BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 720| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 720 Author: Bowen (D) and Alarcon (D) Amended: 8/18/03 Vote: 21 SENATE ENERGY, U.&C. COMMITTEE : 8-1, 4/8/03 AYES: Bowen, Morrow, Alarcon, Battin, Dunn, Murray, Sher, Vasconcellos NOES: McClintock SENATE FLOOR : 34-1, 5/8/03 AYES: Aanestad, Ackerman, Alpert, Ashburn, Battin, Bowen, Brulte, Burton, Cedillo, Chesbro, Denham, Ducheny, Escutia, Figueroa, Florez, Hollingsworth, Karnette, Knight, Kuehl, Machado, Margett, McPherson, Morrow, Murray, Oller, Ortiz, Perata, Poochigian, Romero, Scott, Sher, Soto, Speier, Torlakson NOES: McClintock NO VOTE RECORDED: Alarcon, Dunn, Johnson, Vasconcellos, Vincent ASSEMBLY FLOOR : 54-25, 9/4/03 - See last page for vote SUBJECT : Telecommunications services SOURCE : Author DIGEST : This bill provides for payment of installation costs and discounts for use of high speed Internet services for schools, libraries, community-based organizations, and hospitals owned by cities or counties. This bill also CONTINUED SB 720 Page 2 clarifies that advanced telecommunications services includes high speed communications services such as digital subscriber line (DSL) services for the purposes of the California Teleconnect Fund. Assembly Amendments add the provisions authorizing use of special funds for installation costs. As it left the Senate, the bill only clarified that DSL service is eligible for California Teleconnect Fund (CTF) discounts. ANALYSIS : Current law establishes the policy of "universal telephone service." Current regulations provide for the CTF, which provides discounted telephone service to schools, libraries, health care institutions, and community-based organizations. This bill clarifies that DSL service is among the services eligible for CTF discounts. This bill authorizes the Public Utilities Commission-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 percent of the installation costs of advanced telecommunications service (such as DSL) for schools, libraries, or non-profit community technology programs without access to such service. Comments California has a long history of encouraging the widespread deployment of telecommunications service. A number of programs exist to subsidize telephone service in rural areas, for the deaf and handicapped, and for the poor. One of those programs is the CTF, which derives revenues from a 0.31 percent surcharge on telephone bills, provides a discount on telephone service to schools, libraries, community-based organizations, and hospitals, including a 50 percent discount for installation costs. SB 1863 (Bowen)-Chapter 308/Statutes of 2002 codified the language upon which the CTF is based. There is a currently a balance in the CTF exceeding $200 million. The 2003-04 budget appropriates $40 million from the CTF and transfers $150 million from the fund into to the General Fund as a loan. SB 720 Page 3 The author indicates that 16 percent of schools and 21 percent 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 the CTF provides a 50 discount for installation costs, this is insufficient for some less well-to-do schools. The author believes that authorizing the PUC to provide an additional, incremental discount of up to 40 percent of installation costs (up to a 90 percent total discount), using up to $3 million of unencumbered CTF funds over the next two years, will make a difference for such institutions. The 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 ten homes and businesses having DSL. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 9/4/03) California Community Technology Policy Group California County Superintendents Educational Services Association Cisco Systems Digital California Project (of the Corporation for Network Education Initiatives in California) Monterey Peninsula College Pomona Unified School District SBC Ventura County Superintendent of Schools Office (Information Technology Services) ASSEMBLY FLOOR : AYES: Benoit, Berg, Bermudez, Calderon, Campbell, Canciamilla, Chan, Chavez, Chu, Cogdill, Cohn, Corbett, Correa, Diaz, Dutra, Dymally, Frommer, Garcia, Goldberg, SB 720 Page 4 Hancock, Jerome Horton, Jackson, Kehoe, Koretz, Laird, Leno, Levine, Lieber, Liu, Longville, Lowenthal, Maddox, Maldonado, Matthews, Montanez, Mullin, Nakano, Nation, Negrete McLeod, Nunez, Oropeza, Parra, Pavley, Reyes, Richman, Ridley-Thomas, Salinas, Simitian, Steinberg, Vargas, Wiggins, Wolk, Yee, Wesson NOES: Aghazarian, Bates, Bogh, Cox, Daucher, Dutton, Harman, Haynes, Shirley Horton, Houston, Keene, La Malfa, La Suer, Leslie, Maze, McCarthy, Mountjoy, Nakanishi, Pacheco, Plescia, Runner, Samuelian, Spitzer, Strickland, Wyland NC:mel 9/5/03 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****