BILL ANALYSIS �
AB 876
Page 1
ASSEMBLY THIRD READING
AB 876 (Bonta)
As Amended January 17, 2014
Majority vote
UTILITIES & COMMERCE 14-0
APPROPRIATIONS 16-0
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|Ayes:|Bradford, Patterson, |Ayes:|Gatto, Bigelow, Allen, |
| |Bonilla, Buchanan, | |Bocanegra, Bradford, Ian |
| |Ch�vez, Fong, | |Calderon, Campos, Eggman, |
| |Beth Gaines, Garcia, | |Gomez, Holden, Linder, |
| |Roger Hern�ndez, Jones, | |Pan, Quirk, |
| |Mullin, Quirk, Rendon, | |Ridley-Thomas, Wagner, |
| |Skinner | |Weber |
| | | | |
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SUMMARY : Modifies the existing California Teleconnect Fund
(CTF). Specifically, this bill :
1)Clarifies that qualifying schools maintaining preschools and
transitional kindergartens are eligible for CTF discount.
2)Requires the California Public Utilities Commission (PUC) to
develop and implement an outreach plan to eligible preschools
and transitional kindergartens to increase awareness about
CTF.
3)States PUC must ensure CTF remains technology neutral.
4)Requires PUC to develop a plan on the feasibility and expense
associated with establishing and maintaining a database of
communication services purchased by qualifying entities
receiving financial support from the program. PUC shall report
findings to the Legislature no later than March 1, 2016.
5)Makes technical and non-substantive changes.
EXISTING LAW :
1)Authorizes PUC to use ratepayer funds collected for universal
service programs to compensate regulated telephone
corporations for their costs of providing universal service
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(Public Utilities Code Section 270).
2)Requires PUC to develop, implement and administer a program to
advance universal service by providing discounted rates to
qualifying schools, community colleges, libraries, hospitals,
health clinics, and community organizations, known as CTF
(Public Utilities Code Section 280).
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Increased costs to the California Teleconnect Fund of
approximately $300,000 to expand eligibility to schools
offering pre-kindergarten and transitional kindergarten
classes. Currently, over 3,000 schools participate in
discount program and receive about $30 million in subsidies.
By including pre-kindergarten and transitional kindergarten
classes, it is estimated that the number of
schools receiving the discount will increase by 1 percent.
2)Increased costs to PUC (California Teleconnect Fund) in the
$200,000 to $250,000 range for outreach and the development of
the database plan and its associated report.
COMMENTS : According to the author, "AB 876 establishes a
database of discounted services and prices paid by all CTF
discounted schools and libraries. The bill updates outdated
definitions of "advanced telecommunications services" to schools
and libraries. AB 876 also clarifies availability of CTF for
preschool and transitional kindergarten programs, requires PUC
to conduct outreach to such programs, and asks PUC to include
the needs of personalized digital learning in "advanced
telecommunications services."
1)Background : The Commission opened a proceeding (R.95-01-020
and I.95-01-021) in
January 1995 and issued new universal service rules in light
of the opening of monopoly markets to competition
(D.95-07-050). In response to the Federal Telecommunications
Act of 1996, which intended to promote competition and reduce
telecommunications regulation, and the principles expressed in
AB 3643 (Polanco), Chapter 278, Statutes of 1994, the
Commission later issued D.96-10-066 finalizing the new
universal service rules. That decision created a discount
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program for qualifying schools, libraries, hospitals, health
clinics, and community-based organizations through CTF. The
program provides a 50% discount on select communications
services and broadband Internet access services.
The goals of CTF are innovation in the delivery and use of
advanced communications; diversity of choices among services
and providers; and affordable, widespread access to
California's public networks and to the resources tied to
those networks. The subsidy is funded through a surcharge on
customers' bills from their communication service provider,
currently set at 0.59% of intrastate telephone charges.
CTF currently has more than 9,000 participating entities,
including more than 5,000 community organizations. For fiscal
year 2013-14, program expenditures are projected at
approximately $92.4 million.
CTF works in conjunction with the Federal Communications
Commission's (FCC) E-Rate Program. Established in 1996, the
E-rate program is the federal government's program for
connecting the nation's schools and libraries to broadband.
For these schools and libraries, CTF discount applies to only
the balance remaining after an actual or statewide average
E-Rate discount is applied.
On January 31, 2013, PUC opened Rulemaking 13-01-010 to
conduct a comprehensive examination of CTF. The Rulemaking
will assess program goals and eligibility requirements for
participants, service providers and services. PUC will seek
comment on: 1) CTF goals; 2) entities applying for and
receiving CTF discount; 3) services eligible for CTF discount;
4) conditions placed on providers desiring to offer those
services; and 5) CTF budget, administration, and internal
controls. Interested parties are presently filing comments in
the proceeding, however it unclear when PUC will issue a final
ruling.
2)What problem does this bill solve ? It is not clear if this
bill is seeking to address a problem
that has occurred, but the author wishes to ensure the
necessary safeguards are in place to protect schools from
incurring exorbitant charges for investments in communication
services. To date, no evidence has been produced by PUC or
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any other entity that communication carriers are price gauging
or taking advantage of eligible CTF schools or other entities
for communication services.
3)Program eligibility clarification : According to the author,
the law regarding eligibility for
preschools and transitional kindergarten is ambiguous, as they
apply as community based organizations for access to
discounted telecommunications services provided by CTF. This
bill clarifies eligibility of preschools and transitional
kindergarten for CTF discount and requires PUC to conduct
outreach to such programs to increase awareness.
4)Transparency of information : This bill requires PUC to
develop a plan on the feasibility and
expense associated with establishing and maintaining a
database of communication services purchased by qualifying
entities receiving financial support from the program. The
plan would include a report on how to allow qualifying
entities access to the database in order to collaborate and
allow for the use of common infrastructure to reduce costs.
The bill authorizes the PUC to collaborate with third party
entities, such as nonprofit organizations, to obtain
assistance in developing the plan while maintaining the
privacy and security of all data through a suitable legally
binding agreement.
This bill requires the PUC to report the plan findings or
progress to the Legislature no later than March 1, 2016.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
FN: 0003005