion to the amount
transferred from the respective accounts. (Public Utilities
Code §281)
7)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)Extends the date remaining funds from the CASF Public Housing
Account are transferred back to other CASF Accounts from
December 31, 2016, to December 31, 2020.
2)Requires the CPUC, in its review of applications for funds
from the CASF Public Housing Account, to award grants only to
unserved housing developments.
3)Extends the due date on the CPUC annual report to the
Legislature from January 1 of each year to April 1 of each
year, and requires the CPUC to provide additional information
including county information and specified details on the
status of each CASF funded project.
4)Authorizes representatives of workforce organizations and air
pollution control or air quality management districts to be
included as an eligible participant within a regional
consortium in the CASF Rural and Urban Regional Broadband
Consortia Grant Account (Consortia Account).
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5)Requires the CPUC, in its review of applications for funds
from the CASF Broadband Public Housing Account (Public Housing
Account), to provide awards to unserved housing developments,
defined as when at least one housing unit within the
development is not offered broadband internet service.
Background
Addressing the digital divide. 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 areas that are unserved and underserved
by broadband service 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 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. In 2013, AB 1299 (Bradford, Chapter 507,
Statutes of 2013) required the CPUC to fund grants for the
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deployment and adoption of broadband services in publicly
supported communities using the Broadband Public Housing Account
(Housing Account) established within the California Advanced
Services Fund (CASF), utilizing $25 million mostly from the CASF
Infrastructure Grant Account.
SB 745. This bill requires remaining funds as of December 31,
2020 - instead of December 31, 2016 - in the CASF Public Housing
Account to be transferred back to CASF Infrastructure Account.
As such, the CPUC would be able to continue to award grants and
financing to projects for public housing entities that are
currently unserved with broadband for an additional four years.
The CPUC has awarded approximately 100 projects from the Public
Housing Account. However, they are currently reviewing nearly
300 project proposals. By extending the date by four years,
these projects and others can be assessed and awarded with the
funding, should their applications meet the program's criteria.
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/benefitted 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 CPUC report, including some information about
projects funded, the information is not uniformly displayed at
the county level. The most recent annual report by the CPUC
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.
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Related/Prior Legislation
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).
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.
AB 1299 (Bradford, Chapter 507, Statutes of 2013) required the
CPUC to fund grants for the deployment and adoption of broadband
services in publicly supported communities using the Broadband
Public Housing Account (Housing Account) established within
CASF, as specified.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, increased
costs of approximately $260,000 (CASF) to present county-by
county-data on project progress and provide detailed information
of efforts to leverage non-CASF funds in annual reports. Staff
would also be required to process the additional applications
and conduct administrative tasks related to grant oversight and
reimbursement for applications from workforce organizations and
air quality districts.
SUPPORT: (Verified8/23/16)
California Cable and Telecommunication Association
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OPPOSITION: (Verified8/23/16)
None received
ARGUMENTS IN SUPPORT: According to the author, 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 to bridge the divide, and the CASF program
is a key component of the strategy. Extending the date by when
funds from the Public Housing Account are reverted to the other
accounts provides residents of eligible public housing
developments the opportunity to benefit from the state's efforts
to address the digital divide. Additionally, more detailed
information at the county-level and information about efforts to
leverage non-CASF resources will be beneficial to inform our
efforts to better address the existing challenges and
opportunities to help California residents connect to broadband
services.
ASSEMBLY FLOOR: 54-26, 8/23/16
AYES: Achadjian, Alejo, Arambula, Atkins, Bloom, Bonilla,
Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu,
Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier,
Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez,
Gonzalez, Gordon, Gray, Hadley, Roger Hernández, Holden,
Irwin, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina,
Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams,
Wood, Rendon
NOES: Travis Allen, Baker, Bigelow, Brough, Chang, Chávez,
Dahle, Beth Gaines, Gallagher, Grove, Harper, Jones, Kim,
Lackey, Linder, Maienschein, Mathis, Mayes, Melendez,
Obernolte, Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk
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Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
8/23/16 19:58:23
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