BILL ANALYSIS
SB 720
Page A
SENATE THIRD READING
SB 720 (Bowen)
As Amended August 18, 2003
Majority vote
SENATE VOTE :31-1
UTILITIES AND COMMERCE 11-2 APPROPRIATIONS 17-7
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|Ayes:|Reyes, Richman, Calderon, |Ayes:|Steinberg, Berg, Lieber, |
| |Campbell, Canciamilla, | |Correa, Diaz, Laird, |
| |Diaz, | |Goldberg, Levine, Nation, |
| |Jerome Horton, Levine, | |Negrete McLeod, Nunez, |
| |Maddox, Nunez, | |Pavley, Ridley-Thomas, |
| |Ridley-Thomas | |Simitian, Wiggins, Yee, |
| | | |Mullin |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|La Malfa, La Suer |Nays:|Bates, Daucher, Haynes, |
| | | |Maldonado, Pacheco, |
| | | |Runner, Samuelian |
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SUMMARY : Provides for payment of installation costs and
discounts for use of high speed Internet services for schools,
libraries, community-based organizations (CBOs), and hospitals
owned by cities or counties. Specifically, this bill :
1)Authorizes the Public Utilities Commission (PUC), using any
unencumbered California Teleconnect Funds (CTF) from the
2003-04 and 2004-05 Budget Act appropriations, to make
one-time expenditures of up to $3 million to cover up to an
additional 40% of the installation costs of advanced
telecommunications services.
2)Clarifies that "advanced telecommunications services" eligible
for discounted rates through CTF include high-speed
communications services such as digital subscriber line
SB 720
Page B
(DSL)<1> and T1<2> services.
EXISTING LAW :
1)Declares the policies for telecommunications in California,
which include:
a) A commitment to universal service;
b) Encouraging development and deployment of new
technologies in a way that encourages availability of a
wide choice of state-of-the-art services;
c) Promoting economic growth, job creation, and the like by
adequate long-term investment in the necessary
infrastructure;
d) Promoting lower prices, broader consumer choice, and
avoiding anti-competitive conduct; and,
e) Promoting competition to encourage efficiency, lower
prices and consumer choice.
2)Declares legislative intent that PUC should provide nonprofit
community technology programs with discounts comparable to
those that are provided to schools and libraries to address
the inequality of access to advanced telecommunication
services
FISCAL EFFECT : Assembly Appropriations notes potential one-time
special fund cost of up to $3 million over two years for
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<1> DSL is a high-speed connection to the Internet that can
provide from 6 times to up to 30 times the speed of current
56k-modem technology. The DSL line connects using the existing
copper telephone lines. A person can talk on the same phone
line while connected by DSL to the Internet.
<2> T1 is a high-speed digital network (1.544 mbps) started by
AT&T in the early 1960's to support long haul digitized voice
transmission. Phone companies move nearly all voice traffic as
digital rather than analog signals. A T1 line is either a
fiber optic or copper line that can carry 24 digital voice or
data channels at high speeds. A T1 line can carry about 192,000
bytes per second -- roughly 60 times more data than a normal
residential modem.
SB 720
Page C
increased subsidies for installation of advanced
telecommunications.
COMMENTS : AB 3643 (Moore), Chapter 278, Statutes of 1994,
declares that state action is necessary to prevent society from
splitting into two different "information worlds," one that was
information rich, and the other that was information poor.
AB 3643 directed PUC to examine this "digital divide" issue and
re-examine universal service in the context of changes in
technology and information availability. PUC later created CTF.
CFT, 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.
CTF is intended to provide discount access to advanced
communications services. This bill clarifies that advanced
communications services include DSL. DSL provides a fast
connection that is useful when accessing the Internet. There
are approximately 1.4 million DSL lines in California, with
approximately one in 10 homes and businesses having DSL.
The author indicates that 16% of schools and 21% of school
district offices do not have high-speed access to the internet,
and that a primary reason for this is the installation cost.
The author argues that, while CTF provides a 50% discount for
installation costs, this is insufficient for some less
well-to-do schools. The author believes that authorizing PUC to
provide an additional, incremental discount of up to 40% of
installation costs (up to a 90% total discount), using up to $3
million of unencumbered CTF funds over the next two years, will
make a difference for such institutions.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
FN: 0003327