BILL ANALYSIS
AB 1012
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Date of Hearing: April 27, 2009
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Felipe Fuentes, Chair
AB 1012 (Perez) - As Introduced: February 27, 2009
SUBJECT : California Broadband Task Force.
SUMMARY : Requires to California Broadband Task Force (task
force) to meet to develop a strategy to expedite accessing funds
provided pursuant to the federal American Recovery and
Investment Act of 2009 (ARRA).
1)Executive Order S-23-06 created a 21-member Task Force
composed of public and private stakeholders with the expertise
to advise policymakers on a framework for making California a
global leader in the telecommunications revolution.
2)Creates the California Advanced Services Fund (CASF) in order
to spur deployment of broadband infrastructure in un-served
and underserved areas within the state, in both rural and
urban areas, and encourage statewide policy to promote
broadband throughout the state.
THIS BILL:
1)Recognizes the establishment of the task force and requires it
to meet no later than 30 days after the effective date of this
bill to develop a strategy to expedite accessing funds
provided under ARRA.
2)Requires the task force to submit the strategy to the relevant
policy and fiscal committees in each house of the Legislature
within 60 days of its first meeting.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author's office, this bill would
ensure that California is proactively engaged in new broadband
programs at the federal level, adequately prepared to provide
the corresponding federal agencies with feedback for improving
and expanding California's broadband infrastructure, and able to
identify funding sources and secure our state's fair share of
ARRA funding for the development and or expansion of a broadband
infrastructure that is affordable, reliable, and accessible to
AB 1012
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all Californians.
1) Background: ARRA, signed into law on February 17, 2009, was
intended to stimulate the U.S. economy in the wake of the
economic downturn. ARRA provides two sources of broadband
funding. The Broadband Technology Opportunities Program (BTOP)
is a $4.4 billion competitive grant program. The program
contains several set-asides including $250 million for
innovative programs that encourage the sustainable development
of broadband services, $200 million to upgrade technology and
capacity at public computing centers, and $350 million for to
support efforts to ensure access to affordable broadband and
ensure access to broadband use. BTOP is being administered by
the Commerce Department's National Telecommunications and
Information Administration (NTIA). Priority for these grants is
given to states that can provide matching funds and there must
be a single, centralized agency that applies for all grant
recipients under this program.
The second source of funding is the Distance Learning,
Telemedicine, and Broadband Program. This is a $2.5 billion
competitive grant program aimed at building broadband
infrastructure in rural areas that do not have sufficient access
to high-speed broadband service. Priority for these grants is to
be given to projects that will deliver end users a choice of
more than one service provider and provide service to the
highest proportion of rural residents that do not have access to
broadband.
2) The old Broadband Task Force: Executive Order S-23-06, known
as the California Broadband Initiative, created a 21-member
Broadband Task Force comprised of public and private
stakeholders with the expertise to "advise policymakers on a
framework for making California a global leader in the
telecommunications revolution." The task force was responsible
for delivering two reports. The first report describes
administrative actions that state government can immediately act
upon to increase broadband availability and adoption in
California. The second report contains a comprehensive
assessment of the state of broadband in California. It includes
detailed maps of wireline and wireless availability, analysis of
adoption, a pricing survey, and recommendations so that
California can take advantage of opportunities for and eliminate
any related barriers broadband access and adoption.
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The two reports have been completed. The task force is no longer
meeting. The recommendations of the reports were to be carried
out by the Business, Transportation and Housing Agency, and the
Office of the Chief Information Officer (OCIO) has inherited
some of these tasks.
3) Other existing broadband programs in California: There are
also two existing programs that are tasked with advancing
broadband in California. The CASF is an expected two-year
program that was authorized by SB 1193 (Padilla), Chapter 393,
Statutes of 2008. CASF provides grants to telephone corporations
for projects that will provide broadband services to areas
currently without broadband access and build out facilities in
underserved areas if funds are still available. Funds are
collected using an end-user surcharge billed and collected by
telecommunications carriers. The total allocation for the CASF
is $100 million. CASF has already allocated over $9 million in
broadband infrastructure grants.
The second program is the California Emerging Technology Fund
(CETF). The CETF is a non-profit corporation established
pursuant to requirements from the PUC in approving the mergers
of SBC-AT&T and Verizon-MCI. The merged companies were required
to contribute a total of $60 million over 5 years to advance
broadband.
4) Maximizing ARRA Funding: California is already in a good
position to maximize ARRA funding. There are already two
entities with funds available for match requirements that also
have systems in place for accepting grant applications and
distributing funds. CETF has also begun the work to find private
companies to take advantage of broadband funding. Given the fact
that CASF and CETF have already done a significant amount of
work in this area, and because CASF is overseen by the PUC, the
committee may wish to consider amending the bill to ask the PUC
to develop a strategy to expedite accessing funds provided under
ARRA that is to be submitted to the Legislature by a specific
date.
5) Who's in charge? This bill re-creates the task force and asks
them to develop a strategy to expedite the accessing of ARRA
funding. One mater that is underscored by this requirement is
that there has been some confusion regarding which entity in
California is in charge of accessing the ARRA broadband funding.
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The requirements of BTOP specify that there must be a single,
centralized agency that applies for all grant recipients under
this program, and also requires a 20 percent match. Since there
are so many different entities involved in broadband advancement
in California, it was not clear at the time of the passage of
ARRA which entity had both the expertise and the resources to
meet these requirements.
The Legislative Analyst's Office (LAO) also noted this issue in
their March 2009 analysis of the stimulus package, and
recommended that the California Public Utilities Commission
(PUC) be designated the PUC as the state entity to access these
funds. According to the LAO, this would have improved the
Legislature's oversight of the state's access to and use of
these funds to ensure that the state is maximizing funding for
which it is eligible and that the expenditure of the funds is
consistent with legislative priorities. The legislature also
raised these issues in a joint informational hearing held by
this committee with the Senate Energy Committee in March of this
year. During that hearing representatives from both the CIO's
office and the PUC discussed various efforts they had made
toward accessing the ARRA funding.
Rather than literally designate a single entity to access the
funding, the Administration chose to create a hybrid system. The
entity that applied for the funding was listed as the "State of
California," but the OCIO was designated by the Administration
to coordinate the broadband grants. The OCIO is accepting grant
applications, but the prioritization of those applications as
well as implementation will be a joint effort between the CIO,
the PUC and the CETF. Funding for the match requirement will
come from the CASF and the CETF. This hybrid system lacks the
oversight required to ensure expenditure of the funds is
consistent with legislative priorities. Therefore, the author
may wish to consider amending the bill to designate the PUC as
the state entity to access these funds , consistent with the
LAO's recommendation.
6) Urgency clause: This bill contains an urgency clause. Since
all grant awards are to be made by the end of September 30,
2010, and grants are to be completed within two years of their
approval, it is imperative that the strategy required in this
bill be developed as soon as possible.
REGISTERED SUPPORT / OPPOSITION :
AB 1012
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Support
None on file.
Opposition
None on file.
Analysis Prepared by : Nina Kapoor / U. & C. / (916) 319-2083