BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 876 (Bonta) - Telecommunications: California Teleconnect Fund
Administrative Committee Fund.
Amended: July 1, 2014 Policy Vote: EU&C 10-0
Urgency: No Mandate: No
Hearing Date: August 4, 2014 Consultant:
Marie Liu
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 876 would expand eligibility of the Teleconnect
program to include preschools and transitional kindergartens
(TK) and require the California Public Utilities Commission
(CPUC) to develop a feasibility plan for the establishment of a
database of communication services purchased under the program.
Fiscal Impact:
Unknown ongoing cost pressures, at least in the hundreds of
thousands of dollars, to the California Teleconnect Fund
(CTF, special) for increased eligibility for for-profit
preschools and private TK schools.
Costs of at least $400,000 from the CTF (special) to the
CPUC for outreach efforts.
Initial costs of $186,000 for one year from the CTF
(special) to the CPUC to develop a feasibility plan
regarding a database of financial assistance.
Unknown costs, likely minor, to the CTF (special) to the
Department of Education and the State Library for
collaboration with the CPUC on the developing the
feasibility report.
Unknown cost pressures, likely in the hundreds of thousands
of dollars, to the CTF (special), for the CPUC, Department
of Education, and the State Library to implement the
feasibility study.
Background: Public Utilities Code �270 requires the California
Public Utilities Commission (CPUC) to administer universal
service programs to ensure statewide affordable telephone
service and access to broadband and advanced communication
services. These programs are funded by a customer surcharge.
Public Utilities Code �280 establishes the California
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Teleconnect program, which is administered by the CPUC, to
advance universal service by providing a 50% discount on select
communication services and broadband Internet access services to
qualified schools maintain kindergarten or any grades 1 to 12,
community colleges, libraries, hospitals, health clinics, and
community organizations (required to be a nonprofit, tax-exempt
organization). The program currently has more than 9,000
participating entities including more than 5,000 community
organizations.
Recent budget actions have authorized funding to the State
Library and the K-12 High Speed Network (K12HSN) to provide
assistance in accessing high-speed internet service at public
libraries and schools, respectively. K12HSN is a state program
funded by the California Department of Education.
Proposed Law: This bill would expand the eligibility of the
Teleconnect program to also include preschools and TK.
Additionally, the CPUC would be required to develop and
implement an outreach plan to preschools and TK to increase
awareness of available assistance under the program.
The CPUC would also be required to open or extend an existing
proceeding to develop by March 1, 2016, a feasibility plan and
cost estimate to establish and maintain a database of
communication services purchased by qualifying entities under
the program and the price paid for those services. The plan
would be required to discuss how to have qualifying entities use
common infrastructure to reduce costs and how to make price
information public in an anonymous manner.
This bill explicitly allows the CPUC to prioritize uses of the
California Teleconnect Fund as it finds appropriate and requires
the program to be technology neutral.
Related Legislation: SB 1437 (Padilla) Chapter 718, Statutes of
2008 made community colleges eligible for the Teleconnenct
program.
AB 1100 (Levine) would have removed the cap on Teleconnect
allocations to community colleges. AB 1100 was held under
submission by the Assembly Appropriations Committee.
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Staff Comments: Under existing law, non-profit preschools are
already eligible for the program as a community organization.
Additionally, California Department of Education regulations
require that any public elementary school must offer both TK and
kindergarten classes. As such, public schools with TK classes
are also already eligible for the program. Thus, this bill seems
to only add eligibility for for-profit preschools and private
schools only offering TK. This increase in eligibility will
place cost pressures on the California Teleconnect Fund. This
cost pressure is unknown as the state has no database of all the
many preschools in the state, many of which are private, or
private schools with TK programs. As a point of reference, the
program currently provides approximately $30 million in
assistance to schools. Given the large number of preschools in
the state, cost pressures, at a minimum, will be the
mid-hundreds of thousands of dollars but potentially into the
low millions.
This bill also requires ongoing costs to the CPUC to provide
outreach to preschools and TK regarding availability of
financial assistance under the Teleconnect program. Given the
large number of preschools in the state and the lack of an
existing database of such facilities, this outreach effort would
be large, with at least onetime costs of $400,000. This cost
would assume that the outreach would include technical
assistance to interested schools.
The CPUC would also incur approximately $186,000 in one-time
costs under this bill for the development of a feasibility plan
on the creation of database of communication services purchased
under the program. The K12HSN (via the Department of Education,
CDE) and the State Library would be required to collaborate with
the CPUC in the development of this plan. It is unclear what
work would be requested of CDE or the State Library, but their
involvement in the development of the feasibility plan is likely
to be minor.
However, once the feasibility plan is developed, there will be
cost pressures to the CPUC, CDE, and the State Library to
implement the plan. As the scope of the database is unknown
until the feasibility plan is completed, the implementation
costs are unknown. Staff estimates that implementation cost
pressures are likely in the hundreds of thousands of dollars.
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