BILL ANALYSIS �
AB 841
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Date of Hearing: May 27, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 841 (Buchanan) - As Amended: May 23, 2011
Policy Committee:
UtilitiesVote:14-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Public Utilities Commission (PUC) to
require interconnected Voice over Internet Protocol (VoIP)
service providers to collect and remit state surcharges, to be
determined based on one of three prescribed methodologies, on
their California intrastate revenues to support the existing
universal service programs listed below:
1)California High-Cost Fund A, which provides direct support to
the 14 small rural telephone companies that are under rate of
return regulation.
2)California High-Cost Fund B, which provides support for large
local exchange carriers (AT&T, Verizon, Frontier, and
SureWest) for the high-cost areas of their service territories
where the cost of providing basic service exceeds $36 per
month.
3)California LifeLine, which provides discounted basic telephone
(landline) services to eligible California households.
4)Deaf and Disabled Telecommunications Program, which includes a
dual-party relay system known as California Relay Service
(CRS) and a specialized equipment program known as California
Telephone Access Program (CTAP).
5)California Teleconnect Fund, which provides a 50% discount on
selected telecommunications services to qualifying schools,
libraries, government-owned and operated hospitals and health
clinics, and community based organizations.
AB 841
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6)California Advanced Services Fund, which is intended to
promote universal service in unserved and underserved areas in
the state by awarding funding to qualifying certificated
applicant carriers.
FISCAL EFFECT
No additional state costs, as the PUC has recently opened a
proceeding on this specific topic.
COMMENTS
Purpose . According to the author, "as consumers move from
traditional wireline communications towards technology such as
VoIP, the result is a reduction in the traditional wireline
revenue. The state must adapt to this changing environment in
order to ensure the universal service funds are protected.
Although California interconnected VoIP providers connect to the
public switched telephone network and benefit from the state
universal service programs, their customers have not been paying
into the funds at the state level. AB 841 addresses this by
requiring interconnected VoIP providers to contribute to the
state universal service funds in a manner consistent with
federal law."
Federal Communications Commission data indicate that, as of
December 2008, there were 2.5 million VoIP users in California,
of which approximately 2 million were residential subscribers.
On January 13, 2011, the PUC opened a Rulemaking to address
whether to require interconnected VoIP service providers within
California to collect and remit state public purpose program
surcharges on intrastate revenues.
The most recent amendments seek to clarify that this bill only
addresses the collection of the specified state surcharge funds
by VoIP providers.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081