BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 876 - Bonta Hearing Date:
June 23, 2014 A
As Amended: January 17, 2014 FISCAL B
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DESCRIPTION
Current law requires the California Public Utilities
Commission (CPUC) to administer universal service programs
funded by customer surcharges to ensure statewide affordable
basic telephone service and access to broadband and advanced
communications services. (Public Utilities Code � 270)
Current law requires the CPUC to develop, implement and
administer a program to advance universal service by providing
discounted rates to qualifying schools (kindergarten through
12th grade), community colleges, libraries, hospitals, health
clinics, and community organizations, known as the California
Teleconnect Fund (CTF). (Public Utilities Code � 280)
This bill makes preschool and transitional kindergarten
eligible for the Teleconnect program and requires the CPUC to
develop and implement an outreach plan to preschools and
transitional kindergartens to increase awareness of services
available under the program.
This bill requires the CPUC, in a new or existing proceeding,
to develop a plan and report to the Legislature no later than
March 1, 2016, on the feasibility and expense of establishing
and maintaining a database of communications services
purchased by qualifying entities receiving support from the
Teleconnect program and the prices paid for those services.
This bill requires the CPUC to revise the Teleconnect program
to give priority to advanced communications services as the
CPUC deems appropriate and not favor a particular technology.
BACKGROUND
Discount Prices for Schools and Libraries - The CPUC administers
several universal service programs to ensure that all
Californians have access to affordable basic telephone service
and broadband enabling high-speed Internet access. All customers
of landline, wireless, and Voice over Internet Protocol (VoIP)
are required to pay the surcharges that support these programs.
Since 1996, the CPUC has administered the California Teleconnect
Program, which allows qualifying schools, libraries, hospitals,
health clinics, and community-based organizations to get a 50%
discount on select communications services and broadband
Internet access services. SB 1437 (Padilla, 2008) made community
colleges eligible.
The goals of the program are to make service affordable to
entities that serve the public and to close the Digital Divide.
The program 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. The customer surcharge to fund this
program currently is set at 0.59% of intrastate charges.
Shifting to Fund Broadband - Teleconnect works in conjunction
with the Federal Communications Commission's (FCC) E-Rate
program. Established in 1996, the E-rate program provides
eligible schools and libraries discounts on telecommunications
services, Internet access and internal connections (for example,
wiring and Wi-Fi routers to provide wireless connections in
classrooms), and basic maintenance of internal connections.
Discounts range from 20 to 90 percent, with higher discounts for
higher poverty and more rural schools and libraries. The
Teleconnect discount applies only to the balance remaining on
service charges after an actual or statewide average E-Rate
discount is applied. In 2013 the FCC initiated a comprehensive
review to modernize the E-rate program, with pending proposals
to simplify and streamline the application process and support
broadband and Internet services essential for digital learning.
On January 31, 2013, the CPUC opened Rulemaking 13-01-010 to
conduct a comprehensive examination of Teleconnect in order to
assess program goals and eligibility requirements for
participants, service providers and services. Key issues are
whether to revise eligibility of participants, especially
community organizations, and whether to shift discounts to be
only for broadband and Internet services rather than just voice
service. The rulemaking also is considering the impact of
potential changes to the FCC's E-rate program. A proposed
decision may be issued before the end of the year.
Budget Funds for Broadband for Schools and Libraries - The
recently enacted 2014-15 state budget includes two new funding
streams for broadband for entities eligible for the Teleconnect
program. First, the budget provides $3.25 million for
California's public library branches to access the Corporation
for Education Network Initiatives in California (CENIC)
high-speed Internet backbone, with $2.25 million ongoing annual
payment to CENIC for connecting the libraries, and a one-time $1
million to provide grants to public libraries that require
equipment upgrades to connect. It requires the State Librarian
to report to the Legislature by April 1, 2015, on library
connections to CENIC, an evaluation of changes in library
branches' technology costs, itemized expenditures, and related
information. (SB 852, 2014, Item 6110-182-0001)
Second, the budget authorizes $26.7 million for a statewide
report to the Legislature and Department of Finance of network
connectivity in K-12 schools with detailed costs to upgrade
Internet infrastructure adequate to implement computer-based
student assessments. This report is due March 1, 2015, and is
to be used to make network connectivity infrastructure grants to
K-12 schools. The grants are to be distributed by the K-12 High
Speed Network in consultation with the Department of Education
and State Board of Education. High-speed Internet access at
schools is critical because of computer-based student
assessments implemented with the Common Core standards. (SB 852,
2014, Item 6120-215-0001)
COMMENTS
1. Author's Purpose . According to the author, this bill
seeks to remove ambiguity of whether preschools and
transitional kindergartens are eligible for the Teleconnect
program, help school districts make the best financial
decisions when purchasing Teleconnect-eligible services by
requiring the CPUC to explore creating a database so
districts that serve similar populations and geographic
regions can compare prices, and to require the CPUC to
prioritize advanced communication services as the
commission deems fit, taking in mind not to favor one
particular technology over another.
2. Clarifying Program Eligibility . Preschools and
transitional kindergartens that currently participate in
the Teleconnect program apply as community based
organizations for access to discounted telecommunications
services. This bill makes preschools and transitional
kindergartens eligible for CTF discount, regardless of
their eligibility as community based organizations. It
also requires the CPUC to conduct outreach to preschools
and transitional kindergartens to increase awareness, which
may lead to more participation given that some of these
entities may not know that they were otherwise eligible as
community-based organizations. It also would extend
eligibility to for-profit preschools and transitional
kindergartens not previously eligible.
3. Coordinating Data-Gathering Efforts . This bill seeks to
provide pricing transparency for school districts and other
Teleconnect participants with an ongoing updated database
of communications services available for the Teleconnect
discount. It requires a report on the feasibility of such
a data base by March 1, 2016. The budget requires a report,
on Internet connectivity at schools statewide, including
costs for infrastructure upgrades and services, due by
March 1, 2015. While these two reports call for different
information, they both relate to broadband services at
schools statewide, and likely will require information from
the same officials who handle information technology at
school sites. Similarly, the report required by April 1,
2015, on libraries' connection to CENIC may be informative
as to services available to the libraries that participate
in Teleconnect. Thus, to ensure that the CPUC takes
advantage of these data-gathering efforts, the author and
committee may wish to consider amending the bill to require
the K12HSN and CENIC to collaborate with the CPUC and share
data and contact information related to schools and
libraries' services eligible for Teleconnect discounts.
4. Ratepayer Impact . This bill would impose costs on a
program funded by customer surcharges by expanding
eligibility.
5. Related Legislation . AB 1100 (Levine) removes the cap
on Teleconnect allocations to community colleges, but was
held on suspense. Status: Held in the Assembly Committee
on Appropriations.
ASSEMBLY VOTES
Assembly Floor (75-0)
Assembly Appropriations Committee (16-0)
Assembly Utilities and Commerce Committee
(14-0)
POSITIONS
Sponsor:
Steve Midgley an Education Technology Consultant
Support:
Bay Area council
Children Now
Navigation North Learning
Ronald S. Schandler, CIO, Los Angeles Unified School District
Oppose:
None on file
Jacqueline Kinney
AB 876 Analysis
Hearing Date: June 23, 2014