BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2213|
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THIRD READING
Bill No: AB 2213
Author: Fuentes (D)
Amended: 6/22/10 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 8-0, 6/15/10
AYES: Padilla, Dutton, Corbett, Florez, Kehoe, Lowenthal,
Simitian, Strickland
NO VOTE RECORDED: Cox, Oropeza, Wright
SENATE APPROPRIATIONS COMMITTEE : 8-0, 8/2/10
AYES: Kehoe, Alquist, Ashburn, Corbett, Emmerson, Price,
Wolk, Yee
NO VOTE RECORDED: Leno, Walters, Wyland
ASSEMBLY FLOOR : 72-0, 5/20/10 - See last page for vote
SUBJECT : Moore Universal Telephone Service Act
SOURCE : Author
DIGEST : This bill requires that every household in the
state be given access to lifeline telephone service, rather
than every individual. The bill authorizes the Public
Utilities Commission to determine what is considered
lifeline service.
ANALYSIS : Under current law, telephone corporations are
required to provide discounted basic telephone service to
low income customers. This is referred to as "lifeline"
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service. The Public Utilities Commission (PUC) has defined
basic telephone service as having 17 service elements, such
as access to all toll carriers, access to 911 services,
free telephone directory listing, and others.
Under current law and PUC practice, low income telephone
subscribers are eligible for lifeline service that is set
at 50 percent of the cost of basic telephone service
provided by AT&T. Under the current regulation of
telephone service, the PUC regulates telephone rates for
what are known as the incumbent carriers (such as AT&T).
However, pursuant to deregulation of the telephone
industry, beginning on January 1, 2011, telephone rates
will no longer be regulated by the PUC. One impact of the
pending deregulation of rates will be that lifeline service
rates may increase with basic service rates. To avoid
significant increases in lifeline rates, the PUC has opened
a proceeding to determine how to provide lifeline service
under deregulation. That proceeding is also considering
whether to broaden lifeline service beyond fixed, wireline
service to other technologies. The cost of providing
lifeline service is subsidized by non-lifeline telephone
customers.
This bill makes definitional changes to the lifeline
program. Specifically, the bill replaces citizen or person
in several places with household and defines household as a
residential dwelling, but not a business. The bill also
changes current law to require that the PUC ensure that
lifeline service subscribers be provided one lifeline
subscription, rather than a single party line (i.e. a fixed
telephone line). The bill provides that the PUC has the
authority to define what is considered lifeline service.
The PUC indicates that any costs under the bill can be
absorbed within existing resources.
Background
The Moore Universal Telephone Service Act sets the goal of
providing high quality telephone service at affordable
rates to the greatest number of citizens. The act requires
the PUC to annually designate a class of lifeline service
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necessary to meet minimum residential communications needs,
develop eligibility criteria for lifeline service
(currently 150 percent of the federal poverty level), and
set the rates for lifeline service, which are required to
be not more than 50 percent of the rate for basic telephone
service. The PUC sets lifeline rates based on AT&T's basic
service rate, resulting in current lifeline rates between
$5.47 and $6.03. Telephone companies are reimbursed for
the cost of offering the discount through a surcharge
assessed on all non-lifeline telephone customers. Because
lifeline rates are tied to AT&T's rates, consumer advocates
are concerned that the lifeline rate could increase after
January 1, 2011, when AT&T and other carriers under the
Uniform Regulatory Framework will be free to increase basic
service rates without regulatory approval.
The PUC has an open proceeding to address lifeline rates
and other reforms to the lifeline program (R.06-05-028). A
2009 proposed decision in this proceeding that would have
allowed customers the option of alternative technologies
such as wireless for lifeline service was deemed to be in
conflict with current law that refers to lifeline service
as basic residential telephone service. In a related
proceeding, the PUC is seeking to reform the California
High Cost B-Fund, which provides subsidies to carriers of
last resort for providing basic telephone service to
residential customers in high-cost areas (R.09-06-019). In
these proceedings, the PUC is addressing how the elements
of "basic" telephone service should be updated to promote
competitive and technological neutrality in lifeline
service while upholding the universal service goals of
ensuring that basic service is affordable for all
low-income households and available to all customers
residing in high-cost regions.
Comments
According to the author, the purpose of this bill is to
remove statutory barriers that prevent the PUC from
allowing lifeline service to be offered to low-income
customers with new technologies such as wireless service
rather than only with landline service. The author cites
the "ubiquity of cell phones and studies showing a
preference among low-income persons for cell phones" as
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reasons why wireless service should be an option for
lifeline service.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 6/15/10 - unable to reverify at time
of writing)
AT&T
California Public Utilities Commission
Division of Ratepayer Advocates
Sprint (if amended)
TURN (if amended)
OPPOSITION : (Verified 6/15/10 - unable to reverify at
time of writing)
California Independent Telephone Companies (unless amended)
SureWest (unless amended)
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall,
Bill Berryhill, Tom Berryhill, Blakeslee, Block,
Blumenfield, Bradford, Brownley, Buchanan, Caballero,
Charles Calderon, Carter, Chesbro, Conway, Cook, Coto,
Davis, De Leon, DeVore, Emmerson, Eng, Feuer, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Hayashi, Hernandez, Hill, Huber,
Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Monning, Nestande,
Niello, Nielsen, Norby, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio,
Audra Strickland, Swanson, Torlakson, Torres, Torrico,
Tran, Yamada
NO VOTE RECORDED: De La Torre, Evans, Fletcher, Harkey,
Nava, Villines, John A. Perez, Vacancy
DLW:nl 8/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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