BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1863
                                                                  Page  1

          SENATE THIRD READING
          SB 1863 (Bowen)
          As Amended June 27, 2002
          Majority vote 

           SENATE VOTE  :37-0  
           
           UTILITIES AND COMMERCE     11-2                                 
           
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          |Ayes:|Wright, Pescetti,         |     |                          |
          |     |Canciamilla, Diaz,        |     |                          |
          |     |Horton, Kelley, Maddox,   |     |                          |
          |     |Nation, Papan, Reyes,     |     |                          |
          |     |Simitian                  |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|John Campbell, La Suer    |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 

           SUMMARY  :  Adds to the state's articulated telecommunications  
          policies.  Specifically,  this bill  :   

          1)Declares that it is a state telecommunications policy to focus  
            efforts on providing community based organizations,  
            educational, healthcare and government institutions with  
            access to advanced telecommunications services in recognition  
            of their economic and societal impact.

          2)Declares the intent of the Legislature that any program  
            administered by the California Public Utilities Commission  
            (PUC) that address the inequality of access to advanced  
            communication services by providing those services to schools  
            and libraries at a discounted price should also provide  
            comparable discounts to nonprofit community technology  
            programs.

          3)Defines a nonprofit community technology program as a  
            community-based 501(c)(3) tax-exempt that disseminates  
            technology in local communities and trains local communities  
            with limited access to the Internet and other technologies.

           EXISTING LAW  declares the policies for telecommunications in  
          California, which include:








                                                                  SB 1863
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          1)A commitment to universal service.

          2)Encouraging development and deployment of new technologies in  
            a way that encourages availability of a wide choice of  
            state-of-the-art services.

          3)Promoting economic growth, job creation, and the like by  
            adequate long-term investment in the necessary infrastructure.

          4)Promoting lower prices, broader consumer choice, and avoiding  
            anti-competitive conduct.

          5)Promoting competition to encourage efficiency, lower prices,  
            and consumer choice.

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  Eight years ago, the Legislature passed AB 3643  
          (Moore), Chapter 278, Statutes of 1994, a bill declaring that  
          state action was necessary to prevent society from splitting  
          into two different "information worlds," one that was  
          information rich, and one that wasn't.

          AB 3643 directed PUC to examine this "digital divide" issue and  
          look at universal service in the context of changes in  
          technology and information availability.  AB 3643 declared that  
          "Universal service must be defined in a way that ensures all  
          segments of California society have access to the technology  
          that will allow them to enjoy the benefits of the Information  
          Age and the Information Superhighway."  Among the principles of  
          AB 3643 was that "healthcare, community, and government  
          institutions be early recipients of the benefits of the  
          Information Age."

          PUC later created the California Teleconnect Fund (Fund).  This  
          Fund, currently budgeted at $57.125 million annually and funded  
          by a 0.31% surcharge on telephone bills, provides funding for  
          telephone service discounts of 50% to schools and libraries, and  
          25% to community-based organizations.  Since its inception, more  
          than 99% of the program funds have gone to discounts for schools  
          and libraries.

          This bill codifies the language from AB 3643.









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          In 1996, Congress enacted legislation similar to AB 3643,  
          requiring that schools, healthcare providers, and libraries have  
          access to advanced communications services.  The resulting  
          program, known as the e-rate program, provides $2.25 billion in  
          telecommunication service discounts nationwide.

          In October 2000, the United States Commerce Department's  
          National Telecommunications and Information Administration  
          issued a report, entitled "Falling Through the Net: Toward  
          Digital Inclusion," that noted a rapid increase in the overall  
          level of U.S. digital inclusion.  As evidence of the rapid rise  
          in the level of digital inclusion, the report cited a 58%  
          increase in the share of households with Internet access.  A 21%  
          rise in the number of households with access to computers, and a  
          proliferation in the number of Americans using the Internet,  
          from 32% online in December 1998 to 44% in August 2000.  

          While Internet access and computer ownership have risen for  
          almost all groups, noticeable divides exist between those with  
          different income and education levels, different racial and  
          ethnic groups, old and young, single and dual- parent families  
          and those with and without disabilities, the report said.  For  
          example, persons with disabilities are only half as likely to  
          have access to the Internet as those without a disability.   
          Large gaps also remain between Internet access rates for  
          African-Americans and Latinos when measured against the national  
          average of Internet penetration, the report said.


           Analysis Prepared by  :    Paul Donahue / U. & C. / (916) 319-2083  


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